BoT: No need for special rate meeting

Central bank believed to favour rate hike to tame inflation, but next meeting not until Aug 10

published :
17 Jun 2022 at 20:00

The Bank of Thailand says six annual interest rate meetings are sufficient for obtaining information for considering monetary policy, in a response to market speculation about an urgent meeting about an interest-rate increase.

The central bank’s comment came in a text message response to a question from media about whether there would be a special meeting about raising the key rate.

The next scheduled meeting of the central bank’s monetary policy committee is Aug 10.

Government leaders have been publicly making a case for keeping interest rates lower for longer, a call that is putting them at odds with monetary policy makers who would prefer to raise borrowing costs sooner to keep inflation from overheating.

Headline inflation, gauged by the consumer price index (CPI), hit a 13-year high of 7.1% year-on-year in May, largely attributed to the rise in energy and food prices.

Deputy Prime Minister Supattanapong Punmeechaow on Tuesday warned about risks to economic growth from higher rates. That contrasts with earlier statements from Bank of Thailand Governor Sethaput Suthiwartnarueput and his deputy, Mathee Supapongse, who argued that raising rates early will avoid steeper increases later in their fight against inflation.

The central bank left its key rate unchanged at 0.5% last week in a split 4-3 decision, as concerns about the impact of faster tightening by the US Federal Reserve have prompted some policy makers to voice their support for lifting rates sooner.

But Prime Minister Prayut Chan-o-cha and Finance Minister Arkhom Termpittayapaisith have also urged the central bank to keep borrowing costs low.