Thai central bank likely to hike rate next month, ups GDP outlook – official

BANGKOK (Reuters) – Thailand’s central financial institution is extremely prone to elevate its key coverage price at its August assembly, an official mentioned on Friday, as its financial restoration positive factors extra traction and as different central banks tighten financial coverage to include inflation.

“The path might be up. It is a very excessive likelihood, however by how a lot, that’s as much as the committee,” Don Nakornthab, a senior director on the Financial institution of Thailand (BOT), mentioned on the TAM-EIG YouTube channel.

The BOT’s subsequent scheduled coverage assembly is on Aug. 10, when economists anticipate a hike in the important thing price from a file low of 0.50%, which has been left unchanged since Could 2020.

The official mentioned the slight weakening of the U.S. greenback after the Federal Reserve’s price hike earlier this week ought to considerably cut back strain on central banks all over the world.

Regardless of rate of interest differentials, the BOT’s rate of interest selections is not going to primarily rely on capital actions however reasonably on the home economic system, Don mentioned.

The central financial institution’s development outlook of three.3% for this yr ought to be raised on larger overseas vacationer numbers, he added.

Whereas the finance ministry’s latest development forecast of three.5% is larger than the BOT’s projection, it is nonetheless thought-about low, Don mentioned.

Southeast Asia’s second-largest economic system expanded just one.5% final yr, among the many slowest within the area.

(Reporting by Chayut Setboonsarng, Orathai Sriring and Satawasin Staporncharnchai; Writing by Kay Johnson; Enhancing by Kanupriya Kapoor)