Thailand’s central bank left its key interest rate unchanged on Wednesday, as widely expected, to facilitate a sustained economic recovery.
At the Monetary Policy Committee meeting of the Bank of Thailand, policymakers unanimously voted to hold the key rate at 0.50 percent.
The bank had last reduced the rate by 25 basis points in May 2020.
The committee viewed that the domestic recovery will remain intact this year and next, despite impacts from sanctions against Russia which led to higher energy and commodity prices and a slowdown in external demand.
The economic growth is seen at 3.2 percent in 2022 and 4.4 percent in 2023 on the back of improving domestic demand and tourism.
The bank cited prolonged shortages of raw materials and the impact of higher prices on living costs as major downside risks to growth.
Further, the bank said average inflation for the full year 2022 will exceed the target range but is expected to decline and return to target in early 2023 with energy and food prices stabilizing.
Headline inflation is projected to be at 4.9 percent in 2022 and 1.7 percent in 2023. Inflation will exceed 5 percent in the second and third quarters of 2022, driven mainly by rising energy prices and the pass-through of food prices, the bank added.
The MPC said it will closely monitor key factors affecting the economic and inflation outlook, and stands ready to use appropriate monetary policy tools if necessary.