Thailand’s central bank is not eager to raise rates

The Bank of Thailand is optimistic that inflation will return to target next year, signalling that there is no need to modify monetary policy just yet to keep price increases from reaching a 13-year high.

“Inflation is no doubt trending higher,” governor Sethaput Suthiwartnarueput said in an interview with Bloomberg Television’s Haslinda Amin at the World Economic Forum’s annual meeting in Davos. “It’s relatively concentrated in energy and food. And we don’t see the kind of demand-side inflationary pressures in terms of an overheating economy.”

Despite consumer prices rising faster than the Bank of Thailand’s goal range of 1% to 3% this year, it is one of the few Asian central banks to keep rates unchanged to assist the economy’s recovery.

After initially deferring rate hikes, other central banks in the region, including India, Malaysia, and the Philippines, have recently shifted their focus to combating price pressures.