Thailand’s c.bank to gradually raise interest rates to curb inflation – boss

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  • The economy will grow by about 3% this year, by 4% next year
  • The economy is expected to return to pre-pandemic levels by the first quarter of next year
  • C.bank expects to raise interest rates again later this month

BANGKOK, Sept 7 (Reuters) – Thailand’s central bank will gradually hike interest rates to curb inflation and ensure a smooth recovery as the economy is expected to return to pre-pandemic levels late this year or early next , her governor said on Wednesday.

The recovery of Southeast Asia’s second largest economy is lagging behind other countries as the vital tourism sector has only just begun to recover while investment remains sluggish.

The economy is expected to grow by about 3% this year and 4% next, Bank of Thailand Governor Sethaput Suthiwartnarueput told a business seminar. Last year’s 1.5% growth was one of the slowest in the region

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The BOT, one of Asia’s less hawkish central banks, hiked interest rates by a quarter point to 0.75% last month for the first time in almost four years. Another hike is expected at the next meeting on September 28 as inflation hit a 14-year high of 7.86% in August. read on read on

Monetary policy normalization will be carried out in a gradual and measured manner in line with economic conditions, Sethaput said, adding that a larger move or pause is possible if necessary.

“Our goal is to get the launch off to a smooth start…we don’t want financial conditions to tighten too quickly and disrupt the recovery,” he said.

Sethaput reiterated that the BOT is not behind the curve in its policies and, unlike others, raised rates even before the economy returned to pre-pandemic levels.

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Reporting by Orathai Sriring, Kitiphong Thaichareon and Satawasin Staporncharnchai Editing by Kanupriya Kapoor

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