Thailand's rate committee stuck by a pledge that monetary tightening would be gradual and measured, but noted it could be adjusted should the growth and inflation outlook shift from assessments, minutes of the meeting showed on Wednesday.
The minutes said monetary policy would face greater challenges in the period ahead, given a tradeoff between tackling inflation at a time of rising demand-side inflationary pressures amid an improving economic outlook and supporting the recovery where some businesses and households remained fragile.
On Jan 25, the Monetary Policy Committee of the Bank of Thailand (BoT) voted unanimously to raise the one-day repurchase rate by a quarter point to 1.50% to try to bring inflation back within target.
It will next review policy and update economic forecasts on March 29, when most economists forecast a further rate hike.
The BoT's current forecast is for economic growth of 3.7% this year. Last week, Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow predicted growth could reach 4% this year, helped by a tourism boom.
The committee viewed that the economy would continue to expand, with tourism and private consumption gaining traction thanks to the return of Chinese tourists, the minutes said.
Inflationary risks had increased and warranted close monitoring since, while headline inflation would continue to decline, "there was a risk that core inflation would stay high for longer than expected," the minutes said.
Headline inflation cooled to its lowest rate in nine months of 5.02% in January, but was still well above the central bank’s target range of 1-3%.
The baht appreciated against the dollar due to expectations of dovish tightening in the United States and China’s reopening, which would benefit Thailand's tourism, the minutes said, adding the committee would closely monitor volatility in the foreign exchange market.
