Further interest hikes likely
Thailand is likely to see higher interest rates in the second half of 2023 following the US Federal Reserve’s indication of two further interest rate hikes this year and a signal from the Bank of Thailand that it too might raise interest.
According to Roong Sanguanruang of Krungsri Bank, it was earlier expected that the Monetary Policy Committee (MPC) might pause interest rate hikes at 2%.
The reason given is that there is a high risk of underlying inflation, and the Fed’s Monetary Policy Committee (MPC) may want to create policy space or flexibility for future policy adjustments.
It is thus likely that the MPC will raise interest rates again, potentially by 2.25%, and at least once if the economy can handle it. However, there is still uncertainty regarding China's recovery, as well as the political transition period in Thailand.
The market is now waiting for views from Fed officials and the release of US economic data, with market forecasts likely to change based on economic figures and currency fluctuations.
