Thailand’s central bank raised the monetary policy rate by 25 basis points, hiking its benchmark to 1% in a battle to tame inflation and protect the Thai baht from sliding against the US dollar. The second-straight 25bps raise was in line with expectations.
The Ministry of Commerce earlier this month announced that Thailand’s Consumer Price Index (CPI) rose 7.86% in August, within the expectation range of 7.7-7.9%. Inflation in August rose from 7.61% in the previous month. The average CPI for the first eight months of this year grew 6.14%.
Meanwhile, core CPI, which excludes volatile oil and food prices, rose 3.15% YoY in August, slightly above market’s forecasts of 3.1%. Core inflation also expanded further from 2.99% in July.
Also, Thai baht continued to weaken against the US dollar, breaking the support level of THB38.00 to its lowest since 2006 amid strong dollar and US bond yields on the back of Fed’s commitment to tame inflation by hiking interest rates and other tools available.
