The Bank of Thailand (BoT) is highly likely to raise its key policy rate at its August meeting, a senior director said on Thursday, as other central banks moved to tighten their monetary policy.
Weakness in the baht is still in line with those of trade partners and competitors and the central bank is ready to intervene if the Thai currency weakens too much, Don Nakornthab, a senior director at the BoT, said.
The baht hit 36.66 per United States dollar on Thursday, the lowest level in more than 15 years.
Mr Don said if the baht weakens to 37 baht per US dollar but still moves in line with regional peers, the BoT's monetary policy committee (MPC) might overlook that as a factor in their decision because they usually watch currency competitiveness.
He said the MPC would be deliberate in deciding how much the rate should be hiked as Thailand's economic recovery has lagged that of other countries.
"Chances are quite high for a rate hike in August, but by how much, the committee will have to consider," Mr Don said.
On Monday, BoT governor Sethaput Suthiwartnarueput said Thailand would only gradually hike its key rate to tackle inflation and ensure an uninterrupted economic recovery.
Despite out-of-cycle policy tightening by other central banks, the BoT said earlier on Thursday that it saw no need to call an urgent meeting to review policy before the next scheduled meeting on Aug 10, when economists expect a rate hike from a record low of 0.50%.
Singapore and the Philippines both announced out-of-cycle rate hikes on Thursday to tackle rising inflation.
