A shift by Thailand's central bank to a more hawkish footing this week stunned markets and appeared to finally end policymakers' tolerance for mounting price pressures, but a range of risks are likely to keep any tightening gradual.
The Bank of Thailand kept its benchmark interest rate at a record low on Wednesday but a split vote on the decision was a signal to markets that the central bank may raise interest rates as soon as August.
Thailand has been among Asia's least hawkish central banks, maintaining its policy focus on supporting an economy still struggling with the pandemic -- particularly a lack of Chinese tourists -- and insisting supply-driven inflation is better dealt with through fiscal measures and price controls, not rates.
