BOT Announces a 0.25% Rate Hike Ahead of Fed to Maintain Monetary Stability!
MPC votes 5 to 2 to raise the policy rate by 0.25 percentage point from 1.50 to 1.75 percent.
Thailand Monetary Policy Committee (MPC) has announced an increment on policy rate by 0.25% with a resolution of 5:2 vote from the meeting on December 19, 2018.
This is the first rate hike since 2011, which will be increased by 0.25% from 1.50% to 1.75%, effective immediately in order to maintain the balance of monetary policy.
Despite missing expectation of GDP growth in the third quarter, the Bank of Thailand still expects the economy to expand more than 4% this year. The rate hike also reflects Thailand’s stability as well.
Thai baht has been among the most stable currencies in Asia against the U.S. dollar this year, especially when compared to large declines in the Philippine peso and Indonesian rupiah this year that sank to the point of crisis at one point.
Meanwhile, the first day of Fed meeting still did not report the interest rate hike. The announcement is expected to be today as well. The hike in December may have been in the calculation of investors, but what worries them is the hike in 2019 that may causes stock markets to plunge even further.