Thailand Proposes Inflation Target Hike to Boost Economic Leeway

[snoop1130]

 

In a recent strategic meeting, the Finance Ministry of Thailand has indicated plans to propose an increase in the inflation target range for 2025, shifting it from the existing 1-3% to a new 1.5-3.5% range. This move, supported by Deputy Prime Minister and Finance Minister Pichai Chunhavajira, is aimed at granting the central bank more flexibility in managing monetary policy.

 

The discussions, held between high-level officials from the Ministry and the Bank of Thailand, are part of their annual talks to set monetary policy directions. Raising the target inflation range would allow the central bank to consider lowering policy interest rates effectively, echoing the recent cuts by the Federal Reserve. Although a significant reduction, like the Fed’s 50 basis points cut, might be viewed cautiously, a modest 25 basis points deduction could still offer substantial relief.

 

Amidst these developments, the central bank's monetary policy committee has already adjusted rates in response to economic needs. This recent move aligns with efforts to ease household debt pressures and stimulate economic growth. The final decision on the inflation target will proceed through a meticulous review process before Cabinet approval, marking a proactive step towards aligning Thailand's fiscal and monetary strategies for the coming year.

 

File photo for reference only

 

-- 2024-10-29

 

 

 

[black tabby12345]

Are they thinking about it to weaken THB?

Currency of the country with higher inflation rate usually goes down in a long term.

Inflation means monetary devaluation as the price of goods/services go up.

So needs more  money to buy one same item than the past.

Edited October 29 by black tabby12345

[Guderian]

Hang about, the BoT just unexpectedly cut its base rate by 0.25% due to pressure from the politicians, Do they really need to Gerrymander the targets to get the BoT to cut rates further, or is it just an attempt to make the pressure they're putting on the bank look prudent? Or maybe they're desperate to get the cost of the money they're having to borrow to fund the digital wallet handout as low as possible. There's been lots of talk of something similar in Western countries, but so far no important central bank has yet done so. Odd for Thailand to lead the way into uncharted financial waters.