(Bloomberg) -- Thailand's central bank raised the benchmark policy rate for the first time in more than three years, belatedly joining a global tightening spree to tame inflation.
The bank's monetary policy committee on Wednesday decided to increase the one-day repurchase rate by 25 basis points to 0.75% as forecast by 24 of 27 economists in a Bloomberg survey. The remaining three had predicted a 50-basis-point hike. The rate was last increased in December 2018.
Wednesday's action follows months of central-bank speak on the need to raise rates sooner to avoid large moves later. Governor Sethaput Suthiwartnarueput as well as Finance Minister Arkhom Termpittayapaisith believe that gradual moves are enough to counter inflation without hurting growth, even as Asian peers from Philippines to India have raised their policy rates by more than 100 basis points this year in response to the Federal Reserve's tightening.
The government sees gross domestic product expanding 3.3% this year, in line with the central bank's forecast in June. The pace of expansion is poised to be among the slowest in Southeast Asia in 2022.
While headline inflation rate at 7.61% last month was a tad below June's 7.66%, it's still way above the central bank's 1%-3% target. Core price gains, which strips out volatile food and fuel items, was almost 3% in July, quickening from 2.51% a month earlier.
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