Thai central bank sees average headline inflation at 2.6% over next 12 months

© Reuters. FILE PHOTO: Thailand’s central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva

BANGKOK (Reuters) – Thailand’s central bank expects average headline inflation at 2.6% over the next 12 months, within its target range of 1% to 3%, the Bank of Thailand said in an open letter to the Finance Ministry.

Medium-term inflation expectations remained well-anchored within the target range, said the letter, which was dated April 7 but made public on Tuesday.

The BOT’s rate-setting committee maintained the view that gradual, measured interest rate normalisation remains appropriate, with economic recovery on track and some upside risks to inflation from demand-pull pressures, the letter said.

However, the BOT was ready to adjust the pace and timing of the strategy should growth and inflation outlooks shift.

The BOT has raised its benchmark rate by a total of 125 basis points to 1.75% since August to curb inflation. It will next review monetary policy on May 31, when economists expect a further rate hike.

Headline inflation cooled to 2.83% in March, returning to within the target range for the first time in 15 months.