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Policy target setting

The Bank of Thailand (BoT) has conducted monetary policy under a flexible inflation targeting framework since May 2000. Under this framework, the BoT pays attention not only to ensuring price stability through setting inflation target (so-called “monetary policy target”), but also to preserving economic growth and financial stability.

Policy target 
 

The medium-term inflation target and the target for 2021

The Minister of Finance and the MPC mutually agreed to maintain the monetary policy target for price stability such that the headline inflation is to reside within the range of 1.0 – 3.0 percent for the medium-term horizon and for the year 2021. This range target, while being conducive to the full-potential economic growth, is deemed appropriate in addressing the changing inflation dynamics from technological advancements and the transition into an aging society. Moreover, the range inflation target enhances the flexibility in monetary policy formulation amid highly volatile and uncertain global economic circumstances after the COVID-19 outbreak, while allowing the MPC to fulfill economic growth and financial stability objectives more effectively. Nonetheless, the purpose of setting the medium-term target is to properly address the lag effects of monetary policy, which takes time to have a full impact on the economy.

In the  case  that headline inflation breaches the announced target

A mutual agreement between the MPC and the Minister of Finance states that

"Should average headline inflation in the past 12 months or forecast of average headline inflation over 12 months ahead breach the inflation target range, the MPC shall send an open letter to the Minister of Finance to explain (1) reasons for the breach of target, (2) monetary policy actions in the past and going forward to support the return of headline inflation to target over an appropriate time horizon, and (3) the expected time frame for a return of headline inflation to target. Furthermore, the MPC will write an open letter to the Minister every six months if average headline inflation based on the above criteria remains outside the target range, while also report the progress of their policy actions as appropriate."



 The Monetary Policy Target 2021

  • Monetary Policy Target 2021

For further inquiries

Financial Stability Team 1-2 Team, Monetary Policy Group
Tel. 0-2283-5641 or 0-2283-5642​​

​​​​

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About BOT
  • Roles & History
  • Good Corporate Governance
  • Laws And Regulations
  • Organization And Executives
  • Committee
  • Financial Reports
  • Banknotes
  • Museum
Monetary Policy
  • Monetary Policy Committee (MPC)
  • MPC Knowledge
  • Economic Conditions
  • Research and Conference Papers
  • Regional Economy
Financial Institutions
  • Financial Institutions Policy Committee
  • Thailand’s Financial Institutions​
  • BOT Roles and Responsibilities
  • Financial Institutions Supervision in Practice
  • Financial Institutions Policy
  • Supervision of Other Financial Corporations
  • Supervisory Coordination
Financial Markets
  • Monetary Operations
  • Financial Market Development
  • Foreign Exchange Market
  • Foreign Reserves Management
  • Foreign Exchange Regulations
  • Thai Reference Rate and LIBOR Transition
Payment Systems
  • Payment Systems Committee (PSC)
  • Payment Systems Policy
  • Oversight of Payment Systems
  • Payment Systems Act
  • Oversight of e-Payment Service Providers
  • BOT's Payment System Services
  • Payment Systems Standards
  • Payment Systems Notification & Circulars
  • Financial Technology
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