The medium-term inflation target and the target for 2023

The Minister of Finance and the MPC mutually agreed to set the monetary policy target for price stability such that the headline inflation was to reside within the range of 1.0 - 3.0 percent for the medium-term horizon and for the year 2023 because: (1) adhering to the inflation target reflected the commitment to the price stability mandate which helped instill public confidence and anchor medium-term inflation expectations, (2) during the period of high volatility and uncertainty surrounding inflation, changes made to the inflation target could create confusion amongst the public regarding the future monetary policy stance, and (3) the two-percent target range was deemed sufficiently flexible to accommodate fluctuations in inflation that might occur in the medium-term while enabling monetary policy to achieve its key mandates of medium-term price stability, sustainable economic growth and financial stability.

Given the circumstances under which inflation remained elevated and factors affecting inflation dynamics remained highly uncertain, the Ministry of Finance and the Bank of Thailand would continue to work together to ensure that fiscal and monetary policies would be well-coordinated and complementary to one another. The MPC would continue to commit to the mandate of maintaining price stability and keeping medium-term inflation within its target range--an important precondition for sustainable economic growth. 

In the  case  that headline inflation breaches the announced target

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

"In case that the average headline inflation in the past 12 months or its forecast for the next 12 months fell outside the target range, the MPC would issue an open letter to the Minister of Finance to elaborate on (1) reasons for the breach of the target range, (2) monetary policy implementation in the past and going forward to guide the headline inflation into the target range at an appropriate time, and (3) expected time horizon for the headline inflation to fall within the target range.  In addition, the MPC would issue an open letter to the Minister of Finance every six months should the average headline inflation, according to the above criteria, remain outside the target range and would report the progress on policy actions taken as deemed appropriate."