The Bank of Thailand's (BoT) Monetary Policy Committee (MPC) said it would continue its approach of gradual and measured policy normalisation as it hiked the key interest rate last month, minutes of the meeting showed on Wednesday.
On March 29, the MPC voted unanimously to raise the one-day repurchase rate by a quarter point to 1.75% to try to curb inflationary pressures.
Policy tightening would continue as it expected headline inflation to return to the target range by mid-2023 and core inflation to remain high, the minutes released on Wednesday showed.
"There remained a risk of inflation staying elevated for longer than expected, as firms could pass on higher costs absorbed in the past and demand-side pressures could pick up," the central bank said.
The committee was ready to adjust the size and timing if growth and inflation changed from the current outlook, it said, adding that it also saw more risks in the global financial system, including tighter financial conditions due to banking stress.
Headline inflation dropped to its lowest rate in 15 months of 2.83% in March, returning within the BoT's target range of 1% to 3% for the first time since 2021. The core inflation also slowed in March.
The BoT forecast headline inflation at 2.9% this year, with the core rate seen at 2.4%.
The central bank has hiked the benchmark interest rate by a total of 125 basis points since August, less aggressive than many of its peers in Southeast Asia as Thailand's economic recovery has lagged the region.
At the last meeting, the BoT also trimmed its economic growth projections to 3.6% this year and 3.8% next year, from the previous forecasts of 3.7% and 3.9%, respectively, with a strong rebound in tourism the main driver.
Southeast Asia's second-largest economy expanded 2.6% last year at a time when its tourism sector had just started to recover.