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Thai inflation slows, easing pressure to raise rates

Thailand’s inflation slowed in February as the prices of some commodities eased, reducing pressure on the central bank to raise borrowing costs from a five-year low.

The Bank of Thailand said last month it will select "the right timing" to withdraw its monetary stimulus to make sure the economic recovery is sustained, even after Australia and Vietnam raised interest rates and China, India and the Philippines moved to reduce excess cash in their economies.

"While the central bank remains vigilant against rising inflation, we believe they are likely to be cautious in raising rates, as loan growth remains muted and the banking system is not showing signs of any imbalance," Rahul Bajoria, an economist at Barclays Capital in Singapore, said before the report. "The policy directive is likely to be in favour of supporting growth."