Thailand: BoT policy risks balanced – Standard Chartered
Standard Chartered economist Tim Leelahaphan expects the Bank of Thailand (BoT) to keep its policy rate at 1.0% through 2026 and 2027, with the BoT prioritising economic growth over inflation. He highlights asymmetric risks around this on-hold call, noting that any hikes would likely be gradual while cuts could be faster if domestic growth slows sharply.
Standard Chartered economist Tim Leelahaphan anticipates the Bank of Thailand (BoT) to maintain its policy rate at 1.0% through 2026 and 2027, focusing on economic growth rather than inflation. The central bank's hesitation to adjust rates could be due to asymmetric risks: tight monetary policy may be gradual, while cuts could be quicker if domestic growth slows.
Although other major and regional central banks are raising rates, the BoT may still face pressure to tighten. However, a sharp decline in domestic inflation is unlikely, as it remains within the BoT's 1-3% target range. Growth forecasts, however, may prove challenging due to ongoing economic uncertainty. Meanwhile, geopolitical tensions and hawkish Federal Reserve minutes support the US Dollar, which may continue to benefit from these developments.
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