Thai Baht: BoT holds rates as curve steepening risks – DBS
DBS Group Research economist Chua Han Teng analyzes Thailand Markets after the Bank of Thailand (BoT) kept its policy rate at 1.00% for a fourth consecutive meeting. He expects the BoT to remain on hold through 2026, keeping short-end government bond yields stable, while warning that long-end yields face steepening risks from global energy, food prices and US Treasury spillovers.
The Bank of Thailand (BoT) kept its policy rate at 1.00% for the fourth consecutive meeting on October 28, signaling limited impetus for rate adjustments in the near term. Analyst DBS Group Research economist Chua Han Teng expects the BoT to continue holding rates through 2026, contributing to stable short-end government bond yields.
However, he warns of potential steepening risks for long-end yields due to global factors such as energy and food price shocks, US Treasury spillovers, and weak domestic public finances. While the Thai baht has depreciated by approximately 7% against the US dollar and underperformed regional peers year-to-date, external buffers are expected to help mitigate currency volatility risks.
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