Thai Baht: BoT cautious on normalisation, downside persists – Commerzbank
Commerzbank’s Charlie Lay reports that the Bank of Thailand kept its policy rate at 1.00%, with the MPC maintaining a hold but signalling a less dovish stance.
The Bank of Thailand kept its policy rate at 1.00%, with the Monetary Policy Committee signaling a more cautious stance towards normalizing monetary policy. The MPC, voting 6-0 (with one member absent), maintained a hold on rates, indicating a gradual hike may be possible as the economy strengthens. However, it expects policy to remain on hold through 2026-2027.
Financial stability risks from prolonged low rates were highlighted, and while a shift towards a less dovish stance is suggested, an imminent rate hike appears unlikely. Thailand's currency, the Baht, remains near its recent high of 32.50-34.00 against the US Dollar, with downside risks stemming from Fed policy tightening, higher oil prices, and Thailand's comparatively low interest rates.
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