- Decision
- Maintain
- Rate change
- 0 bps
- policy rate
- 1%
The Monetary Policy Committee of the Bank of Thailand held the policy rate at 1.00 percent at its 29 April 2026 meeting, judging that an unchanged stance best supports a slowing economy while the current upturn in inflation stems mainly from supply-side pressures linked to the Middle East war. The decision follows a 25 bp reduction in February that lowered the rate from 1.25 percent. Headline inflation is now projected to average 2.9 percent in 2026—temporarily above the 1–3 percent target band—before easing to 1.5 percent in 2027 as energy and other supply shocks fade; core inflation is seen at 1.6 percent this year. Real GDP growth is expected to decelerate to 1.5 percent in 2026 and 2.0 percent in 2027, pressured by weaker household purchasing power, higher business costs and softer tourism, while credit growth remains subdued amid cautious bank lending. Thai government bond yields have risen with global moves and the baht has depreciated, reflecting the economy’s heavy reliance on Middle East energy imports. The Committee cited heightened global uncertainty, including possible supply disruptions from the closure of the Strait of Hormuz, and pledged to closely monitor war-related risks, inflation dynamics and medium-term inflation expectations.
Rate evolution
From June 2025 to August 2026, the Bank of Thailand cut the policy rate by 75 basis points from 1.75% to 1.00%, with an initial hold, a cut in August, a pause in October, further easing in December and February, and then holds in April, June and August. Early in the period, the Monetary Policy Committee judged policy should stay accommodative as growth was set to slow after a stronger first half, with U.S. trade policies, geopolitics and weaker tourism and domestic demand weighing on the outlook, while headline inflation stayed subdued because of energy and food prices, credit kept contracting, and small and medium-sized enterprise (SME) and low-income borrowers faced tighter access and worsening credit quality. Even so, repeated references to high uncertainty, ongoing transmission of earlier cuts and limited policy space argued for caution at the hold decisions, while the easing steps were aimed at keeping financial conditions supportive, easing debt burdens and, by February, anchoring medium-term inflation expectations as downside inflation risks increased alongside baht appreciation and below-potential growth.
In April, the Committee described 1.00% as sufficiently accommodative and held it there as the Middle East war lifted business costs and inflation through supply-side channels while slowing growth, stressing that uncertainty was high and that inflation risks had shifted upward but were not expected to be broad-based or persistent under weak demand. At its 24 June meeting, it again held the policy rate at 1.00%, judging the setting appropriate to support recovery as growth was stronger than previously assessed but remained low and uneven, inflation was expected to rise on supply-side cost pass-through before easing, and medium-term inflation expectations remained anchored, while overall credit growth stayed subdued and SME and vulnerable household loan quality still needed monitoring. On 26 August, the Committee unanimously maintained the policy rate at 1.00%, judging that accommodative policy alongside targeted financial measures supported the recovery as the technology and artificial intelligence cycle sustained economic momentum, though growth remained low and uneven, inflation was below earlier estimates, and SME lending continued to contract despite an expansion in overall credit.