- Decision
- Maintain
- Rate change
- 0 bps
- policy rate
- 1%
The Bank of Thailand’s Monetary Policy Committee unanimously held the policy rate at 1.00% on 24 June 2026, judging that an accommodative stance should continue to support recovery as economic growth has strengthened from the previous assessment but remains low and uneven, while inflation is being pushed up by supply-side factors and is expected to ease as those pressures dissipate. The Committee said targeted financial measures alongside monetary policy have helped support the economy. It projects growth of 2.3% in 2026 and 1.8% in 2027, with support from merchandise exports, private investment linked to the technology and AI cycle, government energy-relief measures and an improved situation around the Middle East conflict, although small and medium-sized enterprises and many households remain under pressure. Headline inflation is projected to average 2.8% in 2026 and 1.4% in 2027, with inflation expected to exceed the target range for the rest of 2026 before declining in 2027, while medium-term inflation expectations remain anchored within the target range. The Thai baht has depreciated against the USD, which the Committee attributed to a shift in the Federal Reserve’s monetary policy stance, and credit growth remains subdued, driven mainly by large corporates while SME lending continues to contract and loan quality among SMEs and vulnerable households warrants monitoring. The Committee said the current rate is appropriate and will continue to closely monitor inflation, inflation expectations and related risks.
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.