The Bank of Thailand’s Monetary Policy Committee cut its policy rate by 25 bp to 1.00 % at its 25 February 2026 meeting, with four of six members judging that easier settings are needed to support an economy projected to grow below potential through 2027 and to counter rising downside risks to already subdued inflation stemming from falling energy prices, limited demand-side pressures and strong domestic competition; two members preferred to keep the rate at 1.25 % because earlier easing was still working. This move extends the cumulative 125 bp of cuts delivered since February 2025, when the rate stood at 2.25 %. The Committee noted that bank and market rates have fallen in line with earlier reductions, helping reduce financing costs, though overall credit remains in contraction and SME and household liquidity is tight. Headline inflation is now expected to return to target only in the second half of 2027, with core inflation “slightly lower” than earlier forecasts and deflation risks deemed low. Economic growth has been stronger than expected in Q4 2025 thanks to private investment and merchandise exports, but consumption is set to cool and uncertainties around U.S. tariff measures, a potential 2027 budget delay and SME adjustment persist. Externally, the baht has appreciated on shifting expectations for U.S. monetary policy and local factors, prompting concern about currency misalignment and tighter conditions for exporters. The global backdrop of weaker energy prices is c
Bank of Thailand 2026-02-25
Bank of Thailand cuts policy rate by 25 bp to 1.00%
Bank of Thailand’s Monetary Policy Committee cut the policy rate by 25 bp to 1.00 % on 25 Feb 2026 in a four-to-two vote, bringing total easing to 125 bp since Feb 2025. The move targets below-potential growth and muted inflation—now forecast to return to target only in H2 2027—against a backdrop of contracting credit and baht appreciation, with the MPC pledging close monitoring of transmission, credit conditions, deflation risks and exchange-rate pressures.