Thailand Interest Rate

Central Bank leaves rates unchanged in April

Unanimous hold meets expectations: At its meeting on 29 April, the Bank of Thailand (BOT) decided to maintain the policy rate at 1.00%, as markets had expected, after delivering a 25 basis point cut in February. The decision was unanimous.

Deteriorating economic outlook rules out a hike: Recent changes to the Bank’s forecasts did not support a cut, as the BOT projects that inflation will surge to 2.9% in 2026—a notable uptick from 2025’s 0.1% decline and a 0.5% fall in Q1 2026. Meanwhile, the case for a hike was not compelling. The Bank assessed that the inflation surge will be driven by supply-side pressures due to the war in the Middle East. Additionally, it sees GDP growth slowing to 1.5% in 2026 (2025: +2.4%), which would be the worst reading since 2020’s pandemic-induced downturn. The Iran war is increasing business costs; private consumption is under pressure from increased living costs and a weakening income outlook; and foreign tourist arrivals are expected to decline.

BOT likely to stay on hold this year: The vast majority of our panelists see the BOT’s policy rate ending 2026 at current levels, which the Bank deemed supportive of economic growth in its press release. Elevated inflation in the near term will leave little room for rate cuts, while softening GDP growth in the coming quarters will likely rule out rate hikes. Still, a small number of panelists have penciled in a cut by December. The BOT should reconvene on 24 June.

Panelist insight: United Overseas Bank’s Enrico Tanuwidjaja and Sathit Talaengsatya commented: “We maintain our call that the BOT policy rate will stay at 1.00% through the end of 2026. The Feb cut was the terminal move in this cycle; the next phase of support should come from targeted fiscal measures, energy-cost smoothing, debt restructuring, and credit-guarantee instruments rather than another broad-based rate cut.”

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