Bangkok: Krungsri Global Markets reports a slight weakening of the baht after the Monetary Policy Committee (MPC) announced it would maintain the interest rate at 1.50%. They believe the baht is still on a downward trend, with a potential reduction to 1%.
According to Thai News Agency, the Global Markets Group of Bank of Ayudhya Public Company Limited revealed the results of the Monetary Policy Committee (MPC) meeting. The Bank of Thailand (BOT) voted 5 to 2 to maintain the policy interest rate at 1.50% per annum. Two votes also voted to reduce the policy interest rate by 0.25% per annum from 1.50% to 1.25% per annum.
In its statement, the Monetary Policy Committee (MPC) assessed that the Thai economy would expand in 2025 and 2026, close to the previous estimate of 2.2% and 1.6%, respectively. While the Thai economy expanded well in the first half of 2025 due to accelerated production and exports to the United States, it is expected to slow down in the second half of 2025 and 2026 due to the impact of US tariffs. Meanwhile, the tourism sector will gradually recover. Private consumption will expand to some extent, bolstered by additional government stimulus measures. Furthermore, electronic exports are expected to continue expanding. Headline inflation is expected to decline to 0.0% in 2025 and 0.5% in 2026, driven by supply-side factors, particularly oil and fresh food prices. However, it is expected to gradually return to the target range in early 2027. The MPC also noted a contraction in credit, resulting from decreased demand for credit by large businesses, debtor repayment, and cautious lending to high-risk groups, par ticularly SMEs and low-income households.
The baht weakened slightly to around 32.50 baht per dollar after the Monetary Policy Committee (MPC) announced it would maintain interest rates. The MPC noted that the baht has strengthened against the dollar at times, impacting some exporters.
Regarding the next MPC meeting on December 17, 2025, the MPC's statement today reflects the policy approach to support the economy under limited interest rate ammunition. It stated that the recent interest rate cuts are being passed on to the economic sector. The statement also noted the need to closely monitor the impact of US tax measures, the continuity of government budget disbursements, and the adaptation of SME businesses amid increasingly competitive environments, limited access to credit, and high financing costs.
Although the holding of interest rates at this meeting contradicts Krungsri Global Markets' forecast, we maintain our view that the policy interest rate remains on a downward trend, projecting it to reach 1.00% in the near future. Although the timing of further rate cuts remains highly uncertain,