The Bank of Thailand opted to leave its benchmark interest rate unchanged at 1.00% for the second consecutive meeting on Wednesday
BOT left its benchmark interest rate unchanged at 1.00% at its June 2026 monetary policy meeting, in line with market expectations and keeping borrowing costs at their lowest level since 2022.
The decision followed an aggressive historical easing cycle of six consecutive rate cuts totaling -150bps that concluded earlier this year. Despite these persistent domestic vulnerabilities, the central bank raised its macroeconomic outlook, now forecasting stronger-than-expected GDP growth of +2.3% in 2026 and +1.8% in 2027, driven by a robust technology and AI investment cycle, solid merchandise exports, and domestic energy relief measures. Meanwhile, headline inflation is projected to remain well-anchored, averaging +2.8% this year before cooling to +1.4% in 2027 as transient supply-side disruptions systematically recede.
MBSB noted that the previous policy easing was to support economic stability as the economy continues to face persistent demand-side fragility and elevated household debt burdens. The house noted that the overall credit expands at a low rate, driven primarily by large corporate borrowers, while SME loans continue to contract. Financial institutions remain highly conservative, reinforcing stringent credit criteria and opting to hoard liquidity rather than extend credit to higher-risk segments.
