The reduction is the fifth since October 2024, with rates down by a total of 125 basis points
[BANGKOK] Thailand’s central bank cut its key interest rate on Wednesday (Dec 17), as widely expected, as it looks to support a slowing economy grappling with multiple challenges including political uncertainty, a strengthening baht and US tariffs.
The Bank of Thailand’s (BOT) monetary policy committee voted unanimously to cut the one-day repurchase rate by 25 basis points to 1.25 per cent during its final review of the year.
“The Committee assesses that, given apparent economic slowdown as well as heightened risks, monetary policy can be more accommodative,” the central bank said in a statement, though it also acknowledged there was limited policy space.
The BOT said it expects the economy to grow by 2.2 per cent this year and 1.5 per cent in 2026, compared with previous forecasts of 2.2 per cent and 1.6 per cent respectively. Growth was 2.5 per cent last year.
All but one of 27 economists in a Reuters poll had forecast a quarter-point rate cut this week. One had predicted the rate would remain steady at 1.50 per cent.
Wednesday’s reduction was the fifth since October 2024, with rates down by a total of 125 basis points.
Among those who provided a longer-term outlook on rates in the poll, 13 of 23 economists expected the policy rate to fall to 1 per cent in the first quarter of 2026. The remaining 10 saw it at 1.25 per cent. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
