Thai Baht: Higher commodities threaten Baht stability – Commerzbank

Commerzbank analysts note that the Bank of Thailand (BoT) is expected to keep its policy rate at 1.0%, seeing it as sufficiently accommodative. USD/THB has consolidated in a 32.90–33.30 range, with rising global commodity prices and foreign outflows posing downside risks for the Baht.

Baht pressured by oil and outflows

"On monetary policy, the Bank of Thailand (BoT) is expected to keep the benchmark policy rate unchanged at 1.0% at the next meeting on 26 August."

"The policy trade-off remains uncomfortable: domestic demand is soft and growth remains below potential, but inflation has risen because of the earlier energy shock. BoT expects headline inflation to average 2.8% in 2026 and to remain above its 1-3% target range for part of H2 before easing in 2027."

"With the inflation shock largely supply-driven and medium-term expectations still anchored, further tightening appears unnecessary. At the same time, the BoT has described the current 1.0% rate as sufficiently accommodative, suggesting limited appetite for renewed easing unless domestic activity weakens materially. As such, BoT could remain on hold for the rest of the year."

"In FX, USD/THB rose 0.2% to 33.07 yesterday, amid renewed upward pressure on oil prices. The pair has fallen from its late-July high of 33.85 and has consolidated around the 32.90-33.30 range over the past two weeks."

"Looking ahead, higher global commodity prices and foreign portfolio outflows could weigh on the THB."