Thai Baht: Extended policy pause expected from Bank of Thailand – DBS

DBS economists Taimur Baig and Radhika Rao expect the Bank of Thailand (BoT) to keep its policy rate unchanged at 1.00% in August, extending the pause after June’s unanimous decision. They cite uneven economic growth, easing but still elevated headline inflation within the 1–3% target range, and scope for accommodative policy to support recovery alongside fiscal measures.

Accommodative stance to support recovery

"We expect the BoT to maintain its policy rate at 1.00% at its August meeting, extending the pause following June’s unanimous decision."

"Economic growth remains uneven, with both private consumption and foreign tourism weak but stabilising, while goods exports and private investment remain strong."

"Headline inflation, although elevated, has eased for three consecutive months, falling to 1.9% yoy in July from rates near the upper end of the BoT’s 1-3% target range, largely due to lower energy prices."

"Given the uneven pace of economic growth and headline inflation remaining within the central bank’s target range, the BoT retains scope to keep monetary policy unchanged and accommodative in order to support the economic recovery and complement fiscal policy amid ongoing geopolitical uncertainties."