BANGKOK, THAILAND – The Bank of Thailand cut its key interest rate to 1.00 percent, despite stronger-than-expected economic growth at the end of 2025, in response to a 2026–2027 outlook it judged to be below potential.
Decision by the rate-setting committee
The Monetary Policy Committee (MPC) of the Bank of Thailand decided on Wednesday, by a 4–2 majority, to reduce the policy rate by 25 basis points from 1.25 to 1.00 percent.
According to the central bank, the decision took effect immediately.
Reasons for the policy shift
The economy recorded stronger growth than expected in the fourth quarter of 2025. However, the MPC still viewed the prospects for 2026 and 2027 as subdued.
The committee cited persistent structural obstacles, rising competitive pressure and an appreciating baht as factors that weighed on the recovery.
Objectives of the rate cut
With the rate reduction, the MPC sought to ease financial conditions in order to support economic momentum.
At the same time, the move was intended to help reduce the debt burden of companies and private households.
Focus on currency and risks
The central bank announced it would closely monitor developments in the baht and any potential exchange-rate fluctuations.
Against a backdrop of heightened global uncertainties, it also emphasized that it would pay particular attention to the stability of the financial system, according to the news agency TNA.