Thai Baht: BoT rate hold amid curve-steepening risks – DBS

Thailand’s policy rate remains at 1.00%. Following the Bank of Thailand’s (BoT) fourth consecutive meeting on hold, DBS Group Research economist Chua Han Teng assesses the outlook for Thai markets. He expects no rate change through 2026, supporting stable short-end government bond yields. However, he flags yield curve steepening risks at the long end from global energy and food prices and US Treasury spillovers.

1.00% BoT Rate: Yield Curve Outlook

"The Bank of Thailand (BoT) maintained its policy rate at 1.00% for the fourth consecutive decision on October 28, with limited impetus for any adjustment in the near term."

"We continue to expect the BoT to keep its policy rate at 1.00% for the remainder of 2026, providing a stable backdrop for short-end government bond yields."

"We see steepening risks for Thailand’s yield curve."

"While short-end government bond yields should be stable, long-end yields are vulnerable to upward pressures from external challenges, including the pass-through effects of global energy and food price shocks, spillovers from higher and elevated US Treasury yields, and weak domestic public finances."

"The Thai baht, which has depreciated by ~7% against the US dollar and underperformed its regional peers year-to-date, is unlikely to be a major policy concern, given strong external buffers that should help mitigate currency volatility and related risks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)