Bank of Thailand holds policy rate at 1% for fourth straight meeting

Overview

Updated 1 hour ago

Thailand's central bank held its policy rate at 1.00% on October 28, a fourth straight hold, betting cheap money will support a recovery that remains uneven. The vote was unanimous. The bank raised its 2026 growth forecast to 2.4%, up from 2.3% in June, fueled by a boom in technology and AI-linked exports.

The tension now is inflation. Headline inflation is projected at 2.1% this year on oil prices and the El Niño weather pattern, before easing to 1.3% in 2027. The bank is also guarding its policy space: at 1.00%, it has roughly 50 basis points of room to cut before hitting 0.50%, the historical low. Small business loans keep shrinking even as large corporate lending grows, and the bank says SME debt repayment ability needs watching.

Why it matters

At 1%, Thailand's policy rate leaves little room to cut if growth stalls, while oil and El Niño inflation could force a rate hike.

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Key Indicators

1.00%

Policy rate

Held since February 2026 after six consecutive cuts totaling 150 basis points.

2.4%

2026 GDP growth forecast

Up from 2.3% in June, but still below potential with benefits concentrated.

2.1%

2026 headline inflation forecast

Expected to rise on oil and El Niño before easing to 1.3% in 2027.

22%

2026 export growth forecast

Driven by technology and AI-related demand from large corporations.

Rate cuts since October 2024

Took the policy rate from 2.50% down to 1.00%.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Don Nakornthab

Secretary, Monetary Policy Committee, Bank of Thailand

Announced the October 28 hold decision

Vitai Ratanakorn

Governor, Bank of Thailand

Said in early October there is no rush to raise rates

Piti Disyatat

Deputy Governor, Bank of Thailand

Said policy will remain accommodative for now

Organizations Involved

Bank of Thailand

Central Bank

Holding policy rate at 1.00%

Thailand's central bank, responsible for monetary policy, price stability, and financial system stability.

Timeline

October 2024 December 2026

6 events Latest: Today

Tap a bar to jump to that date

December 2026
Next MPC meeting scheduled
Upcoming Scheduled Event

The next rate decision is set for December 23, 2026.
December 23rd, 2026
October 2026
MPC holds rate at 1.00% for fourth straight meeting
Today Monetary Policy

Unanimous vote maintains the rate. Bank raises GDP forecasts but flags oil and El Niño inflation risks.
Today
Governor says no rush to raise rates
Statement

Vitai Ratanakorn says monetary policy can't fix structural issues; no urgency to hike.
October 8th, 2026
August 2026
MPC holds rate at 1.00%
Monetary Policy

Decision 4/2026 keeps rates unchanged, noting growth remains low and uneven.
August 26th, 2026
February 2026
Sixth cut brings policy rate to 1.00%
Monetary Policy

The final cut in the easing cycle, totaling 150 basis points from 2.50%.
February 2026
October 2024
BOT begins rate-cutting cycle
Monetary Policy

First of six cuts to support an economy constrained by weak demand and high household debt.
October 2024

Scenarios

Thailand keeps rates at 1% through 2027

Likely Resolves by End of 2027

Discussed by: Reuters poll of 26 economists, all of whom expect no change; most see the rate holding through end-2027.

The bank continues to hold at 1.00% through 2027 as growth stays below potential and inflation eases after the oil and El Niño spike passes. The baht remains under pressure against the dollar, but the BOT sees no reason to move given weak domestic demand and concentrated export benefits. Most economists in a Reuters poll already expect this outcome.

Oil and El Niño push the BOT into a rate hike

Possible Resolves by Q2 2027

Discussed by: MPC statement flagged upside inflation risks from the Middle East conflict and limited energy subsidy capacity; headline inflation is projected at 2.1% for 2026.

Oil prices keep climbing and El Niño drives food prices higher, pushing headline inflation well above the 2.1% forecast and feeding core inflation. Cost pass-through by firms intensifies and medium-term inflation expectations drift up. The BOT raises the rate to defend its inflation credibility, accepting a slower recovery.

Growth stalls and BOT cuts to 0.50%

Unlikely Resolves by Q2 2027

Discussed by: Don Nakornthab noted the historical low is 0.50%, implying about 50 basis points of room; Deputy Governor Piti Disyatat said policy stays accommodative.

The tech and AI export boom fades faster than expected, SME loan contraction deepens, and household debt keeps consumption weak. The BOT cuts the rate to 0.50%, the historical low, but worries this leaves no ammunition if a new shock hits. Governor Ratanakorn's statement that monetary policy can't fix structural issues would prove prescient.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

December 2008 – December 2015

Federal Reserve's zero-rate era (2008–2015)

The Federal Reserve held its policy rate at 0–0.25% for seven years after the 2008 financial crisis. Growth recovered slowly and unevenly, and the Fed repeatedly said the economy was not strong enough to absorb higher rates.

Then

The ultra-low rate supported a gradual recovery but drew criticism as asset prices climbed.

Now

Normalization began in December 2015 with small, widely telegraphed hikes over several years.

Why this matters now

Shows how long a central bank can hold rates near historical lows when growth is weak, and how slow the path back to normal policy can be.

February 1999 – 2010s

Bank of Japan's zero interest rate policy (1999–2010s)

Japan's central bank adopted a 0% policy rate in February 1999 to fight deflation and weak growth. The rate stayed near zero for more than a decade, and the bank eventually resorted to quantitative easing and yield curve control.

Then

The low rate stabilized financial conditions but did not revive growth on its own.

Now

Japan became the case study in running out of conventional policy space, forcing unconventional tools.

Why this matters now

Thailand's MPC explicitly worries about policy space — the room to cut if a crisis hits. Japan shows what happens when that space runs out.