DBS Group Research economist Chua Han Teng notes that the Bank of Thailand surprised markets with a 25bps rate cut to 1.00% at its first 2026 meeting, following earlier easing since October 2024. DBS expects an extended pause as monetary policy space has narrowed, while downside risks to inflation and growth, and tight credit conditions, keep further easing risks skewed lower.

BOT pause after surprise rate cut

"The Bank of Thailand (BOT) delivered a surprise 25bps policy rate cut to 1.00% at its first meeting of 2026 on February 25, in a 4-2 vote."

"The back-to-back easing aimed to ensure financial conditions support the economy, alleviate debt burdens of households and small businesses, and anchor medium-term inflation expectations amid rising downside inflation risks."

"We expect the BOT to enter an extended pause after yesterday’s move."

"The Monetary Policy Committee signalled that the current policy stance is sufficiently accommodative, aligning with the economic and inflation outlook, while being vigilant about the build-up of medium-term financial imbalances arising from low interest rates."

"The BOT will monitor the ongoing transmission of policy rate cuts to the economy in the coming months."

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