• Notification Date: 07-01--2025
• Notification No: N/A

Thai Central Bank Set to Taper Rate Hike as Geopolitical Uncertainty, Global Risks Rise

Thailand's central bank is poised to adjust its monetary policy should the economic situation change drastically, amidst rising global uncertainties, officials said on Monday. Deputy Governor Piti Disyatat said that the Bank of Thailand (BOT) would take data closely for any signs that geopolitical tensions were affecting the economy and the monetary policies of other major trading nations.

The central bank left its key interest rate unchanged at 2.25% in December, following a surprise cut in October, and will review rates again on February 26. In deciding to leave rates unchanged, the officials deemed the move "robust policy," but also said that monetary policy is less effective when there is high uncertainty. Senior Director Surach Tanboon said that lowering interest rates may not have a great positive effect on the economy when uncertainty is so high.

Despite the uncertainty, the BOT kept its growth forecast for the Thai economy, with growth expected to reach 2.7% in 2024 and 2.9% in 2025. Growth is likely to be led by exports, tourism, and domestic demand. The central bank also said potential protectionism under U.S. President-elect Donald Trump could bring more Chinese goods to Thailand, boosting exports.

However, volatility in the Thai baht is expected to rise this year according to various factors in global markets. "We must manage the volatility that will continue to increase," declared Assistant Governor Sakkapop Panyanukul. Flexibility on the part of the BOT would be needed because Thailand remains in uncertain times.