File photo for reference only

 

The Bank of Thailand has reduced its policy rate by 25 basis points to 1.25%, aiming to bolster economic growth amidst political troubles, a strengthening baht, and US tariffs. This marks the fifth rate cut since October 2024, with a total reduction of 125 basis points. The central bank aims to support the slowing economy, as highlighted by recent votes from the Monetary Policy Committee.

 

Economic growth has been sluggish, with projections from the National Economic and Social Development Council indicating a drop from 2% this year to 1.7% in 2026. The third quarter saw only 1.2% year-on-year growth, and the final quarter is expected to perform even worse. The outlook for 2026 and 2027 remains weak, with predicted growth of 1.5% and 2.3%, respectively, failing to keep up with regional peers.

 

Economists surveyed predict a further rate cut to 1.00% in early 2026, while others believe it will hold at 1.25%. Demand-driven inflation remains low, according to the central bank, with inflation expected to stay below the target of 1-3% for the foreseeable future. Interest rates across financial markets have similarly fallen, alleviating some financial burdens, though credit quality issues persist.

 

A strong baht, trading at around 31.53 to the US dollar, complicates export efforts, and small businesses face liquidity problems. The central bank is closely monitoring currency fluctuations, as highlighted by Mr Sakkapop Panyanukul. We expect a sharp decrease in exports, a crucial pillar of the Thai economy, especially with the ongoing US tariffs.

 

Experts like Nattaporn Triratanasirikul from Kasikorn Research Centre express significant concern. With parliament dissolved, potential delays in fiscal policy execution add complexity, while initiatives to boost domestic consumption are on hold. The think-tank expects further economic deceleration, with exports predicted to contract by 1.2% next year due to persistent trade issues and regional tensions, reported the Bangkok Post

 

Key Takeaways:

• Thailand cuts interest rates by 25 basis points to support the economy.
• Sluggish growth and political uncertainties highlight ongoing challenges.
• Export decline and weak domestic consumption continue to pose risks.

 

  Adapted by ASEAN Now from Bangkok Post 2025-12-18

 

 

 

Perhaps it would be good  for someone to remind BOT that

they can'tv go below zero ?

 

That had the opposite effect. CAD down 5 satang

10 minutes ago, Jim Blue said:

Perhaps it would be good  for someone to remind BOT that

they can'tv go below zero ?

 

Wrong....There is a thing called negitive intrest rates

 

You mean you pay the bank for them to

use your money ?

Yes not good for tourism or exports something has to give eventually before it’s too late 

4 minutes ago, Jim Blue said:

You mean you pay the bank for them to

use your money ?

A negative interest rate is an unconventional monetary policy where central banks charge commercial banks to hold their reserves, aiming to spur lending, investment, and spending during economic stagnation or deflation by making saving costly and borrowing cheap

33 minutes ago, Celsius said:

That had the opposite effect. CAD down 5 satang

No signigicant effect on EUR or USD rates so far.

 

A 0.25% reduction hardly comes under the "slashing" definition.

I keep my 800,000 retirement for a whole year for the princely sum of 1,000 baht interest a year

while in Australia I get 4%+.

2 minutes ago, ezzra said:

I keep my 800,000 retirement for a whole year for the princely sum of 1,000 baht interest a year

while in Australia I get 4%+.

Why don't you do the monthly transfers instead and leave your 800,000 in your Aussie bank? Seems like a no brainer to me.

26 minutes ago, ezzra said:

I keep my 800,000 retirement for a whole year for the princely sum of 1,000 baht interest a year

while in Australia I get 4%+.

Good if you live in Australia.

But 4% is about the percentage lost against the Baht in a year.

Zero sum game.

Two year loss almost 12%.

 

For the money I have to fund the retirement visa ,I know it's not a visa so don't

bother commenting ,i have I.3 Million Baht , fixed account and i get . 80 % ,thats

point 80 % , so now i will be getting if lucky maybe .60 % , well below inflation ,

no matter what the Government numbers are , example ,the bread I buy has

just gone up from 46 B to 54 B , 

 

I am now stock piling food that keeps ,last long time, as it's better than money

in the bank , as you can be sure prices are going to rise.

 

regards worgeordie 

41 minutes ago, KhunBENQ said:

Good if you live in Australia.

But 4% is about the percentage lost against the Baht in a year.

Zero sum game.

Two year loss almost 12%.

 

LOL.... easy to see backwards in time.... not so easy to predict the future.

1 hour ago, ezzra said:

I keep my 800,000 retirement for a whole year for the princely sum of 1,000 baht interest a year

while in Australia I get 4%+.

You can keep 400k out of those banks for nearly 7 months.

I still think something fishy is going on there. Someone in another thread - just yesterday - quoted the BoT as saying exports were strong, and that would at least partially account for strong baht. Now BoT says the opposite - exports are in trouble - which was my understanding for some time. The fact the BoT slight rate cut - and ones before it - have meant nothing to the Thai baht's strength says something else is going on, and it's not just a weakening USD.

4 hours ago, Jim Blue said:

Perhaps it would be good  for someone to remind BOT that

they can'tv go below zero ?

 

 

They can, they did in Japan for many years

2 hours ago, ezzra said:

I keep my 800,000 retirement for a whole year for the princely sum of 1,000 baht interest a year

while in Australia I get 4%+.

 

Remind us how much is 4 - 4.07 =

 

And you should change banks because every bank has a savings account that pays 1%, so 800.000 pays you 8000 baht a year

 

1 hour ago, ronnie50 said:

Thai baht's strength says something else is going on, and it's not just a weakening USD

With scammers operating on both sides Myanmar and Cambodia, where would they launder their profits ? Buy gold and sell it in Thailand for Baht. A high demand for THB, mainly caused by the laundry of scam operations is the elephant in the room.

you people are really selfish, how will the elite enjoy powerful discounts when they shop abroad with a weak baht?

On 12/18/2025 at 3:24 AM, webfact said:

The Bank of Thailand has reduced its policy rate by 25 basis points to 1.25% (...)

 

I thought so, as, on the very same day, the baht got stronger... 😆 

On 12/18/2025 at 5:51 AM, Jim Blue said:

Perhaps it would be good  for someone to remind BOT that

they can'tv go below zero ?

 

They need to consult trump he can reduce prices 400, 500 even 600 percent from his recent speech).

On 12/18/2025 at 7:22 AM, flexomike said:

Why don't you do the monthly transfers instead and leave your 800,000 in your Aussie bank? Seems like a no brainer to me.

And then potentially be subject to tax on the remittances?
Who knows when TRD will impose the current Tax obligations on remittances?
 

On 12/18/2025 at 5:51 AM, Jim Blue said:

Perhaps it would be good  for someone to remind BOT that

they can'tv go below zero ?

 

Sure they can

 

Europe did it / doing it

 

It literally costs to bank money 

On 12/18/2025 at 8:12 AM, worgeordie said:

For the money I have to fund the retirement visa ,I know it's not a visa so don't

bother commenting ,i have I.3 Million Baht , fixed account and i get . 80 % ,thats

point 80 % , so now i will be getting if lucky maybe .60 % , well below inflation ,

no matter what the Government numbers are , example ,the bread I buy has

just gone up from 46 B to 54 B , 

 

I am now stock piling food that keeps ,last long time, as it's better than money

in the bank , as you can be sure prices are going to rise.

 

regards worgeordie 

 

Now too late to stockpile DRAM, unfortunately.

I was a fool for not doing so one year ago.

 

Now, maybe, I will stockpile Canned Tuna.

Rice is hardly worth stockpiling.

 

Chicken Eggs do not fluctuate much.

 

I am mostly angry, very angry, about the price of DRAM, actually, for sure.

Quite angry, in fact.

 

This is an artificially created price explosion for DRAM first, then for other memory, sometime in the near offing..

This damages the consumer computer market, and much more.

 

Things are getting TOTALLY skewed (and totally screwed, too), just due to one or two very bad actors (namely Altman).

 

My only hope is that, someday soon, Sammy will be attacked by one of the AI robots, with Sammy's name on it.

 

Regards to you,

Gamma

 

Note:  So, basically, I am just considering sticking with the sticks of DRAM I now have, and I think I can make do with only 32GB of RAM per computer. Not good, of course, but the prices now are too unreasonable.  Will these prices come down after Christmas holiday?  Wait and see, but I doubt it, much.  A truly terrible situation for the consumer computer market, which is an important market for many businesses.

 

The usa cut rates a few days ago.

49 minutes ago, jojothai said:

And then potentially be subject to tax on the remittances?
Who knows when TRD will impose the current Tax obligations on remittances?
 

You make a. Very good point.  But even doing the deposit, what monies will you move to thailand for your living?  Won't they possibly fall into that TBD realm?

It is indeed frustrating when monetary policy fails to produce the anticipated results.  Lowering Thai central bank rates should have resulted in immediate weakening of the Baht -- but thus far, at least against the US$, no meaningful movement.  That's frustrating . . . 

Lower interest rates do not attract buying, it is typically the other way around -- Sell the low yielding currency and buy the high yield currency and live on the carry spread, multiplied with leverage.  Fairly simple concept, so I can understand why Thailand is frustrated and a bit confused -- so are many of the global currency traders.  

22 hours ago, gk10012001 said:

You make a. Very good point.  But even doing the deposit, what monies will you move to thailand for your living?  Won't they possibly fall into that TBD realm?

Yes they could be considered,
In theory all remittances could be considered income unless you can prove its from before 2024 when the tax law changed. Or if there is a double tax treaty that could exempt it from tax in Thailand.
 

On 12/19/2025 at 1:32 PM, gk10012001 said:

The usa cut rates a few days ago.

And the Bank-of-England also did the same thing.

 

Hence little change against the Thai Baht, whose relative strength continues.