Thailand’s central bank unexpectedly cut its policy interest rate on Wednesday, February 25, lowering the one-day repurchase rate by 25 basis points to 1.00 percent. The Bank of Thailand’s monetary policy committee voted 4-2 in favour of the reduction at its first review of the year. The baht pared gains after the announcement but remains up about 1.3 percent against the US dollar so far this year, while Thailand’s main stock market extended gains to rise 1.8 percent on the day.

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Only six of 27 economists in a Reuters poll had forecast a quarter-point cut at this week’s meeting, with the rest predicting no change. Wednesday’s decision marked the sixth rate reduction since October 2024. The rate was also lowered at the previous review in December.

The central bank said economic growth is projected to remain below potential in 2026 and 2027 and uneven across sectors, reflecting structural impediments and intensified competition. On Tuesday, BOT Governor Vitai Ratanakorn said fiscal and monetary policy should be deployed to lift growth towards potential at 2.7 percent this year. Current expectations are for 1.9 percent expansion, compared with a December forecast of 1.5 percent growth, while the economy grew 2.4 percent last year.

Thailand’s economy, Southeast Asia’s second-largest, has lagged regional peers since the pandemic and faces challenges including US tariffs, high household debt and the strength of the baht. The currency’s gains this year add to a 9 percent rise against the dollar last year, which the central bank said has tightened financial conditions for exporters, particularly those facing intense price competition and low profit margins.

Thainewsroom reported that uncertainty over US trade policy remains a key concern. US President Donald Trump said he will set global tariffs at 15 percent after the Supreme Court struck down his tariff regime, below the 19 percent rate previously levied on Thailand. The central bank said it is necessary to monitor uncertainties surrounding US tariff measures, the 2027 budget delay, and the adjustment of SMEs facing heightened competition, limited access to credit and the stronger baht.mThe Bank of Thailand’s next interest rate meeting is scheduled for April 29.

Key Takeaways

• The Bank of Thailand cut its policy rate by 25 basis points to 1.00 percent in a 4-2 vote.

• Growth is forecast below potential, with 2026 expansion expected at 1.9 percent against a 2.7 percent potential rate.

• US tariff uncertainty and a strong baht remain major risks to exporters and overall economic performance.

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Adapted by ASEAN Now Thainewsroom 26 Feb 2026

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Can't save money, can't invest in the stock market. Baht strong so buying dollars the only alternative.

21 minutes ago, Purdey said:

Can't save money, can't invest in the stock market. Baht strong so buying dollars the only alternative.

A bit late to be looking at gold I suspect!

What's scary is that he's promoting sub-prime lending to small firms, meaning small companies that no one wants to loan money to, even family. This never works.

46 minutes ago, Purdey said:

Can't save money, can't invest in the stock market. Baht strong so buying dollars the only alternative.

Buying dollars seems like a losing bet considering Thai rates are at 1%

Its really about the exchange rates not interest rates

At least something's heading in the right direction.

3 hours ago, Celsius said:

Buying dollars seems like a losing bet considering Thai rates are at 1%

And why would that be?

Currently paying 31 baht for a dollar. With low interest rates the baht is supposed to weaken, and you get more baht for the dollars when exchanging back.

4 hours ago, Georgealbert said:

Current expectations are for 1.9 percent expansion, compared with a December forecast of 1.5 percent growth, while the economy grew 2.4 percent last year.

Wasn't there a report the other day that exports had increased by a stunning 24%, so economy must be very strong.

5 hours ago, davb said:

What's scary is that he's promoting sub-prime lending to small firms, meaning small companies that no one wants to loan money to, even family. This never works.

I agree- and these borrowers are more likely to be at risk of default

53 minutes ago, Legal Lifeline said:

6 hours ago, davb said:

What's scary is that he's promoting sub-prime lending to small firms, meaning small companies that no one wants to loan money to, even family. This never works.

I agree- and these borrowers are more likely to be at risk of default

Why you say that? Wasn't the sub-prime lending an enormous success in the US, or did I read that wrong? 😅

Great, that will mean a better exchange rate for us farangs who bring money into the country.

I might be abele to afford a large bottle of beer while sat at a bar instead of nursing half a pint all night. 😃

Interest rate reflects the hapless state of Thailands economy... Then the following article highlighting the high baht hurting rice exports. Complete basket case on a fast track to bottom of ASEAN unless something changes

23 hours ago, davb said:

What's scary is that he's promoting sub-prime lending to small firms, meaning small companies that no one wants to loan money to, even family. This never works.

Wasn't a similar approach fostered by Clinton a component of the crash?

On 2/26/2026 at 4:58 AM, Purdey said:

Can't save money, can't invest in the stock market. Baht strong so buying dollars the only alternative.

The baht has been getting weaker against the AUD.

21 hours ago, mfd101 said:

At least something's heading in the right direction.

Just more household debt

On 2/26/2026 at 9:03 AM, CallumWK said:

And why would that be?

Currently paying 31 baht for a dollar. With low interest rates the baht is supposed to weaken, and you get more baht for the dollars when exchanging back.

Except it doesn't work that way in Thailand,

Baht still getting stronger despite the rate cut