With more policy easing anticipated later this year, Thailand’s central bank dropped its policy rate to a nearly three-year low on Wednesday to support a faltering economy beset by US tariffs, declining prices, and sluggish foreign visitor arrivals.
The monetary committee unanimously lowered the one-day repurchase rate by 25 basis points to 1.50%, the lowest level since late 2022, as was generally anticipated. In ten months, it was the fourth decrease.
The Bank of Thailand predicted that although the economy will grow this year and next, coming in close to previous projections of 2.3% and 1.7%, respectively, US trade policies would worsen structural issues and reduce competitiveness, making small enterprises particularly susceptible.
According to the committee, monetary policy should continue to be accommodating in order to boost the economy, the statement stated. Assistant Governor Sakkapop Panyanukul told a press conference following Wednesday’s decision that there is some upside to this year’s growth prediction due to a spike in exports.
As shippers rushed to avoid US tariffs, exports, a major development engine, increased 15% yearly in the first half of 2025. However, on August 7, the United States imposed higher duties on most trade partners, with Thai imports subject to 19% of the total.
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