FX.co ★ Bank of Thailand Holds Rates Unexpectedly

The Bank of Thailand decided to maintain its benchmark interest rate at 1.5% during its policy meeting in October 2025, contrary to market predictions that anticipated a reduction to 1.25%. This rate remains at its lowest point since February 2023. The forecast for headline inflation has been adjusted to 0% for 2025 and 0.5% for 2026, with expectations of a gradual return to the central bank’s target range of 1%–3% by early 2027. Core inflation is projected to hold steady at 0.9% in both 2025 and 2026. In September 2025, Thailand experienced a 0.72% year-on-year decline in consumer prices, marking the sixth consecutive month of deflation and remaining significantly below the central bank's target range. Projections for Thailand’s GDP include a growth rate of 2.2% in 2025 and 1.6% in 2026. The economy grew by 2.8% year-on-year in the second quarter of 2025, signifying the slowest growth rate since the second quarter of 2024. The Monetary Policy Committee (MPC) reaffirmed its supportive approach and expressed its willingness to modify policy as economic and inflation conditions evolve.