The Thai baht extended its decline to around 33.8 per dollar in late July, marking its weakest level since April 2025, as expectations of a looser monetary policy stance and persistent domestic challenges pressured the currency. The Bank of Thailand left its policy rate unchanged at 1% in June to support an uneven economic recovery, with officials indicating that monetary policy would remain accommodative as growth continues to run below potential.
Moderating inflation has given policymakers additional room to maintain supportive conditions. Annual consumer price inflation eased to 2.42% in June from 2.79% in May, staying comfortably within the BOT’s 1%-3% target range. At the same time, weak domestic demand, high household debt, and sluggish credit growth continue to drag on economic momentum.
External factors have added to the pressure. Rising oil prices amid escalating tensions in the Middle East have weighed further on the baht, as Thailand’s heavy reliance on energy imports has heightened concerns about higher import costs and a deterioration in the external balance.
