The Bank of Thailand cut its benchmark interest rate by 25 basis points to 1% at its February 2026 meeting, defying market expectations for a pause and bringing the rate to its lowest level since October 2022. The Monetary Policy Committee voted 4–2 in favor of the reduction, seeking to maintain accommodative financial conditions to support the economic recovery, alleviate debt burdens for SMEs and households, and anchor medium‑term inflation expectations amid elevated downside risks.
Policymakers noted that the effects of previous rate cuts are still working their way through the economy. Although economic growth in the fourth quarter of 2025 was stronger than earlier estimated, overall activity is expected to remain below potential in 2026 and 2027 and to be uneven across sectors, reflecting structural constraints and intensifying competitive pressures. In addition, the outlook for headline inflation has been revised, with the rate now expected to return to the target range later than previously anticipated—shifting from the first half of 2027 to the second half.
