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Thailand: BoT pause extended as stagflation risks build – DBS

DBS Group Research economist Chua Han Teng expects the Bank of Thailand (BoT) to keep its policy rate at 1.00% through end-2026 as stagflationary pressures from Iran-related supply shocks hit growth and inflation.

🔗 Source

💡 DMK Insight

The Bank of Thailand’s decision to maintain a 1.00% policy rate through 2026 signals a cautious approach amid stagflation risks. With ongoing supply shocks from Iran impacting both growth and inflation, traders should brace for a prolonged period of low interest rates. This could lead to a weaker Thai baht, especially if inflation continues to rise without corresponding economic growth. Watch for how this policy affects the broader Southeast Asian markets, particularly in currencies and commodities linked to Thailand’s economy. If inflation pressures mount, the BoT may face increasing scrutiny, potentially leading to a shift in policy sooner than expected. Keep an eye on inflation metrics and GDP growth forecasts as key indicators of future rate adjustments.

📮 Takeaway

Monitor Thailand’s inflation rates and GDP growth forecasts closely; a shift in BoT policy could impact the baht and regional markets significantly.

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