Mr. Witai Rattanakorn, Governor of the Bank of Thailand (BOT), rebutted speculation that the central bank will keep the policy rate unchanged for an extended period, stating that the BOT is not committed to holding rates for any specific duration and that the next decision could be either a hike or a cut, depending mainly on economic data. In his first interview with Bloomberg News since taking office in October, Mr. Witai said there is not yet sufficient evidence to support a rate increase or cut, and future decisions will depend on inflation trends, the baht's value, and economic prospects. Meanwhile, all 23 economists surveyed by Bloomberg expect the BOT to keep the rate at 1%, with some seeing it held until the end of 2027. However, the BOT Governor noted that keeping rates low for too long carries risks, and the BOT may consider raising rates if inflation persists or the baht weakens sharply, while a new economic shock could prompt a cut. Regarding the baht, Mr. Witai said the BOT has been closely managing the foreign exchange market to reduce volatility, not to gain a trade advantage. The baht has depreciated about 4% against the US dollar since the start of the year but remains stronger than many regional peers, and has appreciated about 2% this month.
BOT Governor signals possible rate hike if baht weakens sharply, but current stance is data-dependent and no immediate action; baht has depreciated 4% vs USD but appreciated 2% this month.
BOT Governor's comments suggest rates may stay low for longer, with no imminent hike, keeping yields subdued.
