Bank of Ayudhya (Krungsri) expects the Monetary Policy Committee (MPC) to hold the policy interest rate at 1% throughout 2026, viewing that a rate hike or cut is difficult due to limited policy space, and that using interest rate policy alone cannot solve structural problems. A senior director of the Global Markets division said that targeted measures, such as resolving debt for vulnerable groups and enhancing liquidity for SMEs, are more appropriate. He also recommended attracting foreign direct investment (FDI) to enhance competitiveness and escape the low and uneven economic growth. He noted that the Thai economy expanded 2.4% in the first half of the year, but private consumption remains weak, and SME loans have contracted for 16 consecutive quarters. Meanwhile, the baht is likely to strengthen slightly, with Krungsri estimating a range of 32.25-33.75 baht per US dollar. It also expects the Fed to hold rates this year, although some in the market expect one hike.
Bank of Ayudhya PCLKrungsri expects MPC to hold rates at 1% through 2026, which may affect Bank of Ayudhya's net interest margin but is not directly discussed.
Krungsri expects baht to strengthen slightly, estimating 32.25-33.75 per USD, implying USD weakens relative to THB.
