Krungsri Research Forecasts MPC Rate Hold

Prachachat•Economy•1d ago

Reader Briefing

Krungsri Research predicts the MPC will maintain the interest rate at 1.00% to support economic recovery while monitoring global tensions and financial tightening.

•Krungsri Research expects the MPC to keep the interest rate at 1.00% during the August 26 meeting.
•Thai commercial bank loans in Q2 grew by 2.0% YoY, driven by large businesses (+6.6%) while SMEs and consumer loans contracted.
•Tensions between the US and Iran remain high after 60-day negotiations ended on August 17 without an agreement.
•The US Treasury increased the maximum buyback limit for 10-20 and 20-30 year bonds to at least 4 billion dollars from September 9 to November 4, 2026.

Overview

•Thai commercial bank loans in Q2 grew 2.0% YoY, but SME and consumer loans contracted by 4.6% and 0.6% respectively.
•The NPL to total loan ratio decreased slightly to 2.82% from 2.85% in the previous quarter.
•Krungsri Research expects the Monetary Policy Committee to maintain the interest rate at 1.00% at the August 26 meeting to support economic recovery.
•US-Iran negotiations ended on August 17 without an agreement, increasing the risk of Iran pushing up global oil prices.
•The US Treasury increased the bond buyback limit for 10-20 and 20-30 year bonds to at least 4 billion dollars from September 9 to November 4, 2026.
•Krungsri Research expects the Fed to maintain the policy rate to monitor economic and inflation developments in the second half of the year.
•China's economy has weakened with July retail sales growing by only 0.6% YoY and significant contractions in infrastructure and real estate investment.

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Key Entities

Organization

Krungsri Research(วิจัยกรุงศรี)

A research entity of Bank of Ayudhya that published a report on the global and Thai economy.

Bank of Ayudhya Public Company Limited(ธนาคารกรุงศรีอยุธยา จำกัด (มหาชน))

The parent organization of Krungsri Research.

Bank of Thailand(ธนาคารแห่งประเทศไทย)ℹ️

The organization that reported on commercial bank loan growth in Q2.

Monetary Policy Committee(คณะกรรมการนโยบายการเงิน)

The committee expected by Krungsri Research to maintain the interest rate at 1.00% on August 26.

Ministry of Finance(กระทรวงการคลัง)ℹ️

The US government entity that announced an increase in the bond buyback limit.

Fed(เฟด)

The organization expected by Krungsri Research to maintain the policy rate.

Place

United States(สหรัฐฯ)ℹ️

A country involved in negotiations with Iran and facing costs of living and fiscal deficit issues.

Iran(อิหร่าน)ℹ️

A country involved in negotiations with the United States that may respond to economic pressure by raising oil prices.

China(จีน)ℹ️

A country whose economy has weakened, specifically in retail sales and investment.

Middle East(ตะวันออกกลาง)ℹ️

A region characterized by high tension in the context of the global economic report.