MPC Maintains Policy Rate at 1% Amid Uneven Growth

Post Today•Economy•16h ago

Reader Briefing

The Monetary Policy Committee unanimously voted to keep the policy interest rate at 1.00% per year on August 26, 2026.

•The Monetary Policy Committee maintained the policy rate at 1.00% per year during its 4th meeting of 2026.
•Export and private investment grew better than expected due to the technology and AI cycle.
•SME loans continued to contract as financial institutions remain cautious about high-risk borrowers.
•The committee identified risks from the war in the Middle East and international trade barriers.

Overview

•The Monetary Policy Committee voted unanimously on August 26, 2026, to maintain the policy interest rate at 1.00% per year.
•The Monetary Policy Committee had previously voted 4 to 2 on February 25, 2026, to reduce the rate from 1.25% to 1.00%, and voted unanimously to hold it on April 29, 2026.
•The Monetary Policy Committee observed that exports and private investment expanded better than expected, while private consumption grew lower than expected due to rising living costs.
•The Monetary Policy Committee noted that the overall economy expands slowly and unevenly, with SMEs facing adjustment obstacles and intense competition.
•Don Nakornthap stated that general inflation is expected to rise until the first quarter of 2027 due to the El Nino phenomenon and cost pass-throughs.
•The Monetary Policy Committee identified volatility in the Thai Baht against the US Dollar influenced by the Middle East situation and US Federal Reserve monetary policy views.
•The Monetary Policy Committee emphasized the need to monitor the debt repayment ability of SMEs and vulnerable household groups.
•The Monetary Policy Committee believes the current interest rate is appropriate to support economic recovery while maintaining price stability.

Full article content is available on the original source.

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Source: Post Today (Original)

Key Quotes

Don Nakornthap

"The Thai economy has received continuous momentum from the technology and artificial intelligence cycle, but the growth rate remains low and uneven."

เศรษฐกิจไทยได้รับแรงส่งต่อเนื่องจากวัฏจักรเทคโนโลยีและปัญญาประดิษฐ์ แต่อัตราการเติบโตยังอยู่ในระดับต่ำและไม่ทั่วถึง

Key Entities

Organization

Monetary Policy Committee(คณะกรรมการนโยบายการเงิน)

The committee that resolves the policy interest rate to maintain price stability and sustainable economic growth.

Bank of Thailand(ธนาคารแห่งประเทศไทย)ℹ️

The central bank of Thailand where Don Nakornthap serves as Assistant Governor.

US Federal Reserve(ธนาคารกลางสหรัฐฯ)ℹ️

The central bank of the United States whose monetary policy direction influences market views and the Thai Baht.

Person

Don Nakornthap(ดอน นาครทรรพ)

Assistant Governor for Monetary Policy at the Bank of Thailand and Secretary of the Monetary Policy Committee.

Place

Middle East(ตะวันออกกลาง)ℹ️

A region where ongoing war is creating uncertainty and affecting the Thai Baht exchange rate.