Bank of Thailand maintains 1.00% policy rate with expectations for a hold through 2026, as DBS warns of potential steepening risks in long-end bond yields driven by global energy prices and US Treasury spillovers.
The Thai Baht is expected to remain directionally neutral as the Bank of Thailand maintains its policy rate at 1.00%. With the central bank signaling a hold through 2026, the currency lacks a clear catalyst for significant appreciation or depreciation in the near term.
The Bank of Thailand has held the policy rate at 1.00% for four consecutive meetings.
The central bank is expected to remain on hold through 2026.
Short-end Thai government bond yields are projected to remain stable due to the Bank of Thailand's commitment to keep rates unchanged through 2026. However, long-end yields face upward pressure and potential steepening due to external factors including global energy and food price volatility and spillovers from US Treasury markets.
Short-end yields are expected to stay stable as the BoT maintains its current policy rate.
Long-end yields face steepening risks driven by global energy and food price pressures and potential spillovers from US Treasury markets.
US Treasury spillovers are cited as a potential upward pressure on Thai long-end yields, implying possible bearishness for US Treasury prices if global spillovers intensify.
The Bank of Thailand maintained its policy rate at 1.00% for the fourth consecutive meeting, signaling a prolonged period of monetary stability. DBS Group Research expects the central bank to remain on hold through 2026, keeping short-end government bond yields anchored despite potential volatility in the long end of the curve.
DBS Group Research expects the Bank of Thailand to keep its policy rate at 1.00% through 2026.
While short-end yields remain stable, long-end yields face steepening risks due to global energy and food price pressures, alongside potential US Treasury spillovers.