Thailand 10Y Yield Nears 4-Month Low

Thailand's government bond yield fell to around 1.94% in early July, nearing its lowest level in four months, after the Bank of Thailand reaffirmed its accommodative policy stance. Minutes from its June meeting indicated policymakers would keep interest rates unchanged until the economy returns to its potential growth rate of at least 2.7%. The central bank said current monetary settings continue to support the recovery, with inflation contained within its 1%–3% target range and no immediate need for tightening. However, officials reiterated that rate hikes could be warranted if inflation becomes unanchored, financial stability risks intensify, or the economy reaches its growth potential. The BOT expects the economy to grow 2.3% this year before slowing to 1.8% in 2027, while warning that inflation risks persist from a potential El Niño event and geopolitical tensions in the Middle East.

Thailand 10 Year Government Bond Yield increased to 2.34%, the highest since February 2025. Over the past 4 weeks, Thailand 10Y Bond Yield gained 9.20 basis points, and in the last 12 months, it increased 36.90 basis points.

Thailand’s 10-year government bond yield climbed to around 2.24%, hitting its highest level since February 2025 as foreign investors accelerated their exit from local assets. Global funds have dumped more than $1 billion of Thai bonds this month, on track for its largest foreign outflow since 2022, according to the Thai Bond Market Association. The selling intensified on Friday, when investors withdrew about $1.2 billion, the biggest single-day outflow since March 2022, while also offloading roughly $1.2 billion in equities, the steepest stock selloff in two years. The pullback reflects a broader retreat from emerging markets as escalating Middle East tensions fuel risk aversion, with surging oil prices stoking inflation concerns and worsening current-account pressures. Thai assets have borne the brunt of the shift, with local bonds delivering an 8.5% loss to dollar-based investors on a hedged basis in March, among the worst in the region, while equities have dropped more than 8%.