Thailand Cuts Interest Rate by 25 bps as Expected

2025-12-17 07:05 By Chusnul Chotimah 1 min. read

The Bank of Thailand lowered its benchmark interest rate by 25 bps to 1.25% at its December 2025 policy meeting, as widely expected.

The central bank has cut its key rate five times over the past year, for a total reduction of 125 bps, to support a sluggish economy grappling with US tariffs, high household debt, a strong baht, and political uncertainty ahead of elections in early February.

The move brings the rate to its lowest level since December 2022.

On the economic outlook, the BoT kept GDP forecasts at 2.2% for this year but revised the 2026 forecast down to 1.5% from 1.6%.

The headline inflation forecast for this year was lowered to -0.1% from flat previously, and for 2026 it was reduced to 0.3% from 0.5%.

The BoT said the subdued inflation reflected lower global energy prices and government subsidies and noted that deflationary risks were low.

The MPC reaffirmed its readiness to adjust monetary policy as appropriate in line with the evolving economic and inflation outlook.



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