In a unanimous decision, Thailand’s Monetary Policy Committee (MPC) has voted to cut the policy interest rate by 0.25%, bringing it down from 1.75% to 1.50%.
The move, announced at the committee’s fourth meeting of the year, is a strategic effort to address growing vulnerabilities in certain sectors of the economy, particularly among small and medium-sized enterprises (SMEs) and low-income households.
While the MPC acknowledged that Thailand’s overall economic growth for 2025 and 2026 is projected to remain near previous estimates, it expressed concern that new US tax measures would exacerbate existing structural problems and diminish the country’s competitive edge.
Sakkapop Panyanukul, the MPC Secretary, clarified that the rate reduction wasn’t triggered by a significant change in the overall economic outlook. Instead, it was a proactive response to the increasingly challenging financial conditions faced by specific groups.
He noted that while the overall economy isn’t as severe as during the COVID-19 pandemic, some areas, such as credit availability for SMEs with sales under 20 million baht, are showing persistent weakness.
This tightening of credit, coupled with a decline in loan demand from large corporations due to economic uncertainty, has led to a continuous contraction in lending.