Bank of Thailand Maintains Benchmark Interest Rate at 1%

The Bank of Thailand voted unanimously on August 26 to maintain its benchmark one-day repurchase rate at 1%, marking the third consecutive meeting without a change. This rate is the lowest since September 2022 and follows a series of six cuts totaling 150 basis points between October 2024 and February 2026.

The central bank stated the current rate is appropriate to support an economic recovery hindered by an aging population, high household debt, and energy costs linked to Middle East conflicts. While the Thai economy grew 1.9% annually in the second quarter of 2026, this represents a decrease from 2.8% in the previous quarter and the slowest growth among the six main ASEAN economies.

To stimulate domestic demand, the government of Prime Minister Anutin Charnvirakul is utilizing 400 billion baht in emergency borrowing for energy-transition projects and cash handouts. The central bank noted that the artificial intelligence boom is driving investment and exports, though it warned that an El Niño dry spell could push headline inflation higher through the first quarter of 2027.