According to Jinshi Data, Barclays economists said after the release of December inflation data that the Bank of Thailand may cut interest rates twice this year. As inflation is within the Bank of Thailand's target range of 1%-3%, Barclays believes that monetary policy will continue to focus on the balance between economic growth and financial stability.
The central bank may not cut rates too many times and is unlikely to lower them below 1.75%, as it prefers to retain policy space and keep rates high enough to prevent the buildup of financial stability risks. Barclays believes that 1.75% is the end point rate for this cycle.
The Bank of Thailand highlighted growth risks posed by global uncertainties, which could ease once there is more clarity on U.S. trade tariffs.