# Bank of Thailand Cuts Policy Rate to 1.50%, Signals More Easing Ahead

- Link: https://www.thailand-business-news.com/banking/239469-bank-of-thailand-cuts-policy-rate-to-1-50-signals-more-easing-ahead
- Published: 2025-08-15T21:35:59+07:00
- Author: J. Allan

The Bank of Thailand (BoT) has lowered its benchmark interest rate for the fourth
time in 10 months, cutting it by 25 basis points to 1.50% in an effort to bolster
a sluggish economy grappling with negative inflation, weak consumer sentiment, and
the fallout from U.S. tariffs.

## Key takeaways

 * Bank of Thailand cuts policy rate to 1.50%, marking the fourth reduction in 10
   months to counter weak growth and negative inflation.
 * MPC cites U.S. tariffs, fragile SMEs, and subdued consumer confidence as key 
   economic headwinds.
 * Analysts see potential for additional rate cuts in October and December if economic
   conditions deteriorate.

The Monetary Policy Committee (MPC) voted unanimously on Wednesday for the reduction,
with secretary Sakkapop Panyanukul noting that the move aims to maintain accommodative
financial conditions and ease pressure on vulnerable sectors, including small and
medium-sized enterprises (SMEs) and low-income households.

ADVERTISEMENT

Since October 2024, the central bank has trimmed its policy rate by a total of 100
basis points, with previous cuts in February, April, and August. Inflation has remained
below the BoT’s 1–3% target since April, while recent data points to further signs
of economic weakness.

> “The Thai economy in 2025 and 2026 is projected to expand close to the previous
> assessment. Nevertheless, U.S. trade policies will exacerbate structural problems
> and weaken competitiveness,” the MPC said in its statement. GDP growth is forecast
> at 2.3% for 2025, with updated projections due at the October meeting.

The rate cut came sooner than many analysts expected. Kasikorn Research Center had
anticipated two more cuts this year but not at this meeting, citing the MPC’s focus
on the compounding strain faced by SMEs from tariffs and structural challenges. 

SCB EIC, however, said the move was in line with rising economic risks and persistently
subdued inflation.

Despite securing a reduced 19% U.S. tariff on certain exports, Thai producers face
margin pressure as American importers push for lower prices, with other countries
likely to introduce protectionist measures in response.

Credit growth remains negative, weighed down by high debt repayments, tighter credit
conditions for SMEs, and reduced borrowing from large firms. 

A slowdown in the second half of 2025 is expected, driven by weaker tourism from
regional competition and softer private consumption.

### Related**Posts**

###  󠀁[Thailand’s household debt crisis threatens to keep growth below potential despite lower debt ratios](https://www.thailand-business-news.com/finance/333212-thailands-household-debt-crisis-threatens-to-keep-growth-below-potential-despite-lower-debt-ratios)󠁿

###  󠀁[USD to THB Exchange Rate Today: Thai Baht Moves with Global Market Trends](https://www.thailand-business-news.com/banking/331689-usd-to-thb-exchange-rate-today-thai-baht-moves-with-global-market-trends)󠁿

###  󠀁[Bank of Thailand Unveils Framework to Shield Financial Sector from Illicit Activities](https://www.thailand-business-news.com/banking/328409-bank-of-thailand-unveils-framework-to-shield-financial-sector-from-illicit-activities)󠁿

###  󠀁[Climate Transition Pathways and Credit Risks for Firms in ASEAN+3](https://www.thailand-business-news.com/asean/330815-climate-transition-pathways-and-firm-level-credit-risks-in-asean3)󠁿

The next MPC meeting is scheduled for October 8, shortly after incoming governor
Vitai Ratanakorn assumes office. 

Analysts expect another rate cut in October, with a possible third reduction in 
December if conditions worsen.