The Bank of Thailand's Monetary Policy Committee (MPC) unexpectedly cut the policy rate by 25 basis points to 1.00% from 1.25% on 25 February 2026, with immediate effect. The committee, which had six members at the meeting because of a vacancy, voted 4-2 for the reduction.
MPC RATIONALE
The majority judged that further easing was needed to ensure that financial conditions remain supportive of the economic recovery, to further alleviate debt burdens for small and medium-sized enterprises (SMEs) and households, and to anchor medium-term inflation expectations. The two dissenting members preferred to hold the rate at 1.25%, judging that the policy stance remained consistent with the economic and inflation outlook and that the transmission of earlier rate cuts to the economy was still under way.
The committee said economic growth was projected to remain below potential in 2026 and 2027 because of structural impediments and intensified competition, although fourth-quarter 2025 growth had been better than expected. Headline inflation faces increased downside risks from energy prices and government measures, and is now expected to return to the target range in the second half of 2027 rather than the first half. Credit in the banking system continued to contract.
Among the risks the MPC said it would monitor were uncertainty over US tariff measures, delays to the 2027 budget and challenges facing SMEs, including limited access to credit and the appreciation of the baht.
LOWEST RATE SINCE 2022
The move was the sixth 25-basis-point cut since the Bank of Thailand began easing in October 2024 from 2.50%, bringing cumulative reductions to 150 basis points. The previous cut, to 1.25%, came in December 2025. At 1.00%, the policy rate is at its lowest level since 2022.