The Bank of Thailand kept its policy rate at 1.00%, in line with market
expectations, and said it is reassessing economic risks from the Middle East
conflict. While war-related risks have eased, uncertainty remains elevated.
Several central banks, including the Fed, have taken a wait-and-see stance;
Japan, Indonesia and the Philippines raised rates last week to offset
conflict-related shocks. The BOT said pre-ceasefire cost shocks had squeezed
firms, weakened household purchasing power and hit tourism through higher costs
and travel constraints, and that lagged effects will continue to weigh on
growth. It also flagged El Nifio-driven food supply risks and ongoing
uncertainty from US tariff policy. Many economists expect the BOT to remain on
hold for the rest of the year, maintain an accomodative stance to support a
still-fragile economy.
