Krungthai COMPASS คาด กนง. ตรึงดอกเบี้ย 1% ยาวถึงสิ้นปี 2570Krungthai COMPASS Predicts MPC Will Maintain Interest Rate at 1% Until the End of 2027

Krungthai COMPASS predicts that the Monetary Policy Committee (MPC) will maintain the interest rate at 1% until the end of 2027, indicating that the Thai economy is still growing below potential and that benefits are still concentrated. It assesses that the economy is expanding in a K-Shape. The Krungthai COMPASS Research Center anticipates that the MPC will keep the policy interest rate at 1.00% until the end of 2027. Although the MPC has adjusted its forecast for the Thai economy in 2026 to 2.4% from the previous 2.3%, the growth rate remains below potential, and benefits remain concentrated.

This is consistent with the view of Krungthai COMPASS, which assesses that the economy is expanding in a K-Shape, where the benefits from the AI Cycle are limited to related businesses and currently capture relatively little value due to a high reliance on imported content. Meanwhile, household debt remains high, and SMEs face challenges in adapting and intense competition, which limits the recovery of purchasing power and private consumption. It is anticipated that the MPC will maintain the policy interest rate at 1.00% until the end of the year.

Amid an economy that is still expanding below potential and recovering in a K-Shape, Krungthai COMPASS indicates that two risk factors must be monitored regarding the interest rate differential between the United States and Thailand, which affects the movement of the Thai baht. The baht weakened during the period when the market adjusted its expectations for the Fed's interest rate trend, resulting in capital movements being volatile. 1. Movement of the Thai baht, following the Federal Reserve's (Fed) interest rate hike on September 16, 2026.

The market still expects that the Fed will raise interest rates further, leading to the interest rate differential between the United States and Thailand widening to 317 bps at the end of 2026, the widest in the region. During the period when the market increased its expectations for the Fed's interest hikes (September 16-28, 2026), the Thai baht weakened by 0.7%, ranking second only to the Japanese yen. However, during the period when the market lowered its expectations for the Fed's interest rate (October 14-26, 2026), the differential at the end of the year narrowed to 306 bps, but the baht still weakened by 0.7%, which is a significant depreciation compared to other countries in Asia.

2. Regarding capital movements, the changing interest rate differential is one factor influencing foreign investors' decisions. At the end of September, when the market adjusted its expectations for the Fed's peak interest rates, foreign investors sold a net 27 billion baht in bonds and stocks within three trading days (September 25-29). Conversely, during the period when the market lowered its expectations (October 15-26), foreign investors returned to buy a net 15 billion baht in bonds, reflecting the risk to capital movements during a volatile period of interest rate policy trends.

This impacts the movement of the Thai baht. The uncertainty of the baht arising from such factors will pressure risk management, especially in transactions involving foreign currencies, and thus the stability of external factors. Therefore, it is essential to continue to monitor the fluctuating situation in the financial market closely. Read more - The MPC unanimously decided to maintain the policy interest rate at 1.00%, expected to remain constant throughout the year - The MPC unanimously decided! To maintain the policy interest rate at

1.00% per annum - Keep an eye on the 'Fed' - 'MPC' meetings for insights on interest rate policy direction. Follow us at - Website: https://www.thebangkokinsight.com/ - Facebook: https://www.facebook.com/TheBangkokInsight - X: https://twitter.com/BangkokInsight - Instagram: https://www.instagram.com/thebangkokinsight/ - Youtube: https://www.youtube.com/channel/UCYmFfMznVRzgh5ntwCz2Yxg