Krungsri Research expects MPC to hold policy rate at 1.00% at August 26 meeting
MacroGeopolitics
Krungsri Research expects the Monetary Policy Committee to keep the policy rate at 1.00% at its meeting on August 26 to support the continued recovery of the Thai economy. Commercial bank lending in the second quarter grew 2.0% from a year earlier, with large corporate loans expanding 6.6%, while SME loans contracted 4.6% and consumer loans contracted 0.6%, marking the fourth and third consecutive years of decline respectively. The non-performing loan ratio edged down to 2.82% from 2.85% in the previous quarter. On the global economy, Middle East tensions remain elevated after the 60-day talks between the United States and Iran ended without an agreement on August 17, and the United States is preparing a new round of sanctions on Iran, which could push global oil prices higher. Long-term US Treasury yields fell temporarily after the Treasury increased buybacks of 10- to 30-year bonds to at least 4 billion dollars, starting September 9 through November 4, 2026. Meanwhile, China's economy has weakened, with July retail sales of goods growing only 0.6% from a year earlier and infrastructure investment contracting 37.6% in the first seven months.
