Bank of Thailand says Thai-US interest rate gap is not pressuring capital outflows, with net foreign inflows of 50 billion baht

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The Bank of Thailand said the interest rate gap between Thailand and the United States is not creating pressure on capital flows or the baht. Surat Tanboon, a senior director at the Bank of Thailand's Monetary Policy Department, said the market has already absorbed and anticipated the interest rate gap trend, as reflected in the baht's stable movement. He also noted Japan's rate hike to 1.25%, which is not significantly far from Thailand's level, along with the Bank of Japan's 7-to-2 split decision, which was not unanimous, leading the market to reduce the weight it places on the next rate hike. The Bank of Thailand assesses that its policy rate of 1% remains appropriate for an economy recovering below its potential and unevenly, with inflation tending to rise on supply-side factors and expected to decline in 2027. External stability remains strong, with net international reserves of more than 300 billion US dollars, covering short-term external debt 2.8 times over. Since the start of 2026, capital flows have seen net inflows of about 50 billion baht into Thai assets, mainly into the stock market as well as the bond market. Although conflict in the Middle East caused some capital outflows, the outflows were relatively low compared with other countries in the region. The Bank of Thailand is therefore not concerned about capital flows.

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