Thailand: BOT on hold with a dovish-leaning tone: A weaker THB is unlikely to alter the policy outlook

Research evidence excerpt

Thailand: BOT on hold with a dovish-leaning tone: A weaker THB is unlikely to alter the policy outlook

Charnon Boonnuch Asia Pacific Economic Research J P M O R G A N(65) 6807 5086 24 June 2026

charnon.boonnuch@jpmorgan.com

Cautious tone around inflation

The BOT’s inflation projections were revised down only slightly from April. While we had

expected the BOT to adopt a conservative approach, the revision was more measured than

what we had anticipated, as the BOT acknowledged the significant uncertainty around

geopolitical risks. This results in the BOT’s new oil price assumption, which implies oil

prices to stay well above current market prices in 2H26.

Furthermore, the BOT highlighted the upside risks to the inflation outlook from the pipeline

pressures and El Nino. However, we do not view the BOT’s inflation view as a hawkish

signal, as the BOT overall maintained that inflation is still likely to be on a downward

trajectory in 2027, which we believe is increasingly relevant to the policy outlook in 2H26

and beyond.

Limited concerns about weaker THB

Adding to the dovish-leaning tone, the BOT sounded comfortable with the recent THB

depreciation. At the press briefing, Assistant Governor Don Nakornthab indicated that a

weaker THB could be “favourable” to the export sector.1 We believe this signal is likely to

be interpreted by the market as particularly dovish, amid the hiking cycle elsewhere.

The communication is nonetheless consistent with our long-held view that the FX

implications for the policy rate outlook are likely limited. As such, a hike by the Fed, if any,

is unlikely to result in a response by the BOT, unless an adjustment is warranted by domestic

considerations in the future.

Accompanying its FX assessment, the BOT also lowered its 2026-27 current account