Thailand’s Monetary Policy Committee (MPC) voted unanimously to cut the policy interest rate by 0.25 percentage points, bringing the rate down from 1.50% to 1.25%, in line with market expectations.
The decision comes amid signs of economic weakness, with subdued growth and negative inflation persisting for eight consecutive months, coupled with a contraction in overall credit extension.
Kasikorn Securities (KS) stated that there is a possibility the committee may further lower the policy rate by another 0.25 percentage points next year, potentially bringing the rate to 1.00% by the end of 2026. The latest rate cut is expected to support short-term investment sentiment in the broader market.
The brokerage firm projects the SET Index will fluctuate between 1,250 and 1,280 points through the end of 2025, citing ongoing negative pressures but also support from year-end inflows into tax-saving funds. Financials, real estate, and energy—particularly companies with high debt levels—are expected to benefit from lower funding costs.
Meanwhile, banking and ICT sectors could attract flows seeking higher dividends in a low-rate environment. Recommended stocks include SAWAD, TIDLOR, AP, KKP, KTB, SCB, GPSC, and BGRIM.
Despite the rate cut, the Thai baht may continue to appreciate. Support levels are seen at THB 31.4 and THB 31.1 per dollar, as the U.S. dollar remains weak after continued soft employment data, which may prompt the Federal Reserve to cut its funds rate more than once next year.
The analyst pointed out that the key turning point for the baht could come at the end of Thailand’s current rate-cutting cycle, as speculative flows and short-term bond investments may decrease.
