The February meeting minutes from the Bank of Thailand revealed that most members favored a rate cut to keep financial conditions supportive of recovery, ease debt burdens for SMEs and households, and anchor medium-term inflation expectations amid rising downside risks. Two members, however, argued the 1.25% policy rate remained appropriate, noting earlier cuts were still filtering through the economy. The committee also flagged further downside risks to headline inflation, which could return to the target range more slowly than previously expected due to falling energy prices and possible government measures, while demand-driven pressures remain limited as growth stays below potential. Although the economy expanded faster than anticipated, activity was uneven across sectors, constrained by structural challenges and intensifying competition. Credit continued to contract, SME loan quality deteriorated, and liquidity remained tight amid restricted access to financing and a stronger baht.
