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Thai baht holds steady as inflation supports Bank of Thailand pause

USD/THB moved up slightly after June inflation cooled to 2.4% year over year and stayed within the BoT’s 1% to 3% target band.

Reported · Written up by our desk · EM Currencies

USD/THB edged higher as fresh Thai inflation data reinforced expectations that the Bank of Thailand would keep its policy rate unchanged, according to FXStreet analysis citing Commerzbank’s Charlie Lay.

Lay said June headline inflation eased for a second consecutive month to 2.4% year over year, down from 2.8% in May, and remained within the BoT’s 1% to 3% target range, where year to date inflation averaged 1.1%.

The analysis noted core inflation rose slightly to 1.2% year over year from 0.9%, while energy prices slowed to 13.7% year over year from 18.1%, with food prices steady at 1%.

Commerzbank linked the currency move to expectations the BoT will keep rates on hold at 1% through at least the next meeting on 26 August, with risks tied to potential rebounds in energy costs or higher food prices related to El Niño.

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