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UOB economists Enrico Tanuwidjaja and Sathit Talaengsatya predict the Bank of Thailand (BoT) will maintain its 1-Day Repo Rate at 1.00% through at least the first quarter of 2027, despite rising headline inflation driven by the oil price shock. The economists attribute this decision to the central bank’s focus on stabilizing the economy amid external pressures from global energy markets. While inflation remains elevated due to higher oil prices, the BoT’s decision reflects a balance between controlling inflation and avoiding aggressive rate hikes that could stifle economic recovery. This policy stance is significant for global markets, particularly for emerging economies like Thailand, where currency stability and inflation management are critical. The decision to hold rates may influence investor sentiment toward the Thai baht, as well as regional capital flows. Traders should monitor how the BoT navigates the tension between inflationary pressures and growth support in the coming months. For Gulf and MENA investors, the oil shock underscores the interconnectedness of global energy markets and central bank policies. Rising oil prices could indirectly impact inflation in the Gulf region, especially for energy-importing economies. Investors should watch for further BoT policy signals and global oil price trends to assess their implications for regional markets.
