THB: Rising Commodity Prices Threaten Baht Stability - Commerzbank

Commerzbank analysts note that the Bank of Thailand is expected to keep its policy rate at 1.0%, viewing this level as sufficiently accommodative, with no need for adjustment to the current monetary policy stance. USD/THB has been consolidating within the 32.90–33.30 range, lacking clear directional momentum.

**Commodity Prices and Foreign Flows Pose Key Pressures**

Rising global commodity prices are exerting downward pressure on the baht. As a commodity-importing country, Thailand faces higher import costs when raw material prices such as energy rise, weighing on its terms of trade. Meanwhile, foreign outflows further undermine demand for the baht. Commerzbank analyst Charlie Lay stated that USD/THB edged higher, aligning with market expectations that Thai inflation data supports a steady policy stance.

**Mild Inflation Gives Central Bank Room to Hold**

Thailand's inflation data remains mild, with core CPI figures supporting the central bank's maintenance of current policy. Market reports indicate that Thailand's overall economic conditions are broadly stable, despite export growth on a year-on-year basis slowing to 9.8% from the previous 23.2%, cumulative exports over the first five months of 2026 still rose 16.9%, and the trade deficit has narrowed. Against this backdrop, the Bank of Thailand sees little urgency to adjust rates.

**Range-Bound Pattern May Persist in the Near Term**

Commerzbank expects the baht to remain range-bound. With mild inflation, a central bank on hold, and the twin pressures of commodity prices and foreign flows, USD/THB is likely to continue fluctuating within its existing range in the near term, with the breakout direction still dependent on commodity price trends and cross-border capital flow dynamics.