The Bank of Thailand reiterated that the Monetary Policy Committee (MPC) does not need to hold a special meeting, even though Indonesia raised interest rates to stem the sharp decline of the rupiah.

The Bank of Thailand revealed that the rupiah has depreciated by more than 8%, putting pressure on Indonesia to raise interest rates. Meanwhile, the baht remains stable, and a special Monetary Policy Committee meeting is not yet necessary.

June 10, 2569 – Ms. Chayawadee Chaiyanan, Assistant Governor, Corporate Relations and Spokesperson, Bank of Thailand. It was explained that Indonesia's decision to raise interest rates at the recent special meeting was partly to alleviate pressure that was causing the Indonesian rupiah to depreciate rapidly. While the Thai baht weakened somewhat overall, its movements remained stable.

Since the conflict between the US and Iran, the Indonesian rupiah has continuously depreciated by more than 8%, reaching its weakest level on record. This is due to investors continuously selling Indonesian assets, including stocks and bonds (totaling approximately 3.9 billion USD), amid concerns about domestic stability following the conflict, particularly regarding fiscal policy, and worries about the Indonesian stock market being downgraded from an emerging market to a frontier market.

The Thai baht has depreciated by approximately 5.4% since the conflict began. Meanwhile, foreign investor capital flows reflect net selling of Thai assets of only 1.3 billion USD, and have recently started flowing back into long-term bonds and the stock market.

"Given the strong Thai baht exchange rate and external stability in Thailand, the Monetary Policy Committee (MPC) does not need to convene a special meeting like in the case of Indonesia."

Read related news

• Indonesia swallows the bitter pill, raises interest rates and oil prices to regain investor confidence.
• The Indonesian central bank raised its interest rate by 0.25% unexpectedly to curb the weakening rupiah.
• Dr. Don affirms Thailand is far from a currency crisis, pointing to a different context from Indonesia.