Thailand’s 10-year government bond yield retreated to around 1.74% after reaching its highest level since June last year, as expectations of further monetary easing tempered concerns over upcoming fiscal spending ahead of the February election. Bank of Thailand Governor Vitai Ratanakorn recently said rates could be cut further, though he noted that monetary policy alone cannot resolve structural issues. These expectations have eased pressure on long-term yields, which had previously risen amid worries about heavy debt-funded stimulus that dampened demand for longer-dated securities. Investors are closely watching the government’s borrowing plans and upcoming debt auctions, as elevated yields could raise financing costs and limit fiscal space. Broader challenges include US tariffs, southern flooding, border tensions with Cambodia, and the baht’s recent strength weighing on exports and tourism.
