Each country's central bank sets its own interest rates and looks after its own currency. When the policies of two central banks diverge, that currency pair often moves sharply.
Major Central Banks
| Central Bank | Country/Currency | Rate the Market Watches | Decision-Maker |
|---|---|---|---|
| Federal Reserve (Fed) | United States / USD | Fed Funds Rate | FOMC. Read What Is the Fed |
| European Central Bank (ECB) | Eurozone / EUR | Deposit Facility Rate | Governing Council |
| Bank of Japan (BOJ) | Japan / JPY | Short-term interest rate | Policy Board |
| Bank of England (BOE) | United Kingdom / GBP | Bank Rate | 9-member MPC |
| People's Bank of China (PBOC) | China / CNY | Loan Prime Rate (LPR) | Under the Chinese government |
| Bank of Thailand (BOT) | Thailand / THB | Policy interest rate | 7-member MPC |
Highlights of Each Central Bank
ECB
It oversees the monetary policy of the countries that use the euro. It has to strike a balance between economies of differing strength, such as Germany and Italy.
BOJ
Japan had negative interest rates for many years until 2024. The wide interest rate gap between Japan and the US led to the Carry Trade (borrowing yen at low interest rates to invest in higher-yielding assets). When the BOJ shifts its policy, markets around the world can be shaken.
BOE
The UK is facing inflation that is falling slowly. BOE decisions directly affect the British pound (GBP).
PBOC
China's policy affects commodity prices such as copper and oil, as well as trading partners like Thailand.
The BOT and the MPC
The Monetary Policy Committee (MPC) meets 6 times a year and sets a headline inflation target of 1–3%. At meeting 4/2569 (26 Aug 2569), the MPC voted unanimously to hold the policy interest rate at 1.00% per year.
Why Thai Investors Should Pay Attention
- The Thailand–US interest rate differential affects capital flows and the baht exchange rate.
- Thai interest rates affect bank stocks, property stocks and Thai bond yields.
- The baht exchange rate affects the returns of Thais investing abroad. If the baht strengthens, profits shrink when converted back into baht.
Each country's interest rates can change at every meeting. Check the latest figures on the website of the central bank concerned.
For education only, not investment advice. Figures change over time, so check official sources before making decisions.