Foreign investors return
In the first half of 2025, foreign investors recorded a net purchase of 32.33 billion baht in Thai bonds. While January saw a net sell-off of 11.99 billion baht, investors returned in force between February and April, accumulating net purchases of 79.24 billion baht. However, this was followed by another wave of net selling in May and June, totalling 34.92 billion baht.
By the end of Q2, foreign investors held 900 billion baht in Thai bonds, accounting for 5.2% of the market’s total outstanding value.
Government bond yields decline
Government bond yields declined across the curve during H1 2025, in line with the two policy rate cuts by the Bank of Thailand in February and April. As of the end of Q2:
The 2-year and 5-year bond yields both fell to 1.40%
The 10-year bond yield stood at 1.60%
These yields had dropped by 62–70 basis points compared to the end of 2024.
Corporate bond yields also down
Corporate bond yields followed the same downward trajectory. Yields on 5-year bonds issued by firms rated:
AAA fell to 1.88%
AA to 2.29%
A to 2.75%
BBB+ to 3.91%
This represents a drop of 52–93 basis points from end-2024.
Further rate cut expected in Q4
Most market participants anticipate that the Monetary Policy Committee (MPC) will lower the policy rate once more in Q4, by 25 basis points to 1.50% from the current 1.75%.
Bond yield forecasts for the remainder of 2025 suggest a further decline of 5–10 basis points for the 5-year and 10-year tenors, driven by expectations regarding domestic interest rate policy, the Thai and global economic outlook, and monetary trends in major economies.