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Thai Banks Lower Rates After Central Bank Policy Cut

Thai Banks Lower Rates After Central Bank Policy Cut

In a move to support economic growth amid inflationary concerns and high household debt, the Bank of Thailand (BOT) announced a 0.25% reduction in its policy interest rate, bringing it down to 2.25%. This decision, made by the BOT’s Monetary Policy Committee (MPC) in a 5-2 vote, marks a shift from its previous rate of 2.5%, which was the highest level in over a decade. The central bank’s cut was prompted by a need to stimulate economic activity and provide financial relief to businesses and households struggling with debt levels that currently sit at approximately 91% of GDP​

Following this policy shift, major commercial banks, including Kasikornbank, Siam Commercial Bank, and Krungsri, will adjust their rates effective November 1. Kasikornbank and Siam Commercial Bank are set to implement a 0.25% decrease, while Krungsri detailed its rate cuts across several categories:

  • Minimum Loan Rate (MLR): Decreased from 7.280% to 7.155%, aiding prime corporate borrowers.
  • Minimum Overdraft Rate (MOR): Lowered from 7.575% to 7.325% for corporate overdrafts.
  • Minimum Retail Rate (MRR): Adjusted from 7.400% to 7.275%, benefiting retail clients​

BOT Governor Sethaput Suthiwartnarueput emphasized that, while the rate reduction could help alleviate some financial pressure, structural reforms remain critical for ensuring long-term economic stability. The rate adjustments by these banks reflect increased competition in the lending sector and are expected to ease borrowing costs, potentially boosting consumer spending and business investments​.

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