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.