Thai PM Calls Major Banks to Discuss Rate Cuts

Thailand Prime Minister Srettha Thavisin stated that on Tuesday morning, he had invited Bangkok Bank Public Company Limited (SET: BBL), Krung Thai Bank Public Company Limited (SET: KTB), SCB X Public Company Limited (SET: SCB), and Kasikornbank Public Company Limited (SET: KBANK) to discuss the possibility for the banks to reduce interest rates for vulnerable groups, including SMEs and small entrepreneurs, following the strong 1Q24 earnings reported by the four banks.

The Thai PM noted that the government perceived grievances from the people in the country who encountered problems with interest rates. The call for discussion was not for business competition or any kind of rivalry among financial institutes but for Thai people to support each other and unite as one. Thus, he urged the banks to take the matter into consideration.

Earlier this month, the Bank of Thailand decided to maintain its rates at 2.50%, despite calls from the Thai PM to cut policy rates to lower the burden for Thais that suffer from high interest rates.

The Bank of Thailand wrote in a statement that the committee deems that the current policy interest rate is conducive to safeguarding macro-financial stability, and that the effectiveness of monetary policy on resolving structural impediments is limited.

Most members thus voted to maintain the policy rate at this meeting, but will monitor uncertainties of economic factors going forward. Two members voted to cut the policy rate by 0.25 percentage point to reflect Thailand’s lower potential growth as a result of structural challenges and to partly alleviate debt-servicing burden of borrowers.