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4 Mar 2025

Financial Institutions

Banks are gradually cutting their lending rates; benefits to debtors are pending (Current Issue No.3565)

คะแนนเฉลี่ย
  • After the Monetary Policy Committee (MPC) cut its policy rate by 0.25 percent to 2.00 percent on February 26, 2025, interest rates in the money and bond markets immediately decreased in line with the transmission mechanism of monetary policies.
  • The key focus after this MPC meeting is the announcement of lending rate cuts by commercial banks within one day following the MPC’s decision. MLR (Minimum Loan Rate), MRR (Minimum Retail Rate), and MOR (Minimum Overdraft Rate) were cut by 0.10-0.25 percent, effective from the beginning of March 2025.
  • KResearch expects the rate cut to affect new loan agreements. Still, it may help reduce the interest burden for debtors in the current portfolio when their debt enters the interest repricing period based on the reference rate. Retail and business loans likely to benefit from the rate cut by the middle of this year may account for 56.4 percent of total loans in the Thai banking system. Meanwhile, two key factors to watch for the rest of the year are: 1) whether domestic interest rates will decrease further; and 2) the growth momentum of loans and the overall economy.

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Financial Institutions