22 Oct 2024
Financial Institutions
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18 Oct 2023
17 Jul 2023
24 Jan 2023
First MPC meeting of the year January 25, 2023 MPC is expected to raise its policy rate in continuation from the previous year, by 0.25 percent to 1.50 percent ... Read more
28 Nov 2022
MPC meeting, Nov. 30, 2022 Policy likely to be raised by another 0.25% to 1.25% amid elevated inflationary pressures while economic recovery is on track ... Read more
21 Nov 2022
The Monetary Policy Committee (MPC) began raising its policy rates at the August and September 2022 meetings by 0.25 percent each, bringing the current policy rate to 1.00 percent. However, most large commercial banks did not hike their interest rates immediately and waited until October 2022, particularly deposit rates. A substantial increase has been seen in the launch of special deposit campaigns, chiefly by large and small commercial banks. Such campaigns have been introduced at an accelerating pace although they are intended to replenish deposits that have reached or are scheduled to reach maturity. ... Read more
27 Sep 2022
The Monetary Policy Committee (MPC) is expected to raise its policy rate by 0.25 percent to 1.00 percent at its upcoming meeting amid increased inflationary pressure and steady depreciation of the Baht. As previously signaled, the MPC may gradually speed up its policy rate hikes amid the fragile recovery of the Thai economy due to high debt levels of households and businesses. ... Read more
8 Aug 2022
It is expected that the Monetary Policy Committee (MPC) will raise its policy rate by 0.25 percent to 0.75 percent at the upcoming meeting. Amid increased inflationary pressure and steady recovery seen in the Thai economy, the MPC may gradually speed up its policy rate hikes ahead. ... Read more
27 Jul 2022
Impacts on the Thai banking system if banks defer interest rate increase ... Read more
16 Jul 2021
KResearch expects that the overall performance of Thai commercial banks in 2Q21 may see an increase in net profit over-year since the economy was hit by the first wave of COVID-19 in 2Q20. However, net profit in 2Q21 may dip to a mere THB 34.8 billion, against the THB38.7 billion that was registered in 1Q21. The drop can be attributed to the third wave of the pandemic, which has put renewed pressure on the economy as a whole, and consequently affected the income of commercial banks’ core businesses. Thus, banks must set aside higher loan loss provision.... Read more
11 Sep 2020
Preparedness for a new context in the financial world resulting from permanent cessation of the London Interbank Offer Rate (LIBOR) as an interest rate benchmark for financial transactions is an important mission of financial regulatory authorities in many countries. For Thailand, the Bank of Thailand (BOT) began promoting the Thai Overnight Repurchase Rate (THOR) in April 2020, representing an important milestone for the development of an overnight repurchase reference rate for borrowing in Thai Baht. The move is consistent with other countries, such as the US, which has developed the Secured Overnight Financing Rate (SOFR) to potentially be used as a US Dollar interest rate benchmark after LIBOR discontinuation.... Read more
22 Jun 2020
The Bank of Thailand (BOT) is forging ahead with its Phase II package of relief measures for small borrowers, which will emphasize relieving the financial burden of retail debtors by lowering the interest rate ceiling on credit cards and personal loans, as well as cutting the interest rate for refinancing debts into long-term loans. ... Read more
25 May 2020
The Monetary Policy Committee’s decision to trim its policy rate on May 20, 2020 has prompted commercial banks in Thailand to cut their interest rates once again a few days after that. Large commercial banks have concurrently announced to reduce their minimum loan rates (MLR), minimum retail rates (MRR) and minimum overdraft rates (MOR). The MLR reduction may help ease financial burden of entrepreneurs and consumers, including those applying for new loans and existing borrowers, who are able to repay debt. It is also consistent with financial institutions’ assistance measures for SMEs and retail customers. On the other hand, the MLR cut may pressure operating results of commercial banks, which are poised to cope with more challenges during 2Q20.... Read more
13 Nov 2019
As the Thai economy has shown signs of slowing, the Monetary Policy Committee (MPC) has decided to cut the policy rate for the second time this year to 1.25 percent per annum during its meeting on November 6, 2019. The central bank’s policy rate cut has been passed on to the interest rate reduction of commercial banks and other financial markets, leading to a low interest rate environment; this may trigger more the search-for-yield and riskier investment behavior than usual. KResearch has summed up signs of recent changes in investment patterns of investors, who hunt for higher investment returns. For example, debenture holdings by individual investors have risen to exceed 1 trillion Baht, while the number of mutual funds bearing higher risks than bond mutual funds has increased, and the savings amount deposited by savings cooperatives members continues to grow steadily. ... Read more
11 Nov 2019
When looking back at Thailand’s recent financial history, the search-for-yield behavior has always occurred regardless of how low or high the interest rate was at that given period. At any rate, during the slowing economy, which often comes with a low interest rate environment, people are more likely to adopt higher search-for-yield behavior than usual. One of the risky investment options that can adversely affect household finances is the “Ponzi” scheme. KResearch carried out a survey to gauge opinions from respondents in the Bangkok Metropolitan Region and provinces early November 2019 and found that a high proportion, 18.9 percent of total respondents, said that they are also interested in getting higher yields from other investment alternatives rather than investment in financial or capital markets or savings with financial institutions. Close attention should be paid to this group of investors because they may fall victim to a financial scam, lured by high return promises by unscrupulous brokers, regardless of whether they have made the investment decision voluntarily, or they thought they knew better or not. ... Read more
25 Oct 2019
Net loans of commercial banks in September 2019 expanded within a limited range, due to lackluster signs of overall economic activity. Moreover, some big commercial banks have exercised a cautious approach in approving loans to ensure the quality of loans. Meanwhile, the growth of small and medium sized enterprises (SMEs) business loans remained unchanged. Hence, an expansion of retail loans continued to play a prominent role in driving the overall loan expansion. ... Read more
19 Sep 2019
We at KResearch expect that the Bank of Thailand (BOT)’s Monetary Policy Committee (MPC) will likely maintain its policy rate at 1.50 percent during the sixth meeting of 2019 slated for September 25, 2019. The fact that 3Q19 economic indicators did not deteriorate from those seen in 2Q19 may give the MPC to assess the results of its policy rate cut at the previous meeting and the government economic stimuli for some time while pressure from the policy rate cuts by the Federal Reserve (Fed) and European Central Bank (ECB) on the BOT’s monetary policy stance may be limited. In addition, the BOT may have adequate tools to supervise the Baht, thus its decision towards the monetary policy direction will depend more on domestic factors rather than external factors.... Read more
15 Aug 2019
Within one week after the Bank of Thailand announced a policy rate cut, major Thai commercial banks have followed suit by cutting lending rates for their general customers. These banks have slashed their minimum overdraft rate (MOR) and minimum retail rate (MRR) by 12.5-25 basis points, but are keeping their savings and fixed deposit rates unchanged. KResearch analyzes the commercial banks’ move to pass on the central bank’s rate cut as follows... Read more
7 Aug 2019
Thailand’s Monetary Policy Committee (MPC) voted 5-2 to cut the benchmark rate for the first time in four years to 1.50 percent, from 1.75 percent, at its meeting, August 7, 2019. The MPC attributed its move to the weakening signs seen in the export sector and domestic demand, which have caused the Thai economy overall to grow at a slower pace than previously assessed, and the fact that headline inflation has remained at the lower end of its inflation target band. ... Read more
31 Jan 2019
Thai Baht has surged to THB31.23/USD or up 4.4 percent from the beginning of this year due mainly to a weaker US dollar. The movement of Thai Baht was in alignment with other currencies in the region. However, from the beginning of this year, the Thai currency hit a record high in nine months and became the second-best performer in the region after Indonesian Rupiah on the back of dollar downsize and the Federal Reserve’s hints that the interest-rate increases may be put on hold, resulting in a selloff of the greenback. ... Read more
KResearch expects the Bank of Thailand’s Monetary Policy Committee (MPC) to keep the policy rate unchanged at 1.75 percent during the upcoming meeting after it raised policy rate by 0.25 percentage point on December 19, 2018. Since the Thai GDP growth begins to show signs of slowdown, the MPC is likely to closely monitor the Thai economic development. Meanwhile, the recent rate increase has not significantly tightened financial conditions. In short, an accommodative monetary policy is still needed to shore up an expansion of the Thai economy.... Read more
4 Jan 2019
The uptrend of interest rate is ultimately evident by commercial banks’s decisions to raise their interest rates by starting from deposit rates. Their fixed-deposit rates for three, six, 12, 24 and 36 months are raised by 25 basis points. Hence, the fixed deposit rates of some major commercial banks moved up to a range of 1.18-1.85 percent annually. However, the commercial banks’s lending rates namely, minimum loan rate (MLR), minimum overdraft rate (MOR) and minimum retail rate (MRR), remain unchanged.... Read more
26 Dec 2018
The credit card business is likely to end the year with satisfactory growth, similar to other types of retail loans. Toward the year-end, competition of the credit card business is characterized by active campaigns and special promotions presented by commercial banks and non-bank operators to boost people’s spending during the festive season. ... Read more
20 Dec 2018
The Monetary Policy Committee (MPC) agrees to lift the policy rate by 0.25 percentage points from 1.50 to 1.75, the first rate increase in seven years. The lift is aimed at building policy space for the future. KResearch views that the policy rate increase is unlikely to have a significant impact on the Thai economy in 2019 as the liquidity in the Thai financial market remains high.... Read more
14 Dec 2018
KResearch views that there is a greater chance that this year’s last meeting of the Monetary Policy Committee (MPC) will resolve to increase the policy interest rate by 0.25 percent after some signals were clearly sent by the committee on the necessity to rebalance the monetary policy in order to enlarge the policy space in the future. While the Thai economy has begun to exhibit its fragility, its growth remains healthy in spite of slight disruptions in the third quarter of 2018. Against this backdrop, risks associated with fragile economic stability should be minimized and the policy space should be strengthened to cope with any future risk factors. As concerns the Thai Baht movements, Thailand’s interest rate increase is unlikely to shore up the Thai Baht value significantly because the Thai Baht movements are partially influenced by the USD and risk factors related to the global economy.... Read more
9 Nov 2018
The Bank of Thailand has announced the criteria to supervise housing loans by adjusting certain details in the Consultation Paper and postponed the effective date to April 1, next year (from the initial schedule of January 2019). The new requirement will not cover purchase and sale contracts or down payments made prior to October 15, 2018, to provide some time for all parties to adjust to the new measures. The exemption should ease the pressure on the property market and housing loans approved by financial institutions and cushion any effects on prospective buyers or those who have already made down payments.... Read more
26 Jun 2018
Around 4-5 financial technology start-ups have begun providing Peer-to-Peer Lending (P2P Lending) in Thailand by focusing on retail borrowers, especially SME entrepreneurs. The online lending platform should provide these borrowers with an increased access to finance with a cheaper interest rate because the costs associated with certain lending procedures will be lower when the operation is run by a digital system. Additionally, some platforms are designed to add another layer of price competition mechanism for investors through the online auction process. At the same time, the conditions to request for loans via online platform have also been eased in terms of both collateral and duration of business operations (compared with application for unsecured loans at financial institutions).... Read more
25 Jun 2018
Net loans for May increased to almost the same level as that in April by THB65.9 billion, or 0.59 percent MoM to THB11.20 trillion. When compared to the same period of 2017 and at the end of 2017, May net loans grew 4.99 percent YoY, or 1.27 percent YTD due to the low base of last year. The increase was seen almost across all banks in line with growth in business loans, in particular for large and small businesses. Retail loans were supported by auto hire purchase and home loans.... Read more
27 Apr 2018
KResearch expects the Federal Reserve (Fed) will resolve to maintain its policy interest rate at 1.50-1.75 percent in its third meeting of this year, in awaiting to assess further developments of the US economy and risks arising from trade disputes. Given the US attempts to minimize their trade deficits with many countries, their import duties may be raised again, especially for imports from China. If the two countries cannot reach a satisfactory conclusion on their trade relations, higher import duties imposed by the US will become in effect at the end of May 2018, which will most likely affect their economic developments and inflation directions. Therefore, the Fed will have to keep a close watch on that situation.... Read more
23 Mar 2018
We at KResearch expect that the Monetary Policy Committee (MPC) will likely keep its policy rate unchanged at 1.50 percent during the second meeting of 2018 scheduled for March 28 to ensure continuing growth in the Thai economy going forward amid a number of external risks, in particular a possible US-China trade war. The current inflation rate, which remains at the lower band of the Bank of Thailand’s inflation target, will also support the MPC to continue its accommodative monetary policy stance. ... Read more
4 Jan 2018
泰铢币值从新年开始就升值到接近32.20泰铢兑换1美元的水平，为近3年多来的最高值，与本区域其他币种的走向相一致，同时美元仍未获得明显的支持因素，虽然今年美联储将继续逐渐上调政策利率，不同于泰国政策利率在今年大部分时间内仍将维持1.5%的水平不变。 开泰研究中心认为，泰铢从2018年首几个工作日起就进入升值区间的局势，与资金流入的情况相符，主要因为获利于泰国经济基本面因素强健和看好经济趋向复苏，尤其是经常项目顺差，开泰研究中心预料2018年泰国的经常项目可能连续第三年实现逾400亿美元的顺差。... Read more