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State-Run Banks Announce Higher Interest Rates For Loans
(CTN NEWS) – BANGKOK – In response to the Bank of Thailand’s policy rate increase on Wednesday, state-run banks have started raising lending interest rates for the first time in years.
The Bank for Agriculture and Agricultural Cooperatives upped its lending rate by 0.125 to 0.25 percent on February 1, while Government Housing (GH) Bank boosted all loan rates by 0.25% today.
The Government Financial Institutions Association, which GH Bank president Chatchai Sirilai chairs, decided on Wednesday that state-run banks would have to raise their loan interest rates to reflect the increase in the policy rate.
He stressed that while this pattern indicates economic recovery, bank rate increases will not impair the majority of consumers’ ability to repay their loans.
Visitors at the GH Bank booth at a previous Money Expo. The bank increased all types of loan rates by 0.25%, effective on Thursday. (Bangkok Post file photo).
According to Mr. Chatchai, state banks are aware of the difficulties their clients face, particularly those of vulnerable groups whose income has not yet returned to pre-Covid levels while they still have to contend with increased living expenses.
According to him, state banks are prepared to implement measures to lessen their load.
Exim Bank, a state-owned institution in Thailand, stated on Thursday that starting on February 1 the prime loan rate would increase to 6% from the existing 5.75%.
This is the first rate increase in three years, according to Exim Bank President Rak Vorrakitpokatorn.
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The Monetary Policy Committee (MPC) of the central bank unanimously decided to increase the policy rate by 0.25 percentage points, from 1.25% to 1.5%, with immediate effect on Wednesday.
The MPC has lifted the policy rate four times in a row, by 0.25 percentage points each time, beginning in August of last year and continuing through September, November, and today.
Since the rate increase in August of last year, state banks have said they aim to maintain stable loan rates to prevent burdening borrowers already dealing with the effects of the pandemic.
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