Government banks have Begun to Raise Loan Interest Rates for the First Time in Years

(CTN News) – In response to the Bank of Thailand’s policy rate increase on Wednesday, state-run banks have started raising lending Loan interest rates for the first time in years.

All loan rates were raised by 0.25% as of Thursday by Government Housing (GH) Bank. Over the last two years and nine months, this is the first rate increase for loans.

In addition, Government Savings Bank increased its lending rates by 0.25% today, while the Bank for Agriculture and Agricultural Cooperatives increased its loan rate by 0.125 to 0.25% as of February 1.

The Government Financial Institutions Association, chaired by Chatchai Sirilai of the GH Bank, decided on Wednesday that state-run banks would have to raise their loan interest rates.

He stressed that while this pattern indicates the economic recovery, bank rate increases would not impair most consumers’ ability to repay their loans.

 

According to Mr. Chatchai, state banks are aware of the difficulties their clients face, particularly those of disadvantaged 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 steps to lessen their load.

Exim Bank, a state-owned institution in Thailand, stated on Thursday that starting on February 1, the prime lending rate will increase to 6% from the existing 5.75%.

This is the first rate increase in three years, according to Exim Bank President Rak Vorrakitpokatorn.

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 last year, state banks have said they aim to maintain stable loan rates to prevent burdening borrowers already dealing with the epidemic’s effects.

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