Latest news with #VitaiRatanakorn
Bangkok Post
5 days ago
- Business
- Bangkok Post
Thai banks start cutting interest rates
Thailand's top banks have started cutting lending rates, following the central bank's move on Wednesday to reduce the benchmark policy rate to a two-year low of 1.50% to support a weakening economy hit by US tariffs. Bangkok Bank, the country's largest lender by assets, led the move with a 25-basis-point cut to lending rates, matching the central bank's reduction. State-controlled Krungthai Bank and the Government Savings Bank also announced similar reductions. The reductions 'aim to help all customer groups quickly adapt to significant challenges arising from shifts in global production structures and supply chains, as well as intensifying competition in the near future', said Payong Srivanich, president of Krungthai Bank, who also heads the Thai Bankers Association. The central bank's Monetary Policy Committee voted unanimously on Wednesday to cut the benchmark rate to 1.50%, bringing the total reductions to 100 basis points since October. Thursday's moves mark the first time in the current easing cycle that Thai lenders have fully passed on a central bank rate cut, after previously passing through an average of just 43% of the past three reductions, according to BoT estimates. The Bank of Thailand has signalled its monetary policy will remain accommodative as it sees a slowdown in economic growth lasting into early 2026 due to the impact of a 19% US tariff on Thai goods, subdued domestic consumption and a decline in tourist arrivals. Incoming governor Vitai Ratanakorn, who will succeed Sethaput Suthiwartnarueput on Oct 1, lauded Bangkok Bank's move to lower lending costs. In a Facebook post, Mr Vitai said cheaper funds will help 'take care' of the business sector and the people. The former president of the Government Savings Bank is scheduled to chair his first rate meeting on Oct 8. The Pheu Thai-led government has long been urging banks to cut borrowing costs to help small businesses and households struggling to repay debt that soared during the pandemic. On Wednesday, Finance Minister Pichai Chunhavajira said the latest rate cut would help improve liquidity and support the Thai baht. Lower rates will also discourage banks from parking money with the central bank, he told reporters. But the lending rate cuts could further squeeze profit margins at major Thai banks, as net interest margins — already under pressure from weak loan growth — face additional strain, according to Sarah Jane Mahmud, a senior analyst at Bloomberg Intelligence. Bangkok Bank could be the most impacted, she said.
Reuters
6 days ago
- Business
- Reuters
POLL Bank of Thailand set to cut rates on August 13 to support economy
BENGALURU, Aug 8 (Reuters) - The Bank of Thailand will lower its key interest rate on Wednesday to support a slowing economy as negative inflation persists and U.S. tariffs remain elevated, according to a Reuters poll of economists. Thailand's central bank left its policy rate unchanged in June but noted it was open to cutting as needed to counter the effects of an economic outlook that has turned highly uncertain in recent months. Central bank data showed, opens new tab private consumption contracted 0.3% and exports fell nearly 5.0% in June compared with May. This, along with negative inflation for the fourth consecutive month in July, will give policymakers room to cut on August 13. More than 80% of economists, 23 of 28 in the August 4-8 Reuters poll, predicted the BOT would cut its benchmark one-day repurchase rate (THCBIR=ECI), opens new tab by 25 basis points to 1.50% on Wednesday. The rest expected no change. "The economy is undeniably softening," Erica Tay, director of macro research at Maybank, said. "The case for an August rate cut has grown stronger. The latest inflation data showed core inflation has reversed its rising trend. Weakening core inflation upends the belief recent price weakness is mostly due to global oil prices and weather-related food supply shifts," she added. Among those who gave a longer-term outlook, 19 of 26 expected rates at 1.25% by the end of 2025, seven said 1.50% and one forecast 1.00%. Vitai Ratanakorn will take the helm at the BOT on October 1 and he has said rates can go down much further. With the U.S. placing tariffs on Thai goods of 19%, albeit less than the initially proposed 36%, economists expect a hit to growth. A separate Reuters poll taken in July forecast growth at 1.3% and 0.9% in the third and fourth quarters, respectively. "If you look at export growth, it's been in double digits until recently, mainly due to a rush by the U.S. to import goods from Thailand and other trading partners," Poon Panichpibool, a markets strategist at Krung Thai Bank, said. "This will come down, and we'll see much slower growth, which is going to reduce overall economic growth in the second half." (Other stories from the August Reuters global economic poll)
Business Times
6 days ago
- Business
- Business Times
Thailand's central bank cuts rates to lowest in two years to support growth
[BANGKOK] Thailand's central bank lowered its policy rate by a quarter point on Wednesday (Aug 13), its fourth cut in 10 months, to support a sluggish economy grappling with falling prices, the impact of US tariffs and a decline in foreign tourists. The monetary committee unanimously voted to cut the one-day repurchase rate by 25 basis points to 1.5 per cent, the lowest in more than two years. The economy was expected to expand this year and next, close to earlier assessments, but US trade policies would exacerbate structural problems and weaken competitiveness, with small businesses vulnerable, Bank of Thailand (BOT) said in a statement. 'Going forward, the economy is expected to slow down in the second half of the year due to US trade policies, both directly and indirectly, and a decline in short-haul tourist arrivals as a result of intensified regional competition,' it said, adding that private consumption and small businesses would be hit. 'The committee views that monetary policy should be accommodative going forward to support the economy,' it added. The central bank said it expects growth in South-east Asia's second-largest economy to slow in the second half of the year. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The baht reversed course to fall 0.1 per cent after the announcement, while Thai stocks were largely unchanged after rising 1.10 per cent in morning trading. The economy has struggled with weak consumption, high household debt, slowing tourism, trade uncertainty and US tariffs. The central bank has said the economy might have grown about 3 per cent annually in the second quarter of 2025 but would feel the impact of US tariffs and weakening consumption later this year. Wednesday's meeting was the last for governor Sethaput Suthiwartnarueput. New governor Vitai Ratanakorn will take over on Oct 1, and he has said rate cuts will support growth. The next policy review will be on Oct 8. In June, the BOT predicted 2025 economic growth of 2.3 per cent, with export growth of 4 per cent, after factoring in US tariff rates of 18 per cent. The economy expanded 2.5 per cent last year, lagging peers. Last month, the US reduced its tariff rate to 19 per cent on imported goods from Thailand, down from the initial 36 per cent level and more aligned with other countries in the region. There are still uncertainties relating to US tariffs on transshipments via Thailand from third countries. There are still uncertainties relating to US tariffs on transshipments via Thailand from third countries. The US was Thailand's biggest export market last year, accounting for 18.3 per cent of total shipments, with a value of US$55 billion. Consumer prices in July fell 0.7 per cent from a year earlier, down for a fourth consecutive month, and below the central bank's target range of 1 to 3 per cent for the fifth consecutive month. Headline inflation was subdued because of supply side factors including low food prices from favourable weather conditions and downward trends in energy prices, the BOT said. Price decline was not widespread as core inflation remained stable and near previous assessments, it said. In June, the central bank predicted headline inflation of 0.5 per cent this year, with the core rate seen at 1 per cent. Adding to the challenges is renewed political turmoil that could bring down Prime Minister Paetongtarn Shinawatra or the coalition government led by her Pheu Thai party. REUTERS
Business Times
6 days ago
- Business
- Business Times
Thailand's central bank cuts key rate by 25 bps, as expected
[BANGKOK] Thailand's central bank lowered its key interest rate by a quarter point on Wednesday (Aug 13), its fourth cut in 10 months as it looks to support a sluggish economy grappling with negative inflation and the impact of US tariffs. The Bank of Thailand's (BOT) monetary policy committee unanimously voted to reduce the one-day repurchase rate by 25 basis points to 1.50 per cent, the lowest in more than two years. The BOT had held the key rate at its June meeting following back-to-back cuts at reviews in February and April. It had also cut rates in October last year. Twenty-three of 28 economists in a Reuters poll had predicted a quarter-point reduction this week. The other five had expected no rate change. The central bank in a statement said the Thai economy was expected to expand this year and next close to earlier assessments, but US trade policies would exacerbate structural problems and weaken competitiveness, with small businesses vulnerable. 'The committee views that monetary policy should be accommodative going forward to support the economy,' the statement said. It expects growth in South-east Asia's second-largest economy to slow in the second half of the year, it said. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The baht reversed course to fall 0.1 per cent after the announcement, while Thai stocks were largely unchanged. The economy has struggled with weak consumption, high household debt, slowing tourism, trade uncertainty and US tariffs. The central bank has said the economy might have grown about 3 per cent annually in the second quarter of 2025 but would feel the impact of US tariffs and weakening consumption later this year. Wednesday's meeting was the last for governor Sethaput Suthiwartnarueput. New governor Vitai Ratanakorn will take over on Oct 1, and he has said rate cuts will support growth. The next policy review will be on Oct 8. In June, the BOT predicted 2025 economic growth of 2.3 per cent, with export growth of 4 per cent, after factoring in US tariff rates of 18 per cent. The economy expanded 2.5 per cent last year, lagging peers. Last month, the US reduced its tariff rate to 19 per cent on imported goods from Thailand, down from the initial 36 per cent level and more aligned with other countries in the region. There are still uncertainties relating to US tariffs on transshipments via Thailand from third countries. REUTERS
Bloomberg
10-08-2025
- Business
- Bloomberg
Thai King Endorses Vitai's Appointment as Bank of Thailand Chief
Thailand's King Maha Vajiralongkorn has endorsed the appointment of Vitai Ratanakorn as the nation's new central bank governor, more than two weeks after the cabinet picked the seasoned banker for the coveted role. The royal endorsement caps a monthslong selection process that has been overshadowed by concerns over government attempts to erode the autonomy of the Bank of Thailand. Vitai is set to take office from Oct. 1, according to a Royal Gazette notification issued Sunday. Incumbent Governor Sethaput Suthiwartnarueput is due to complete his five-year term on Sept. 30.
