Banks urged to consider economic conditions for interest hike
Commercial banks should not compete to increase interest
rates because it will eventually affect their costs, warns the Bank of
Speaking after a meeting between BOT’s officials and members of the Thai
Bankers’ Association (TBA), Khunying Jada Wattanasiritham, who is the
TBA’s chairwoman, said the central bank views interest rates have nearly
To adapt to the situation, the local commercial banks should ponder raising
the interest rates by taking into account the country’s economic
conditions, she said.
Kasikorn Bank’s president, Prasarn Trairattanaworakul, said the BOT wants
commercial banks to consider economic conditions and liquidity excess before
making a decision on interest rates.
The liquidity in the Thai banking system remains rather high now, he
conceded, adding that K Bank would give importance to economic and business
conditions for its deliberation on the interest rate hike.
Pinit Dejakup, Bank of Ayudhya president, said competition for deposits have
intensified among commercial banks, although liquidity in the banking system
He viewed the deposit rate hike as part of the bank’s efforts to increase
market share, while funding costs edge up.
He said the central bank does not want commercial banks to compete for
interest rate hikes because the country’s economy has experienced a
slowdown and people spend less when they are concerned about the economic
He conceded lending rates have now almost peaked, as have inflation rates.
However, much depends on whether local and global fuel prices will continue
Bangkok Bank’s president, Chartsiri Sophonpanich, said the bank’s
decision about an interest rate hike relies on market conditions. At
present, liquidity in the Thai banking system is rather high. Because of
this, the bank would not yet increase interest rates, he said. (TNA)
BOT continuing to intervene in baht movement
Bank of Thailand (BOT)’s governor, M.R. Pridiyathorn
Devakula, on Wednesday conceded that the central bank had intervened in the
baht movement to prevent it from becoming too strong and undermining the
country’s export competitiveness.
He revealed that the central bank had continued to supervise closely the
Thai currency to ensure it would not appreciate so sharply that
competitiveness in the export and business sector is affected.
He insisted that the central bank attempts to keep the Thai baht stable as
“The baht would not have become as stable as it is today unless we
supervised it closely. It moves rather steadily in a narrow range of
37.37-37.40 per US dollar…” he said.
The BOT chief said the Thai baht had appreciated because foreign capital
continues to flow into the capital and secondary markets in large amounts.
However, the BOT has closely monitored capital inflow and is aware of the
amount, but cannot reveal it for now.
Meanwhile, Finance Minister Thanong Bidaya said the baht had strengthened in
the same direction with other regional currencies.
He believes the central bank would be able to supervise the baht movement to
ensure it would not affect local entrepreneurs. (TNA)
SET index likely to reach 770 by year end
The Stock Exchange of Thailand index is likely to rally
to 770 points by the end of this year since interest rates and inflation
rates have already become saturated and political uncertainties have eased,
according to a leading stock analyst.
Kongkiart Opaswongkarn, chief executive officer of Asia Plus Securities
Public Company Limited, said that interest rates have begun to stabilize,
while inflation rates have dropped since June.
The political situation has improved, although there are doubts whether the
next general election will take place on October 15.
However, he believes the election would be held sometime this year.
Also, he said, foreign capital has continued to flow into the Thai stock
market because negative factors have eased and the price/earning ratio of
the bourse remains lower than other markets in the region.
Currently, the p/e ratio of the Thai bourse stands at around 10 times,
versus 25 times in the past.
However, the Thai stock market has still experienced risks from higher fuel
prices, which will affect productivity in the industrial sector.
Dr. Kongkiart said profits earned by listed companies would increase only
2.95 percent this year and further grow 6.7 percent next year since the
companies had adjusted themselves to the changing environment.
In the first 7 months of this year, he said, foreign investors made a
maximum investment in buying shares of Siam Commercial Bank with a total
value of 10 billion baht.
Millennium Steel came second, as Tata Co. of India and PTT Public Company
Limited spent 4.69 billion baht and 4.61 billion buying its shares.
As for shares dumped by foreign investors to the maximum, Advanced Info
Services was at the top with the sale turnover of almost 30 billion baht,
followed by Kasikorn Bank (15 billion), and Glow Energy (12 billion). (TNA)