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Central bank economic growth estimate unchanged

Thai, Vietnamese bourses to boost cooperation

Thailand’s central bank requires financial institutions to justify loan rejections

Central bank economic growth estimate unchanged

Bank of Thailand (BoT) Assistant Governor Paiboon Kittisrikangwan on Friday announced that the central bank will maintain its economic growth estimate for this year at 3.3-5.3 percent against a contraction of 2.7 percent in 2009.
He said that Thailand’s gross domestic product (GDP) grew 4 percent in the fourth quarter of last year and tended to expand further upon global economic recovery, improved private consumption and investment and increased exports.
Thailand’s economic recovery looks sustainable, he said, given the higher consumer confidence and business confidence indexes.
The BoT projected GDP in 2011 will expand 2.8-4.8 percent, boosted by the expected increase in private consumption and investment, and higher exports and imports.
However, the Thai economy would continue to experience four risk factors including the slower than expected global economic growth, a continued slowdown in fiscal driving force, concerns and impacts from the investment project suspension in the Maptaphut Industrial Estate, and persistent political conflicts.
Paiboon said the inflation rate would remain low because the government decided to extend measures to relieve living costs to the first quarter of this year.
It is expected the general inflation rate would stay at 3-5 percent and the core inflation rate at 1.3-2.3 percent.
Monetary policy implementation will return to normal this year if the private sector conducts business steadily and the economy continues expanding.
Still, higher oil and commodity prices must be monitored as it could fuel rising inflation. He said the BoT will consider again whether it is appropriate to raise the policy interest rate in the third and fourth quarters.
“The interest rate adopted by the bank to boost the economic recovery is considered especially low. If the economy recovers steadily, the interest rate must return to normal because the bank must retain economic stability in the long run,” said Paiboon.
Regarding the stronger baht, he allowed the central bank is unable to peg the currency because it had adopted the managed float regime, but if the baht fluctuated too heavily, the bank would attempt to supervise it to prevent it from affecting the economic recovery. (TNA)
 


Thai, Vietnamese bourses to boost cooperation

The Stock Exchange of Thailand (SET) and the Hanoi Stock Exchange (HNX) last Friday signed an agreement to exchange information and experience in regulating the stock market.
The five-year Memorandum of Understanding (MoU) will also support business opportunities for investors through network mechanism and business matching activities that will increase the business value of listed companies.
Vietnamese companies and Thai-Vietnamese joint ventures are encouraged to apply for dual listing on the stock exchanges of the two countries once the laws and relevant regulations permit it.
“To a greater extent, this agreement will allow us to tighten the bonding between financial markets in Thailand and Vietnam, making contributions to the integrity of ASEAN economic community as highlighted in the spirit of ASEAN alliance,” Tran Van Dzung, president of the Hanoi exchange said in a statement.
SET president Patareeya Benjapolchai said the stronger cooperation and relationships will further provide both business and investment opportunities not only for the exchanges but also for all market participants.
According to a SET recent survey, 43 percent of the listed companies responding to the survey indicated interest in investing in Vietnam, and some listed companies are exploring investment and business expansion opportunities in Vietnam. (TNA)


Thailand’s central bank requires financial institutions to justify loan rejections

Bank of Thailand (BoT) Assistant Governor Pimpa Thawarayut on Thursday revealed that the central bank has issued letters of instruction to managers of all financial institutions, requiring them to make clear explanations in case they disapprove or reject loan applications.
Reasonable explanations must be given, she said, noting that in the past the central bank and the center tasked with liaising on addressing loan granting problems had received complaints from intending borrowers that they received unclear explanations from financial institutions over why they were refused loans.
A Bank of Thailand survey also found guidelines for approving loans vary widely among financial institutions, resulting in public confusion. More importantly, the failure to clearly explain loan rejections might lead to a negative image of such institutions as a whole.
Because of this, the BoT established guidelines to ensure uniform standards and practices to boost public understanding. Also, it could help provide unsuccessful loan applicants with useful information on how to improve their financial position.
“We have sought cooperation from financial institutions to explain to intending borrowers why they rejected their loan applications in writing. To comply with official rules, financial institutions must give rejected loan applicants easy access to the reasons and written clarification over their failure to receive a loan approval,” she said. (TNA)