State-run banks freeze interest rates
State-owned banks have promised to keep interest rates at the current level until September for low-income earners, allowing millions of people to benefit from the Finance Ministry's relief package.
Naris Chaiyasoot, director general of the Fiscal Policy Office, yesterday announced the package aimed at helping borrowers hit by the soaring oil prices and rising interest rates. The Government Housing Bank will maintain its mortgage rates of 5.5 per cent in the first year, 6 in the second and 6.5 in the third, said Khan Prachuabmoh, president of the bank. The three-year fixed rate is offered to those eligible to buy homes in government projects. About 21,000 borrowers are expected to benefit from this, with loans totalling about Bt8.3 billion, Khan said. Most of the bank's customers, however, will be charged market rates. Somphan Eaurungroj, senior executive vice- president of the Export-Import Bank of Thailand, said the bank would help small-scale exporters by lowering rates, or by lowering the prime rate by 0.5 per cent annually. Exporters whose shipments did not exceed Bt50 million last year can borrow up to Bt5 million from the bank and those who shipped more than Bt50 million worth of goods abroad can borrow up to Bt10 million. Somphan said the move would reduce the bank's operating profit by Bt20-30 million a year. Woravit Chailimpamontri, senior executive vice president at Government Savings Bank, said the bank would not raise its rates for low-income borrowers in the People's Bank scheme, which would help 480,000 people. The rate is 1 per cent a month. Bank for Agriculture and Agricultural Cooperatives vice-president Phairoj Janthai promised not to raise rates for at least one quarter, saying 15 million farmers would benefit. However, if the Bank of Thailand raised its key policy rate again, his bank would revise its rates next month. The central bank is expected to raise its 14-day repurchase rate by 25 basis points to 5 per cent next month. Naris said maintaining rates at their current level was a temporary measure. "Given our limited resources, we cannot enforce too many fiscal policies that are at odds with market forces." Although the economy is slowing, demand for loans is unlikely to drop, executives at state banks said.
Wichit Chaitrong The Nation
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