BOT expects banknote demand to rise 3% this Songkran, but banks trim cash reserves
April 05, 2014 00:00 By The Nation
The Bank of Thailand expects demand for banknotes to increase during Songkran, while the seven major banks have total cash reserves of Bt180 billion for the festival.
BOT spokeswoman Dr Roong Mallikamas said the central bank expected demand for banknotes to increase 3 per cent this Songkran compared with last year and as result it had increased the reserve for bills to Bt470 billion by the end of March.
That is equal to a nominal demand of three to seven months.
"The demand for banknotes is higher than normal during the Songkran period and the Bank of Thailand has reserved various kinds of notes to meet this need," Roong said.
This year the central bank expects commercial banks to disburse a marginally greater number of notes this Songkran than last year, she said.
Major banks have lowered their cash reserves for Songkran compared with last year in line with expected lower spending.
Bangkok Bank, the country’s largest bank, has maintained a cash reserve of Bt45 billion for branches and automated teller machines nationwide.
Krungthai Bank has set aside a cash reserve at ATMs and branches of Bt45.7 billion, down from Bt57 billion the previous year. A KTB executive said that the bank expected consumers would have less spending power this year. Last Songkran, KTB had the biggest cash reserve.
Kasikornbank has lowered its cash reserve from last year’s Bt28.2 billion to Bt25.6 billion.
Siam Commercial Bank is the only major bank that has increased its cash reserve, jumping from Bt34.5 billion to Bt35 billion.
CIMB Thai Bank will have a cash reserve of Bt2.3 billion, Bt1.5 billion of which will be for ATMs and Bt800 million for its branches.
TMB bank will have a cash reserve of Bt12 billion, up from Bt8 billion last year.
Bank of Ayudhya’s cash reserve will be Bt16.57 billion, an increase of Bt1.59 billion from last year.
Kasikorn Research Centre expects Songkran spending to drop by 13.7 per cent to Bt22 billion – the first decrease in five years. High living costs and the political uncertainty will be the key factors putting pressure on the spending mood of Bangkokians during the festival.