The meeting of the central bank’s monetary policy committee (MPC) on May 29 is likely to maintain the repurchase rate at 2.75%, Pakorn Pattanapat, executive vice president of Kasikornbank, said on Wednesday.
This is because the economy is experiencing good growth at 5%, inflation is below 3% and the baht is now more stable, he said.
Mr Pakorn said he expected the MPC would maintain the RP policy rate at 2.75% until the end of the year, since it is currently at a suitable level for businesses and does not place any great burden on them.
Moreover, he said the central bank is concerned about overheated lending in the property sector.
If the RP rate were cut heavily, people would turn to investing more in the property sector, which could lead to a bubble in the market, although there is no sign of such a situation arising at the moment, he said.
Outstanding housing loans now account for 20% of total lending, which is relatively low compared to other countries in the Asean region, he said. In Singapore, Hong Kong and Malaysia housing loans account for about 30% of total lending.
Lending to property development companies is slowing down, he added. Many firms have turned to raising funds through sales of their own bonds and debentures, or by setting up property development funds, he said.