State-run banks have begun to raise loan interest rates for the first time in years, in line with the Bank of Thailand's policy rate hike on Wednesday.
Government Housing (GH) Bank increased all types of loan rates by 0.25%, effective on Thursday. This marks its first loan rate hike over the past two years and nine months.
Government Savings Bank also lifted all types of loan rates by 0.25%, effective from today, while the Bank for Agriculture and Agricultural Cooperatives raised its loan rate by between 0.125-0.25%, effective Feb 1.
GH Bank president Chatchai Sirilai, who chairs the Government Financial Institutions Association, said the association resolved on Wednesday state-run banks would have to increase their loan interest rates in line with the policy rate hike.
He insisted the bank rate hikes will not affect the loan repayment of most customers as this trend reflects the economic recovery.
Mr Chatchai said state banks are aware of customers' hardships, especially vulnerable groups, as their income has yet to return to normal levels after the Covid outbreaks, while they also have to cope with rising living costs.
State banks are ready to roll out measures to ease their burden, he said.
State-owned Export-Import Bank of Thailand (Exim Bank) announced on Thursday it will raise the prime loan rate to 6% from the current 5.75%, effective Feb 1.
Exim Bank president Rak Vorrakitpokatorn said this is the first rate hike in three years.
On Wednesday, the central bank's Monetary Policy Committee (MPC) voted unanimously to raise its policy rate by 0.25 percentage points from 1.25% to 1.5%, effective immediately.
It is the fourth time in a row the MPC increased the policy rate, starting from August last year, then in September, November and on Wednesday, each time 0.25 percentage points.
Since the rate hike last August, state banks have indicated they want to hold loan rates steady to avoid overburdening borrowers struggling with the impact of the pandemic.