Banks will cut lending rates by 25 basis points for vulnerable groups for a period of six months, the Thai Bankers Association (TBA) said on Thursday, responding to a government request to help small businesses.
Prime Minister Srettha Thavisin has been repeatedly pressing the central bank to cut rates from a more than decade high of 2.50%, saying it is hurting businesses as the economy confronts stubbornly high household debt and China's slowdown. He this week said he had asked Thailand's four largest lenders to lower their rates.
The banks' rate cuts will be for both individual and SME customers and will help reduce their interest burden and support their recovery, the bankers' association said in a statement.
"Thailand member banks will expedite consideration of implementing the aforementioned principle and prepare the work system to answer the needs of vulnerable customers of each bank in the appropriate context as quickly as possible," it said.
The Bank of Thailand left its key interest rate unchanged for a third straight meeting on April 10, resisting government pressure to ease, saying the rate still supported the economy. The next rate review is on June 12.
The association said its move was in the same direction as the government in driving the economy and in line with the central bank's responsible lending. An official said it was up to each participating bank to decide when they would implement the measure.
On Wednesday, the central bank said the current policy rate was close to neutral, robust and could handle future risks to the economy, but the rate could be adjusted if needed.
In a message on his X account on Thursday, Mr Srettha thanked the TBA and its members for their gesture.
“I applaud the cutting of interest rates, which reflects that the TBA and its bank members have given more importance to taking care of customers, particularly vulnerable groups, and understood the expense burden of individuals and small operators who live from hand to mouth,” he qwrote.
“Even though the interest reduction is only for six months, it helps provide breathing room to bring profits to do something further. This measure helps both the business sector and people.
“As for other groups of people, the government will try to look for ways and measures to ease the expense burden as much as possible,” he added.