Thailand Approves Debt Support Measures

BANGKOK (Reuters) – Thailand's cabinet on Wednesday approved debt support measures, including interest suspensions and reduced principal payments, to assist with household debt, according to Prime Minister Paetongtarn Shinawatra.

The measures are designed to benefit retail borrowers and smaller businesses, she announced in a press conference.

Finance Minister Pichai Chunhavajira stated that the cabinet also agreed to allow banks to pay a reduced annual contribution of 0.23% of their deposits to the Financial Institutions Development Fund (FIDF) for three years.

The reduced FIDF contributions are intended to help banks support debtors, officials explained. Currently, banks are required to pay an annual regular contribution rate of 0.46% of their deposits to the FIDF, which is the central bank's rescue arm that provides financial assistance to troubled institutions.

The Bank of Thailand is set to hold a briefing on these debt relief measures later today.

The government indicated that the measures will assist borrowers with debts that are up to a year overdue, covering housing loans of up to 5 million baht ($148,060), car loans not exceeding 800,000 baht, and loans for smaller firms of up to 5 million baht.

The government is attempting to alleviate the debt burdens on households, viewing this debt as a limitation on consumption and economic growth.

As of June, Thailand had a household debt-to-GDP ratio of 89.6%, totaling 16.3 trillion baht ($482 billion), one of the highest levels in Asia.

($1 = 33.82 baht)
($1 = 33.7700 baht)