Thailand’s Central Bank and Retail Borrowers

BANGKOK (Reuters) – Thailand’s central bank should assist retail borrowers after it held its benchmark interest rate steady this week, according to the caretaker finance minister on Thursday.

Retail lending interest rates are too high and need to be addressed, Pichai Chunhavajira told reporters. Minimum retail lending rates at banks are as high as 8%.

The central bank left its key interest rate unchanged at 2.50% for a fifth straight meeting on Wednesday, citing a neutral stance as it waits for potential changes in economic stimulus policies from the new prime minister.

Paetongtarn Shinawatra, the 37-year-old daughter of billionaire political figure Thaksin Shinawatra, was elected premier by parliament last week after the court dismissed her ally Srettha Thavisin two days earlier.

The central bank’s decision not to change the key rate reflects its assessment of the overall economy, Pichai stated.

“But what needs to be considered more is the interest rates that the public has to pay. How can we make them less different and more appropriate?” he said.

Pichai pointed out that large companies receive much lower lending rates while small firms pay higher rates. He has previously emphasized that access to credit for smaller businesses is more crucial than the levels of policy rates.

The central bank’s next rate review is scheduled for Oct. 16.