Finance Minister discusses with BOT Governor to take care of household debt, reduce interest rates

Finance Minister discusses with BOT Governor to jointly solve household debt problems for vulnerable groups, hoping that if BOT lowers interest rates, it will benefit retail and SMEs, allowing them to access sources of capital. Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, said that the discussion with the Governor of the Bank of Thailand, the Finance Ministry confirmed the policy to request a lower interest rate. It is accepted that it is the duty of the MPC, which will meet on Wednesday, October 16. Therefore, they exchanged opinions and provided information that the Fed and the European Central Bank have lowered interest rates, including China's large-scale economic stimulus measures, causing capital to flow into Thailand, resulting in the baht continuing to strengthen. Although it has weakened somewhat today, it is expected that the MPC will consider these factors because if the interest rate is lowered, it will have a positive effect on new borrowers. Admittedly, even if inter est rates were cut, the baht would not weaken much and would not stimulate exports in terms of volume. Normally, exports tend to improve towards the end of the year. In addition, the large number of foreign tourists in the fourth quarter is a factor that helps support the economy at the end of the year. However, the most important thing is to take care of liquidity so that small and medium-sized enterprises (SMEs) can access sources of capital. This is considered the most important thing. Also discussed the solution to the household debt problem, which is still at a high level after the state bank has helped some of them. There are still debtors in the Non-Bank and other financial institutions to help restructure the debt, so that small businesses have lower interest costs, so that people with potential have the opportunity to get loans, not reduce interest rates without reason. Including the approach to taking care of vulnerable debtors, as they are small groups, the loan amount is not very high, but there are as many as 700,000-800,000 accounts, different from the debt problem during the crisis in 1997, which was large private debt, the number of accounts was not many compared to the large amount of debt per person. It is confirmed that it is not a haircut, but rather a debt relief, allowing small groups to move forward. The Treasury and the Bank of Thailand are therefore ready to cooperate closely in solving the household debt problem. As for the inflation framework, they are preparing to meet for further discussions again. Source: Thai News Agency