Bangkok: The Governor of the Bank of Thailand (BOT) has announced the completion of plans to establish an Asset Management Company (AMC) aimed at tackling non-performing loans (NPLs) by the end of October. This initiative, along with potential interest rate reductions, is expected to provide relief to over 2.3 million people.
According to Thai News Agency, the new BOT Governor has expressed readiness to collaborate with the Ministry of Finance and the Thai Bankers' Association in forming the AMC. This move targets addressing NPLs of up to 100,000 baht per individual, with discussions expected to conclude by October. The debt transfer process is anticipated to commence in early 2026. Sukhumvit Asset Management Co., Ltd. (SAM) will be transformed into a social AMC, acquiring public debt from private financial institutions, while the Government Savings Bank's Ari AMC will focus on state financial institutions. The funding for this initiative will be sourced from the previously reduced contributions to the Financial Institutions Development Fund (FIDF).
The Monetary Policy Committee (MPC) has maintained the policy interest rate at 1.50% to allow previous rate cuts to impact the economy fully. However, the committee is prepared to lower rates further if necessary to ensure economic stability and address inflationary concerns. The BOT is also closely monitoring the movement of the baht to ensure it aligns with economic fundamentals and is coordinating with relevant agencies to prevent irregular capital movements.
Additionally, discussions with gold traders are underway to determine if further measures are needed to manage the baht's appreciation due to gold trading. Any actions taken will be implemented carefully to avoid negative impacts on the business sector and retail buyers.
The BOT Governor has confirmed that there are no current plans to establish a Sovereign Wealth Fund using international reserves. The management of international reserves is deemed effective, with appropriate asset allocation strategies in place.
The BOT's strategic focus remains on maintaining long-term economic and financial stability, ensuring low and stable inflation, and preventing financial system vulnerabilities. Key policy directions include financial sector development, promoting access to financial services, and the potential establishment of a virtual bank to enhance SME credit access.
Emphasizing independent operation within legal frameworks, the BOT Governor reiterated the commitment to work with the Ministry of Finance and the government, prioritizing policies that benefit the people, the nation, and society.