Bangkok: "Pichai" hopes the MPC on 26 Feb. will reduce interest rates, increase momentum - increase heat for the economy during the period when GDP starts to increase, explaining the advantages of helping the baht weaken, supporting exports, and asking the Bank of Thailand to soften the LTV criteria, making it more flexible to grant loans, aiming to add measures to solve debt, helping to adjust the structure better.
According to Thai News Agency, Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, expressed his expectations for the upcoming Monetary Policy Committee (MPC) meeting on February 26. He emphasized that, given Thailand's consistently low inflation, a reduction in interest rates could boost economic growth. The previous year saw a 2.5% economic expansion, but no significant measures were taken in the first two quarters. Mr. Pichai believes that with proper steps, the economy can continue its upward trajectory.
Mr. Pichai highlighted that lower interest rates would not only stimulate the economy but also benefit Thai exports by weakening the currency, given its current strength compared to regional counterparts. He shared insights from a recent visit to Japan, noting that Japan had experienced similar currency fluctuations, which ultimately supported their export sector despite initial import challenges.
Furthermore, Mr. Pichai stressed the need for commercial banks to be more flexible with lending, especially to SMEs, in light of the economic recovery. He also urged the Bank of Thailand to consider relaxing the loan-to-value (LTV) ratio criteria to facilitate easier access to loans. He mentioned ongoing discussions with the Bank of Thailand and financial institutions to enhance measures for household debt resolution and restructuring, aiming for more automatic solutions and emphasizing the government's commitment to debt management strategies.
Mr. Pichai reiterated the importance of addressing the extensive number of debt accounts, proposing immediate measures to aid small debtors who are often unsure of their options. He concluded by emphasizing the significance of debt restructuring as a strategic government priority, with new measures expected to be announced soon.