Post by account_disabled on Dec 13, 2023 5:06:59 GMT
Thailand's rising interest rate cycle this time...where will it end? The Thai economy is recovering continuously. But there is still a risk from inflationary pressures. Overall, the Thai economy is recovering continuously. from the important support of the tourism sector and private consumption Economic indicators in many dimensions are closer to pre-COVID-19 levels. Thai inflation has already passed its highest point in the third quarter of 2022 and there are signs of continued expansion at a slower rate. But there are still high risks. from the passing of costs from producers to consumers and inflationary pressures on demand following the economic recovery during the rest of the year. In terms of financial conditions, Thailand has tightened slightly. This follows the increase in the policy interest rate of the Bank of Thailand (BoT) since August 2022.
In this up-interest cycle, the BoT has raised the policy interest rate 5 times Phone Number List in succession, from 0.5% to 1.75. % Interest rates in the Thai financial market began to increase. both in the credit market and the bond market An increase in the BoT's policy interest rate has resulted in higher interest rates in the financial market. The size and duration of the transmission of the policy interest rate to the interest rates of each type of financial institution differs. SCB EIC found that financial institutions have the greatest transmission of the policy interest rate to the prime large customer loan interest rate, or MLR. (57%), followed by pass-through to the 12-month fixed deposit interest rate (56%), while pass-through to the MRR interest rate was the least (22%).
In addition, the cost of Raising funds in the Thai bond market also increased in line with the policy interest rate. SCB EIC estimates that Thailand's latest neutral rate is likely to be 2.5%. SCB EIC expects that the BoT will continue to raise the policy interest rate to a level appropriate for stable economic growth in the long term. It is estimated that Thailand's latest neutral rate is at 2.5%, which is a level consistent with economic expansion at its potential level and inflation is in line with the BoT's inflation target framework. In addition, Thailand's real interest rate in At present, it is still continuously negative. The BoT is likely to raise the policy interest rate to a level that will bring the real interest rate back to positive. and maintain interest rates at that level for a while to allow the policy interest mechanism time to be passed on to the economy. Raising the policy interest rate to the neutral rate level will result in a slight decrease in economic expansion.
In this up-interest cycle, the BoT has raised the policy interest rate 5 times Phone Number List in succession, from 0.5% to 1.75. % Interest rates in the Thai financial market began to increase. both in the credit market and the bond market An increase in the BoT's policy interest rate has resulted in higher interest rates in the financial market. The size and duration of the transmission of the policy interest rate to the interest rates of each type of financial institution differs. SCB EIC found that financial institutions have the greatest transmission of the policy interest rate to the prime large customer loan interest rate, or MLR. (57%), followed by pass-through to the 12-month fixed deposit interest rate (56%), while pass-through to the MRR interest rate was the least (22%).
In addition, the cost of Raising funds in the Thai bond market also increased in line with the policy interest rate. SCB EIC estimates that Thailand's latest neutral rate is likely to be 2.5%. SCB EIC expects that the BoT will continue to raise the policy interest rate to a level appropriate for stable economic growth in the long term. It is estimated that Thailand's latest neutral rate is at 2.5%, which is a level consistent with economic expansion at its potential level and inflation is in line with the BoT's inflation target framework. In addition, Thailand's real interest rate in At present, it is still continuously negative. The BoT is likely to raise the policy interest rate to a level that will bring the real interest rate back to positive. and maintain interest rates at that level for a while to allow the policy interest mechanism time to be passed on to the economy. Raising the policy interest rate to the neutral rate level will result in a slight decrease in economic expansion.