Fronted by the Minister of Commerce Pichai Naripthaphan, the new government of Thailand under Prime Minister Paetongtarn Shinawatra once again called for the reduction of borrowing costs.
Instead of propelling national economic growth, the Bank of Thailand (BOT) may as well be maintaining an “outdated and too slow” way of thinking. The BOT is obliged to sustain the strength of Thai Baht which is currently damaging Thai exporters due to the currency being “too strong,” said Mr. Pichai, who has also been an advisor to the former government of Srettha Thavisin.
The discussion about the rate cut has taken place multiple times before – although the Bank of Thailand’s monetary policy committee always generated the same outcome. The most recent meeting held , for instance, ended up with a 6-to-1 vote to maintain its current rate at 2.5 percent – the same outcome across all 4 meetings held in 2024 so far.
The Committee of the Bank of Thailand plays a significant role in stipulating the monetary policy, provided they can exert control over the BOT’s operation and has the authority to evaluate the BOT governor’s performance, as well as be capable of appointing members of the monetary policy committee who is responsible for national financial direction.
That said, the call for rate cut from Paetongtarn’s government implies that the new administration will carry on an endeavor to regulate the financial authority, attempting to lessen the borrowing costs which are highest since 2013.
Pheu Thai Party has been in considerable conflicts with the BOT prior to its current run. In 2001 during Thaksin’s administration, the then-governor of the Bank of Thailand was dismissed due to a disagreement on the interest rate policy between the government and the BOT. Later in 2013, Mr. Kittirat Na Ranong, the then-Minister of Finance, also called for an interest rate reduction through the media.
Provided the conflicting opinion between the current government and the BOT, this administration would likely find it necessary to have their associate(s) installed as a chairman to orchestrate more influence on Thailand’s monetary direction, as well to subsequently appoint and review the performance of the governor of the central bank. Mr. Poramethi Vimolsiri is currently holding such a position though his tenure will come to an end this month.
In addition to the rate cut, the Ministry of Commerce intends to also provide support for Thai companies in pursuit of international markets, executing free trade agreements to improve trade and investment, as well protect local manufacturers from cheap imports by means of measures and implementation.
Given the foregoing, the current stock prices in the banking group are as follows:
TMBThanachart Bank Public Company Limited (SET: TTB) decreased by 2.48% or THB 0.05 to THB 1.97, with a trading value of THB 1.27 billion;
Bangkok Bank Public Company Limited (SET: BBL) dropped by 0.94% or THB 1.50 to THB 157.50, with a trading value of THB 906.6 million;
SCB X Public Company Limited (SET: SCB) declined by 0.89% or THB 1.00 to THB 111, with a trading value of THB 889.97 million;
TISCO Financial Group Public Company Limited (SET: TISCO) contracted by 1.03% or THB 1.00 to THB 96.50, with a trading value of THB 190.23 million;
Kiatnakin Phatra Bank Public Company Limited (SET: KKP) slumped by 1.45% or THB 0.75 to THB 51.00, with a trading value of THB 166.54 million;
Bank of Ayudhya Public Company Limited (SET: BAY) lost 0.91% or THB 0.25 to THB 27.25, with a trading value of THB 11.59 million;
Kasikornbank Public Company Limited (SET: KBANK) gained by 0.32% or THB 0.50 to THB 158, with a trading value of THB 1.54 billion; and
Krung Thai Bank Public Company Limited (SET: KTB) contracted by 0.49% or THB 0.10 to THB 20.40, with a trading value of THB 560.61 million.
