A deputy finance minister in Thailand announced on Thursday that the country is intending to provide 55 billion baht ($1.66 billion) in soft loans to bolster the property sector and stimulate economic growth.
Paopoom Rojanasakul, Deputy Finance Minister, informed reporters that the proposal will be presented to the cabinet for approval.
Meanwhile, property developer stocks witnessed a substantial increase on Wednesday after the central bank’s decision to cut interest rates.
Sansiri (SET: SIRI), AP (Thailand) (SET: AP), Origin Property (SET: ORI), Land and Houses (SET: LH) and other stocks posted substantial gains by 5-6% yesterday.
This move by the bank was made in an effort to stimulate economic growth amidst increasing concerns about the global economy’s performance. The reduction in interest rates is expected to boost borrowing and spending, which in turn is likely to benefit the property market. As a result, investors showed optimism by driving up the prices of property developer stocks.
Additionally, the lower interest rates could potentially lead to higher demand for properties, further supporting the positive sentiment towards the sector.
In an unexpected turn of events, Thailand’s central bank, the Bank of Thailand (BOT), decided to lower its key interest rate during a policy review on Wednesday. This move, which has been advocated for by the government to stimulate a sluggish economy facing below-target inflation, marks a significant shift in monetary policy.
The BOT’s monetary policy committee, with a 5 to 2 vote, opted to decrease the one-day repurchase rate by 25 basis points to 2.25%.
