Thai Banks Slash Interest Rates to Prop Up Wobbling Economy

Lenders follow central bank's lead, easing debtor burdens as Thailand's growth falters and trails regional rivals

 

Thailand's major commercial banks are cutting interest rates, following the central bank's push to support struggling borrowers and shore up a fragile economy.

 

The move comes as Thailand's GDP growth lags behind its Southeast Asian neighbours, hampered by high debt, weak consumer spending, and slowing investment.

 

These domestic issues, alongside external pressures, have compelled banks to adopt a cautious approach to lending.

 

This is reflected in the Bank of Thailand's (BOT) Q1 2025 report, which showed commercial bank lending contracting for the third consecutive quarter by 1.3%. Non-performing loans (NPLs) are also on the rise, particularly for SMEs and home loans.

 

Suwannee Jatsadasak, a BOT Assistant Governor, confirmed ongoing talks with the Finance Ministry to launch a second phase of the "You Fight, We Help" debt relief programme by mid-to-late June.

  

She noted the existing programme already impacts bank profits, as part of it involves banks absorbing costs to help debtors.

 

While acknowledging that the latest central bank rate cut in April didn't fully translate into lower lending rates, Suwannee explained this is partly because rates are already at a low level.

 

However, a series of cuts since late 2024 has provided some relief. She stressed the cuts are primarily aimed at easing debtors' financial burdens, rather than stimulating new lending, given the high credit risk of many borrowers.
  



 

Major Banks Detail Rate Reductions

Following the Monetary Policy Committee's (MPC) rate cut on 30 April 2025, several prominent Thai commercial banks have announced specific reductions to their lending rates:

Kasikornbank (KBANK): Reduced its MLR (Minimum Lending Rate) by 0.08% to 6.97%, MOR (Minimum Overdraft Rate) by 0.15% to 6.94%, and MRR (Minimum Retail Rate) by 0.05% to 7.03%. Deposit rates were also trimmed by 0.05%-0.20%.

Krungthai Bank (KTB): Cut its MOR by 0.15% to 6.87%, MLR by 0.075% to 6.75%, and MRR by 0.05% to 7.295%. Deposit rates were also reduced by 0.075%-0.20%, effective 15 May 2025.

TMBThanachart (TTB): Announced reductions of up to 0.15%, with MOR down by 0.15%, MLR by 0.10%, and MRR by 0.05%. Notably, tTB also increased its tTB No Fixed savings account interest rate by up to 0.40% to encourage deposits, effective 1 June 2025.

Siam Commercial Bank (SCB): Reduced its MLR to 6.75%, MOR to 6.925%, and MRR to 7.025%.

Bangkok Bank (BBL): Lowered its MLR to 6.75%, MOR to 7.00%, and MRR to 6.90%.

(2025/05/26-00:00)