Thailand

Thailand unveiled a fresh set of debt-relief measures to cover millions of retail borrowers and small businesses struggling to repay loans, the latest bid by authorities to tackle the highest level of household debt in Southeast Asia, Bloomberg News reported.

Thailand's banking system has large excess liquidity and the central bank has not tightened its lending supervision, an assistant governor said on Monday, reflecting banks' reluctance to lend, Reuters reported. Banks' lending decisions will depend on debtors' ability to repay debts, Sakkapop Panyanukul said in an article, opens new tab published on the Bank of Thailand's website. The banking system has had a lot of excess liquidity over the past 10 years, as reflected by deposits and investments of commercial banks at the BOT in the past, he said.

Thailand is working on a raft of fresh fiscal measures to sustain an economic recovery, foster new foreign investment and lower the near-record household debt, Prime Minister Paetongtarn Shinawatra’s top aide said, Bloomberg News reported. The economic stimulus panel chaired by the premier is set to consider the second phase of a cash handout plan and other steps at a meeting next week, according to Paetongtarn’s Secretary-General Prommin Lertsuridej. Easier rules for long-term land leasing and credit restructuring led by government banks are also on the anvil, he said.

Thailand is set to appoint former Finance Minister Kittiratt Na-Ranong as the new Bank of Thailand chairman, a sign of the government seeking to tighten its grip over the central bank with which it has sparred over monetary policy and inflation targets, Bloomberg News reported. Kittiratt, a critic of the BOT’s hawkish monetary policy and a former member of the ruling Pheu Thai party, was picked as the new chairman at a near five-hour meeting of the selection panel on Monday, according to people familiar with the matter. Thai media earlier reported that Kittiratt was selected.

Thai authorities reached a tentative agreement to keep the inflation target at 1% to 3% for next year, with the Finance Ministry pressing the central bank to take steps to spur price gains and growth in Southeast Asia’s second-largest economy, Bloomberg News reported. The price goal, in place since 2020, could be retained in 2025 provided the Bank of Thailand comes up with policies to push up inflation to 2%, Finance Minister Pichai Chunhavajira told reporters after a two-hour meeting with central bank Governor Sethaput Suthiwartnarueput on Tuesday.

Thailand central bank’s interest rate cut last week was a “recalibration” made by policymakers and doesn’t mark the start of an easing cycle, according to Governor Sethaput Suthiwartnarueput, Bloomberg News reported. “We do not see it as the beginning of an extended easing cycle,” the governor said at the Institute of International Finance forum in Washington on Tuesday.

Thailand’s central bank has joined the ranks of monetary authorities who are easing monetary policy, surprising markets with its first rate cut in over four years to help boost the economy, the Wall Street Journal reported. The decision wasn’t unanimous. The Bank of Thailand said Wednesday that its policy committee voted five to two to reduce the policy interest rate to 2.25% from 2.50%. The bank had kept its key rate at a decade-high since September last year, but has faced rising pressure to lower borrowing costs to lift an economy struggling with tepid demand.

Thailand’s Finance Ministry plans to propose a higher inflation target of 1.5%-3.5% for next year, adding pressure on the central bank to cut its key interest rate, Bloomberg News reported. The ministry is due to hold talks with the Bank of Thailand to finalize the price band later this month, the people said, asking not to be named as they aren’t authorized to discuss the information. The central bank and the Finance Ministry need to agree on the target before it’s sent to the Cabinet for approval.

Thai Airways International Pcl plans to issue new shares worth at least 42 billion baht ($1.3 billion) to creditors and other investors by December, a major step toward exiting a court-monitored debt restructuring and resumption of trading in its shares, Bloomberg News reported. The carrier will offer about 6.81 billion new shares to creditors under a debt-to-equity swap, according to its regulatory filing Monday. These stocks are priced at 2.5452 baht each, valuing the offering at 17.3 billion baht, it said.