ID :
114299
Wed, 03/31/2010 - 10:00
Auther :
Shortlink :
http://m.oananews.org//node/114299
The shortlink copeid
Mounting political woes likely to affect loan growth, says BoT
BANGKOK, March 31 (TNA) – Bank of Thailand (BoT) Deputy Governor Krirk Vanikkul on Tuesday allowed that the country's mounting political uncertainties might affect the loan growth target set earlier by commercial banks at around 10 per cent for this year.
He said the ongoing political standoff put private companies in a more difficult position to run the business and discouraged them from seeking new loans for investment.
Under the circumstances, continuing political disorder could impact the demand for loans so that they decline to such an extent that overall loan growth this year could be affected.
However, Mr Krirk believed the political woes would not adversely affect lending in individual industrial sectors because loans extended by commercial banks had continued growing since the fourth quarter of 2009.
At present, the overall picture of lending by commercial banks remains unchanged, he said, adding that it continued expanding.
“Lending by commercial banks depends on the economic conditions. Whether and how adversely the loan growth target set for this year will be affected is beyond expectation," he said, "but if economic growth is deterred by the political uncertainties, it will impact the loan demand”.
Even if the country experiences ongoing political conflicts, he believes, commercial banks will continue lending in sufficient amounts to nurture the economy.
Even if there comes a political vacuum as a result of the dissolution of the House of Representatives, he was confident, that commercial banks would extend loans without interruption because it is their main duty to do that.
Mr Krirk said the central bank would attempt in every possible means to facilitate lending by commercial banks to ensure the smooth economic growth.
However, the Bank of Thailand is unable to compel the banks to lend if there are economic risks because it goes against liberal market principles, he added. (TNA)
He said the ongoing political standoff put private companies in a more difficult position to run the business and discouraged them from seeking new loans for investment.
Under the circumstances, continuing political disorder could impact the demand for loans so that they decline to such an extent that overall loan growth this year could be affected.
However, Mr Krirk believed the political woes would not adversely affect lending in individual industrial sectors because loans extended by commercial banks had continued growing since the fourth quarter of 2009.
At present, the overall picture of lending by commercial banks remains unchanged, he said, adding that it continued expanding.
“Lending by commercial banks depends on the economic conditions. Whether and how adversely the loan growth target set for this year will be affected is beyond expectation," he said, "but if economic growth is deterred by the political uncertainties, it will impact the loan demand”.
Even if the country experiences ongoing political conflicts, he believes, commercial banks will continue lending in sufficient amounts to nurture the economy.
Even if there comes a political vacuum as a result of the dissolution of the House of Representatives, he was confident, that commercial banks would extend loans without interruption because it is their main duty to do that.
Mr Krirk said the central bank would attempt in every possible means to facilitate lending by commercial banks to ensure the smooth economic growth.
However, the Bank of Thailand is unable to compel the banks to lend if there are economic risks because it goes against liberal market principles, he added. (TNA)
