Top banker expects policy interest rate to rise to 2% in H2

BANGKOK, July 21 – The policy interest rate is likely to further increase by 50 basis points to 2 per cent in the second half of this year, according to a veteran banker.

Kasikornbank’s Executive Vice President Pakorn Partanapat, however, said whether lending rates offered by commercial banks would increase accordingly depended on the direction of interest rates, liquidity conditions, competition in the market, and the possible impacts on clients.

Because of this, he predicted that lending rates would increase by no more than 50 basis points.

Normally, he said, lending rates offered to small- and medium-size enterprises (SMEs) are floated. So it is believed the current interest rate hike would not adversely affect operating costs of entrepreneurs and their loan repayment prospects.

Mr Pakorn conceded the SME loan interest spread, which is currently very high, reflected loan risks because SMEs have a high-risk financial position and their accounting systems are not as clear as those of major entrepreneurs.

However, he believed, SMEs are satisfied with high interest payments if they received suitable and sufficient financial services. (MCOT online news)