Local interest rates likely to rise in 2nd half of 2010

BANGKOK, Nov 18 (TNA) – Local interest rates are likely to edge up by 25-50 basis points in the second half of next year due to the expected improvement in the country’s economic conditions, according to a top Bangkok commercial banker.

Speaking after presiding over the “SCB Home Loan Expo” being held at Mahisorn Hall in Siam Commercial Bank’s headquarters November 17-20, SCB president Kannikar Chalitaporn predicted the Thai economy will expand 3-4 per cent in 2010.

Competition in lending by commercial banks will intensify, she said, causing a decline in liquidity in Thailand’s banking system.

She allowed that loans extended this year will grow only at the lowest level.

SCB expects loans extended by the bank for 2009 will grow less than 3 per cent due to the global economic slowdown, but she is confident that SCB’s loans for housing and vehicle purchases, small-and medium-size enterprises (SME), and business-sector support, will grow significantly next year.

Asked to comment on the government’s one-year performance, Mrs. Kannikar said it had both positive and negative outcomes.

The government-supported economic stimulus package, she conceded, helped boost the country’s economic growth although it had been just implemented.

Regarding Thailand’s persistent domestic political conflicts, the SCB chief said: “Everyone has begun to get used to the situation. Even so, I hope there will be no further violence. The best way out of this situation is that all Thai people must unite.” (TNA)