BoT says bank lending would grow larger

BANGKOK, Feb 12 (TNA) -- After noticing that interest rates on long-term bond have started rising, Veerathai Santiprabhob, governor of Bank of Thailand (BoT), says he is optimistic that lending by commercial banks would grow larger in 2017. Mr Veerathai said during a recent speech that there are positive signs that lending by commercial banks in Thailand would grow larger than 2 per cent in 2016. Interest rates on bond have started increasing and the private sector who had mobilised funds through issuing debt instruments and debentures because of low rates last year have begun to request for loans from commercial banks, he said. Businessmen are expanding their production while many of them plan to invest on major projects and they need to request for more loans from banks, said Mr Veerathai. However, BoT’s Monetary Policy Committee does not believe that low lending by banks would pose an obstacle to economic recovery in Thailand because liquidity in the system is still high and businessmen still have an access for borrowing, he said. Operators of small and medium-sized enterprises may find difficulty in asking for loans, said Mr Veerathai, adding that financial institutions are still willing to support them to encourage economic recovery in the country. In 2016, non-performing loans (NPLs) rose by 2.83 per cent from the previous year, but Mr Veerathai is confident that NPL situation would decline this year. On forex volatility, he warned private sector to be prepared the measures to response and should avid speculation on the exchange reate because the BoT uses the floating exchange policy against foreign currencies. (TNA)