What Happend To Thai Interest Rates / Mortgage Rate

[chanchao]

Here's a question for any resident economists...

When the Thai economic bubble burst in 1997 or so, what happened to interest rates/mortgage rates at Thai banks? Down, stayed the same, or went through the roof?

If the Thai economy implodes again, (e.g. due to prolonged instability in government, loony military governments, or the inevitable change of the head of state to the scenario everyone fears) what would happen to interest rates and/or the baht exchange rate to other currencies?

[soap]

Here's a question for any resident economists...

When the Thai economic bubble burst in 1997 or so, what happened to interest rates/mortgage rates at Thai banks? Down, stayed the same, or went through the roof?

If the Thai economy implodes again, (e.g. due to prolonged instability in government, loony military governments, or the inevitable change of the head of state to the scenario everyone fears) what would happen to interest rates and/or the baht exchange rate to other currencies?

i am no resident economist but what i remember before the bubble burst in 1997

the thai baht was tied to the dollar,i was getting 12 to 15% on my fixed deposit

thai baht account but i was only getting about 40 baht to one english pound,so the morgage rates must of been about 18%.

when the bubble burst i remember getting 89.6 baht for one pound but the interest rates had come right down to 2 or 3 %

i doubt very much if the thai economy is going to explode as in 1997 the interest rates are a lot lower and stable,the banks have put measures into place to make it harder for their corrupt managers to lend money willy nilly for a backhander

[chanchao]

Thanks for that!!!

I'm asking because we're about to loan a large sum of baht.. So interesting to speculate on what would happen if things fall apart in the Thai economy... It seems to me that as the money is in Thai baht anyway, even if the whole lot goes down the drain then I could source some overseas money to transfer into baht when the exchange rate is favorable..

[fxm88]

I'm asking because we're about to loan a large sum of baht..

Simple answer: don't loan baht; loan euros instead (or dollars or whatever currency you have faith in).

Then, if the economy falls apart, you'll still be owed euros (or whatever) and it will be the Thai's problem of figuring out how to pay back a debt that has suddenly doubled or tripled in terms of baht.

Of course, this is exactly how Thailand got into trouble in '97.

Good luck!

Edited April 17, 2007 by fxm88

[soap]

Thanks for that!!!

I'm asking because we're about to loan a large sum of baht.. So interesting to speculate on what would happen if things fall apart in the Thai economy... It seems to me that as the money is in Thai baht anyway, even if the whole lot goes down the drain then I could source some overseas money to transfer into baht when the exchange rate is favorable..

i think its a case of allways look on the bright side of life.

if you are in thailand and you borrow baht i presume you will pay the loan back in baht your interest rates will only go up if there is fear of inflation or the economy starts to overheat.

if by some chance the bubble does burst again i cant see the bank of thailand putting up interest rates to kick start the economy.

if you are happy with the loan you are taking out and your interest rate,stick with it

[Barney_the_Dinosaur]

I'm asking because we're about to loan a large sum of baht..

Simple answer: don't loan baht; loan euros instead (or dollars or whatever currency you have faith in).

Then, if the economy falls apart, you'll still be owed euros (or whatever) and it will be the Thai's problem of figuring out how to pay back a debt that has suddenly doubled or tripled in terms of baht.

Of course, this is exactly how Thailand got into trouble in '97.

Good luck!

I think he originally meant 'borrow' not loan.

[Heng]

i am no resident economist but what i remember before the bubble burst in 1997

the thai baht was tied to the dollar,i was getting 12 to 15% on my fixed deposit

thai baht account but i was only getting about 40 baht to one english pound,so the morgage rates must of been about 18%.

How long before '97 are you talking about? Back in 95-96, the fixed account interest rate was more like 10% (this is just rough calculation from some of our old passbooks from that time... only big three banks... SCB, BBL, Thai Farmers/KBank) creeping towards 9% pre-"crash." I have some 10.5s from mid 95, and two books at 9% updated in late 1996.

[soap]

i am no resident economist but what i remember before the bubble burst in 1997

the thai baht was tied to the dollar,i was getting 12 to 15% on my fixed deposit

thai baht account but i was only getting about 40 baht to one english pound,so the morgage rates must of been about 18%.

How long before '97 are you talking about? Back in 95-96, the fixed account interest rate was more like 10% (this is just rough calculation from some of our old passbooks from that time... only big three banks... SCB, BBL, Thai Farmers/KBank) creeping towards 9% pre-"crash." I have some 10.5s from mid 95, and two books at 9% updated in late 1996.

hello heng

has you know time passes so quickly but i clearly remember an advertisement in the bangkok post from city bank giving 16% on thai baht also we bought a property from a bank auction just over 2 years ago the property had been reposessed because the debtor had not made any bank payments for over 10 years,in the paper work we got with the property it stated that the morgage repayments were 18%