Key Interest Rates In Both Thailand And Us Likely To Decline

Key interest rates in both Thailand and US likely to decline next year

BANGKOK: -- Key interest rates in Thailand and the United States are likely to begin to decline next year since the economies of both countries have already slowed down, according to a top banker.

Prasarn Trairattanaworakul, President of KASIKORNBANK (KBANK), said on Friday that most analysts viewed the policy interest rates of both countries would not increase above the current level.

They believed the key US interest rate would stay unchanged at 5.25 per cent until the end of this year.

It is likely that the key US interest rate will begin to drop to 4 per cent next year.

But economic conditions in the US must also be monitored periodically.

In Thailand, the economy has experienced a slowdown like the US.

So, it is expected that Thailand's policy interest rate will fall to 3-4 per cent next year from 5 per cent at current.

It would result in deposit and lending rates declining accordingly, Mr. Prasarn noted.

He projected that the deposit and lending rates offered by local commercial banks would increase by no more than 0.25 per cent in the fourth quarter of this year and then begin to stay unchanged for a while.

--TNA 2006-08-25