Bank of Thailand injects money for commercial banks
BANGKOK, Oct 25 – Thailand’s central bank, the Bank of Thailand (BoT), and the Bank of Japan on Monday signed an accord to cooperate in supporting liquidity for foreign entrepreneurs affected by flooding.
The emergency assistance is being provided in the form of Thai baht-denominated credit through both Thai and foreign banks, said BoT governor Prasarn Trairatvorakul on Tuesday.
A number of Japanese-owned businesses in Thailand have been critically-affected by flooding after seven industrial estates were submerged.
Under the agreement, the business owners are allowed to use Japanese government assets such as government bonds as collateral to seek loans from foreign banks, including Thai banks holding Japanese bonds, for the rehabilitation of Japanese industries.
The BoT is ready to offer loans with a market interest rate within 1-2 weeks and with no limits of the loan amount prescribed, Mr Prasarn said.
Regarding Thai commercial banks, after the flood recedes, the BoT will offer the Thai institutions loans to help entrepreneurs revive their flood-affected businesses.
The BoT also discussed with the US Federal Reserve, Bank of England and Germany’s Bundesbank for similar cooperation to help foreign banks with insufficient Thai baht to offer additional loans for customers of their own nationals, whose businesses have been affected by this season’s floods.
Under the cooperative agreement which is yet to be reached, the foreign banks are expected to have collateral to seek loans from the BoT to extend credit to their customers.
Meanwhile, the BoT reported 13 commercial banks have temporarily closed 283 branches including 132 in Pathum Thani, 63 in Nonthaburi, 46 in Ayutthaya, 18 in Nakhon Sawan, 21 in Bangkok, one in Chai Nat, one in Lopburi and the other in Uthai Thani. (MCOT online news)