Excess liquidity to be absorbed if Thai bank loans grow by 8-9 percent.

Knight Ridder/Tribune Business News, October, 2004

By Darana Chudasri, Bangkok Post, Thailand Knight Ridder/Tribune Business News

Oct. 7--Excess liquidity of 300-400 billion baht in the money markets was expected to be absorbed within the next eight to 12 months so long as net loan growth remained at a steady 8-9 percent per year, according to Bunluasak Pussarungsri, senior economist and research manager at Bangkok Bank.

He said liquidity would fall even faster if the impact of new investment plans on state infrastructure projects was taken into account.

Falling liquidity would result in interest rates gradually rising starting from the second half of 2005.

Mr Bunluasak said deposit rates could rise at a faster pace then lending rates as some banks already boasted high...