© Reuters. FILE PHOTO: Thailand’s central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo
BANGKOK (Reuters) – Thailand’s central bank said on Tuesday it planned to introduce debt consolidation measures to help reduce interest rates on consumer loans for retail debtors, as the country suffers its most protracted coronavirus outbreak so far.
The move is viewed as more useful than cutting the rate ceiling of those loans, at a time of high credit risk, as it would push debtors with bad credit to borrow outside the financial system, said Oramone Chantapant, deputy director at the Bank of Thailand (BOT).
“What will help debtors a lot is debt consolidation, which will be introduced in the middle of next month and we will also increase incentives,” she told a briefing.
However, cutting the rate ceiling remains a policy option, she added.
In June, the government asked the BOT to review interest rates for personal loans and credit cards to ease people’s interest burden.
The BOT has said it would focus on financial support measures to assist debtors as the central bank governor recently said interest rates were a blunt tool.