Interest rate cuts have uneven impact for retail borrowers

Retail borrowers have begun to benefit from a series of policy rate cuts over several months.

- SOMRUEDI BANCHONGDUANG

Some retail borrowers may not immediately notice the impact of lower interest rates.

However, the impact may not be immediately noticeable for some borrowers as their monthly instalment payments could remain static.YEAR OF POLICY EASING

The Bank of Thailand's Monetary Policy Committee (MPC) began shifting to an accommodative monetary policy in October 2024, marking the start of a policy rate downcycle that continued through its latest meeting on Feb 25, 2026.

Over the course of the easing cycle, the central bank lowered its benchmark policy rate from 2.5% to 1%, representing a cumulative reduction of 1.5 percentage points in just over a year.

According to Kanjana Chockpisansin, head of research for the banking and financial sector at Kasikorn Research Center (K-Research), commercial banks have gradually transmitted the policy rate cuts to customers by trimming their prime lending rates, including the minimum lending rate (MLR), minimum overdraft rate (MOR) and minimum retail rate (MRR).

However, each bank adjusts lending rates differently in terms of timing and scale. Some lenders cut rates immediately after the MPC's decision, while others delay the adjustment. In some cases, the reduction matches the policy rate change, while in others, banks lower lending rates by a smaller margin.

In the latest round, the country's six domestic systemically important banks (D-SIBs) reduced their prime lending rates by about 0.1 percentage point each, following the policy rate cut of 0.25 percentage points on Feb 25, which reduced the benchmark rate to 1%.

However, Siam Commercial Bank (SCB) lowered its prime lending rates by between 0.05 and 0.15 percentage points.

The six D-SIBs comprise: Bangkok Bank, Krungthai Bank, Kasikornbank, SCB, Bank of Ayudhya (Krungsri) and TMBThanachart Bank.