Illustrative image (Photo: https://www.thephoenixcapitalgroup.com/)Bangkok (VNA) – The valueof deposits under the Deposit Protection Agency (DPA) of Thailand fell by 1.32%year-on-year, the first decline in a decade, attributed to a fragile economyand war in the Middle East.
According to DPA President Songpol Chevapanyaroj, as of Aug 31, 2023, depositsamounted to 16 trillion THB (440 billion USD), down by 212 billion THB fromthe end of 2022.
The factors for this shift included uneveneconomic conditions, rising costs of living, and the search for alternativeinvestments with higher returns than deposits, such as gold, he said.
Asof August this year, depositors with amounts not exceeding 50,000 THB held a total 340 billion THB, down by 3.61% compared with a 0.63% contraction at the end oflast year. Furthermore, 80% of those depositors have lessthan 5,000 THB in their account, said the agency.
Meanwhile, depositorswith between 50,000 THB and 1 million THB decreased in both the number ofdepositors (by 33%) and the amount of deposits over the past five years.
Songpol said the factors affecting the economyand deposits include rising inflation and interest rates, the Russia-Ukraine conflict,the escalating Israel-Hamas conflict, the lingering effects of the COVID-19pandemic, and swelling household debt.
The interest rate gap between the US (more than5%) and Thailand (2%) has led some depositors to withdraw theirbaht-denominated deposits and put the money in a foreign deposit account.
However, depositors in foreign currency depositaccounts are not protected by the DPA and must bear exchange rate risk despitereceiving higher interest rates./.
