Commercial bank deposits of excess funds with the central bank - via bond repurchases - surged 19 percent to 913 billion baht ($27.93 billion) on Jan. 6 in a single day.
Two days later, the funds placed with the central bank in 1-day, 7-day, 14-day and 1-month bond repurchase agreements touched 966 billion baht, a high of at least one year, central bank records show. Volumes have since mostly stayed above 800 billion baht, versus 760 billion baht on average in 2014.
Bankers said the extra cash partly stemmed from funds that commercial banks raised in 2014 in anticipation of demand for loans to state enterprises. But a delay in some of the big-ticket government projects and a weaker economy have slowed lending, leading to a situation where banks have the cash but borrowers are scarce.
The funds held by the banks may linger in the money markets until government and state enterprise projects kick off, possibly in the latter half of 2015, analysts say. They also see no urgency for the central bank to cut rates, to some extent because of this.