	thai banks weigh new  rate cut officials of five thai commercial banks are expected to meet tomorrow to seek agreement on cutting  rates banking sources said they said they expect thai banks to opt for a cut to spur domestic loan demand to help reduce persistent high liquidity on the money market many bankers have been urging an average half percentage point cut in deposit rates and a one point cut in lending rates they said six major thai major banks reduced minimum loan and overdraft rates by to percentage point on february but the move has not substantially increased loan demand the sources said excess liquidity has been hitting bank profits since early last year despite five  rate cuts in the current gross pct  rate for one year fixed bank deposit and the pct minimum loan rate are the lowest in a decade bankers said the thai banking system is saddled with about to billion baht of surplus funds which have created problems for many banks in managing their money effectively profits of many thai banks fell sharply last year partly because of a mismatch of loan demand and bank deposit growth the bank of thailand estimated overall lending by the thai banking system grew pct in against a pct expansion in bank deposits reports of a possible new round of  rate cuts have further buoyed the thai stock market this week the securities exchange of thailand set index on monday recorded its biggest daily advance in recent years shooting up points to a new seven year high of brokers and market analysts said thai stocks will register more gains as long as liquidity remains in the money market thai and foreign bankers said the liquidity problem will grow if the bank of thailand does not extend permission for local banks to hold foreign exchange positions up to pct of bank capital if the regulation is not extended beyond its april expiry date many commercial banks will have to reduce foreign exchange holdings to a maximum pct bankers said such that could add another five billion baht of surplus funds to the local money market reuter 
