Bank of Thailand accepts that the ammunition is almost exhausted to support the economy. Ignore the compression of liquidity injection tools or QE into the system. Ask everyone to help pull GDP from negative.
On August 4, 21, Mr. Thitanan Mallikamas, secretary to the Monetary Policy Committee (MPC), said that the Thai economy in 2021 is expected to grow at 0.7% and in The year 2022, at 3.7 percent, has included the latest factors until Aug. 3, including the latest outbreak control measures upgrading the deep red to 29 provinces, as well as progress on remedial measures.
However, despite the factors that put a lot of pressure on the Thai economy But there are still other engines ahead. that still have some support for the economy, such as exports of goods that expand well following the weaker foreign demand than Thailand Fiscal sector that issued various remedial funds to stimulate the economy and reduce the impact of epidemic control which has contributed to the Thai economy to expand
including controlling the outbreak and accelerating the relaxation of measures to reduce mobility If it can relax no later than the beginning of the 4th quarter of 2021, it will help the Thai economy to not contract this year.
“There is a possibility that the Thai economy will slow down much more than the base case. But there is still a lot of uncertainty as to how it will develop. The Thai economy, which grew at 0.7%, is considered quite low from the previous year’s contraction of -6.1% and compared to other countries. in the region that is still expanding quite well It must work together from all sectors to help drive and sustain the economy through the crisis. and must do the best from today without having to wait for the Thai economy to deteriorate to a negative size this year.”
The baht tends to depreciate in line with regional currencies due to concerns about the escalating outbreak of delta species. This affects the economic recovery, especially in many emerging market countries with low vaccination rates.
The baht depreciated more than regional currencies due to the COVID-19 situation. and the slow recovery of the Thai economy. The BOT closely monitors the developments of the global and Thai financial markets. by keeping the baht stable does not hinder the adjustment of the business sector
In the case of a proposal for the Bank of Thailand to consider the use of a liquidity injection tool or QE, which has the effect of supporting the economy in the short term Confirming that under the situation of an escalating outbreak and the policy interest rate is low on ammunition, the BOT has studied other financial instruments.
By doing QE, it may not answer Thailand’s question because 1. The current problem is not enough liquidity. 2. Thailand is a bank-based economy. The private sector raises funds through the bond market, only 10%. Doing QE will benefit in a limited way.
3. The cost of raising funds in the bond market is already low. Therefore, the measures that answer the question now are financial and credit measures. which must accelerate the improvement of measures to be more effective by accelerating the distribution of liquidity to those affected to the point and reducing debt burden, such as loan rehabilitation measures Measures to suspend debt and other measures of specialized financial institutions
Along with pushing for financial institutions to accelerate debt restructuring to achieve broad results and in line with the debtor’s ability to repay in the long term. low current
