But the National Bank, as a central bank Its main duty is to take care of overall “stability” of the country’s economy.
It must be analyzed in a way that adheres to academic principles. and reasonable economic principles that can be explained to the public
Therefore, the Bank of Thailand’s “expression of concern” to Prime Minister Settha In the case of making a policy that requires a large budget But the positive effects are not yet clear or may have long-term effects, so it is important.
Thai people expect that Central banks will have the courage to be professional and ethical. To argue and oppose the government in cases where it is seen that any policy is contrary to correctness and appropriateness according to academic principles.
Last week, Dr. Setthaput Suthiwatnarueput He told the media that he had the opportunity to meet and discuss with the Prime Minister. and related teams
and had the opportunity to express those concerns to the new government
Importantly, Dr. Setthaput did not just speak to the Prime Minister. and relevant ministers only in the conference room
but also reports to the public through the media on how they have expressed their concerns and made suggestions.
As for whether the government will follow suit or not, it is a matter for the government to be responsible to the people.
The National Bank also has a responsibility to the public. As an organization that must be independent Free from inappropriate pressure from politics as well.
The main message that Dr. Setthaput said he informed Prime Minister Settha was to recommend to the government that the distribution of digital money and suspension of debt to farmers should be done in a form “Aimed at a specific group”
You should not use casting methods that require a huge budget. This may have negative consequences in the medium and long term.
While the government focuses on growth or the rate of economic growth But the central bank has the main duty of giving importance to stability and sustainability. which means stability and sustainability
The Governor of the Bank of Thailand said that What we try to emphasize in terms of monetary policy is that the BoT is currently implementing a monetary policy called Outlook Dependent, which is looking ahead.
Although inflation has been lower than expected in the latter period, the BoT has not adjusted the direction of monetary policy in any way.
The Governor of the BoT said that if monetary policy is adjusted according to the information released, Policy will fluctuate, which is something that should not be done.
Because right now there is a lot of noise in the market. We as policy makers We don’t want to add anything and add noise to the market.
“I therefore think that policy should have a certain level of stability. by looking ahead And as said, sometimes information comes out during this time. But that doesn’t mean things will change in the future.”
and added that
“When we look ahead I must say that according to the outlook, inflation is likely to depend. Even though there is a short-term policy like that (Reducing electricity and diesel prices) because of the risks we clearly see.”
The first is world energy prices that show signs of coming back up.
Another thing that is quite worrisome is El Niño that will have an impact on food prices. This is because the weight of food prices in the basket (inflation) is quite high.
Dr. Setthaput pointed out that economic conditions that will recover, such as tourism If there are various stimulus measures to increase inflationary pressure on the demand side
With the picture that inflation should go up. The BoT must therefore look at monetary policy in a format that is consistent with the long-term picture, consistent with Neutral, consistent with long-term growth. Inflation is within a sustainable range of 1-3%.
Moreover, one must be careful not to create various financial imbalances.
such as not causing search-for-yield behavior. These are important issues in considering what the interest rate should be.
which the central bank has always tried to emphasize It is about bringing the situation back to “normal” or normalize as much as possible.
Now it’s close.
And originally called Smooth take off, let it recover smoothly. To grow continuously
Currently, the Bank of Thailand is increasing interest rates gradually.
But lately we have “taken away” that language.
Today the problem has been changed from Smooth take off to Landing, that is, landing smoothly. There were no signs of hitting the ground.
As of today, the governor The BoT said it was close to landing.
That means it is close to the appropriate interest level for the medium-term picture.
Or what we call Neutral, which is suitable for the economic situation.
When asked about the implementation of monetary policy of Will the BoT conflict with the new government’s economic stimulus policy? Dr. Setthaput said that making various policies We must take into account what the overall economic situation will be like.
But when the BoT thinks that it must take care of long-term inflation Therefore, it must be taken into account that there will be additional government expenditures that will come into the economy.
This makes the BoT confident that when looking ahead Inflation will also increase from the fiscal policy that will be issued.
“Our (BoT) problem is what are its various duties? It is in the law that three aspects of stability must be looked at: price stability; Stability of the financial institution system and stability of the payment system Regarding taking care of these things, you must follow the framework.
Dr. Setthaput said that “Having financial stability, I think, is a good thing. It is an economic necessity. And I would like to emphasize that our home interest rates are not like other places. We use the word neutral. We have to see if it is consistent with our long-term picture or not.”
He explained that in the past BoT tries to step on the accelerator a lot during Covid. Pedal rather hard because interest rates are very low.
But now pull off the accelerator. But not yet to step on the brakes.
Because if you step on the brake Interest rates will go up even more. It must be similar to what is seen abroad. which rises above the neutral level
Because he wants to slow down the economy to keep inflation down
The difference is because the inflation in those countries comes from the demand side. But in our country, inflation does not come primarily from demand. But it comes mostly from the supply side.
“It is therefore our duty to take care of the overall inflation picture. Do not let long-term inflation expectations begin to slip,” Dr. Setthaput stated.
(Tomorrow: What will the BoT warn the government about?)
2023-09-17 17:03:14
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