Monetary policy has less room to maneuver amid historical low interest rates

 

 

With Thailand’s interest rates hitting a historical low, monetary policy has less room to maneuver, even though the Thai baht has risen beyond its fundamentals, the Bank of Thailand’s governor said over the weekend.

 

The Bank of Thailand governor Veerathai Santiprabhob said that, hence, the private sector should brace for more challenges in managing their foreign exchange risks next year because the currencies will continue to fluctuate due to geopolitical factors.

 

He said none can predict the direction of the Thai currency because it can go either way, driven by external factors that have constantly affected the capital and financial markets. Thailand’s Monetary Policy Committee on November 6 cut the policy rate to 1.25 percent, a historical low rate since the global financial crisis in 2008 to 2009.

 

Full story: https://www.thaipbsworld.com/monetary-policy-has-less-room-to-maneuver-amid-historical-low-interest-rates/

 

-- © Copyright Thai PBS 2019-11-25

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2 hours ago, webfact said:

The Bank of Thailand governor Veerathai Santiprabhob said that, hence, the private sector should brace for more challenges in managing their foreign exchange risks next year because the currencies will continue to fluctuate due to geopolitical factors

Translation, 2020 already looks bad with no end of sight to exporter woes

Excuse me, but I believe they can do four or five more interest rate cuts before reaching zero.  Or, just hold off on the hot money foreign inflows for a while.

On the other hand, maybe they actually want the economy to crash...

3 hours ago, Isaan sailor said:

 

On the other hand, maybe they actually want the economy to crash...

seems like an odd thing for a central bank to want. 

Beware to lower the interest rate as a cheaper Baht might hurt some people.....

4 hours ago, Isaan sailor said:

Excuse me, but I believe they can do four or five more interest rate cuts before reaching zero.  Or, just hold off on the hot money foreign inflows for a while.

On the other hand, maybe they actually want the economy to crash...

I don't think they want the economy to crash, but they seem reluctant to do what is necessary to lower the value of the baht.

The banksters call it laissez faire economics when it suits their purposes.

 

 

33 minutes ago, TooPoopedToPop said:

I don't think they want the economy to crash, but they seem reluctant to do what is necessary to lower the value of the baht.

The banksters call it laissez faire economics when it suits their purposes.

 

 

Why do they need to lower the value of the Baht?  Tourism numbers are strong, unemployment is incredibly low, the economy is growing at over 2% per annum.  If the need is for more personal reasons (as I suspect to be the case for most doom and gloomers here), then that's another story of course.

As an engineer, I am familiar with control systems, open loop, closed loop, stability etc.  I am convinced there can not be any sort of stable closed loop economic system.  Things will rise and fall and cycle, and now and then absolutely go haywire.  Literally nothing more than controlled chaos, or relative stability for some amount of time.

53 minutes ago, TooPoopedToPop said:

I don't think they want the economy to crash,

It's possible but they do everything to make it happen