BOT focuses on pre-emptive moves to mitigate Covid-19 impact on economy

[rooster59]

BOT focuses on pre-emptive moves to mitigate Covid-19 impact on economy

By THE NATION

 

 

Pre-emptive measures will be launched in three areas to prop the economy up, it was decided at a meeting of the Bank of Thailand (BOT)'s Monetary Policy Committee and the Financial Institutions Policy Committee.

 

 

At the year's first biannual meeting on July 7 of the two committees, “The meeting focused on detailed scenario analysis of the Covid-19 crisis and its impact on the Thai economy, as well as the risk of business’ credit rating being downgraded due to the economic recession,” said the report.

 

“Amidst the current situation with high uncertainty, both committees have agreed on implementation of pre-emptive measures in three aspects as follows:

 

"First is the evaluation of financial aid measures for household, business and financial market sectors to make sure that deployed measures are effective in increasing liquidity of target groups, as well as ensuring that when the measures end the borrowers can still be able to pay back the loan. These measures also include soft loans provided by financial institutions and Thai Credit Guarantee Corporation to small and medium enterprises.

 

"As for the liquidity of financial markets, the BOT has been working with the Securities and Exchange Commission to evaluate the risk of mutual funds and bond markets as well as establish the Mutual Fund Liquidity Facility and Corporate Bond Stabilisation Fund to promote confidence among investors and ensure uninterrupted fund-raising process amid the uncertainty of the Covid-19 situation.

 

"Secondly, provide proactive debt restructuring measures that suit the debt situation of each group, such as businesses that temporarily lack liquidity but will still be able to rehabilitate when the Covid-19 situation improves, and those that require total overhaul in business operations to maintain competitiveness. These measures must also conform to the ability to pay back debts of borrowers in the post-Covid-19 era, which is expected to be significantly lower.

 

"Thirdly, to continue to provide measures that help strengthen the country’s financial system and promote a careful risk management practice to mitigate the impact of economic contraction and fluctuation in financial markets. Since the start of the Covid-19 crisis, the BOT had suggested that financial institutions including commercial banks, save cooperatives, insurance businesses and mutual fund operators to keep their reserve fund high to be a buffer in case of a financial crisis.

 

“These measures are important in preventing the crisis from further weakening the Thai economy and help all sectors get back on their feet when the Covid-19 situation resolves,” said the central bank.

 

“They will also help guide entrepreneurs who need to adjust their administration and business operation to suit the new normal standard in financial economics and the changing financial structure.”

 

Source: https://www.nationthailand.com/news/30391117

 

-- © Copyright The Nation Thailand 2020-07-11

 

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[smedly]

2 hours ago, rooster59 said:

the BOT had suggested that financial institutions including commercial banks, save cooperatives, insurance businesses and mutual fund operators to keep their reserve fund high to be a buffer in case of a financial crisis

is a crisis now expected - someone seems to think it is possible 

[Brunolem]

The problem is that millions of Thai people work, or worked, outside companies and corporations...small farmers, street vendors, workers on construction sites, guides and so on.

 

These bureaucratic measures won't do anything for them.

 

These same people, most of whom have been surviving on the 5,000 baht scheme until now, usually carry a lot of debt (credits on cars, motorbikes...) that they will soon not be able to serve.

 

This is where a crisis can be expected...

[Trillian]

Think of a large well armed force that enters enemy territory for the first time and the OIC tells his men to stay alert and be extra vigilante, even though there's no sign of the enemy.....same thing.

[RichardColeman]

3 hours ago, rooster59 said:

At the year's first biannual meeting on July 7 of the two committees

Huh ? Seems bit daft to have more than one biannual meeting to me, may as well move to once a year 

[Scot123]

3 hours ago, Trillian said:

Think of a large well armed force that enters enemy territory for the first time and the OIC tells his men to stay alert and be extra vigilante, even though there's no sign of the enemy.....same thing.

You do have experience of living in Thailand dont you? On a whole the Thai psyche is reactionary and not known for being preemptive.  

[Leaver]

3 hours ago, Brunolem said:

The problem is that millions of Thai people work, or worked, outside companies and corporations...small farmers, street vendors, workers on construction sites, guides and so on.

 

These bureaucratic measures won't do anything for them.

 

These same people, most of whom have been surviving on the 5,000 baht scheme until now, usually carry a lot of debt (credits on cars, motorbikes...) that they will soon not be able to serve.

 

This is where a crisis can be expected...

A lot of Thai's have sold the family's silverware to stay afloat. 

 

It's obvious to them now that they will be unemployed for quite some time, and if they were working in the tourism industry, unemployed for the foreseeable future.

 

I expect to see default rates skyrocket in the next quarter.  

[Trillian]

32 minutes ago, Scot123 said:

You do have experience of living in Thailand dont you? On a whole the Thai psyche is reactionary and not known for being preemptive.  

What nonsense, that's just an excuse to Thai bash.

[Leaver]

40 minutes ago, Trillian said:

What nonsense, that's just an excuse to Thai bash.

Not really. 

 

The old style Thai culture of the elder person is always right does not foster an innovative society. 

 

A smart young Thai can not cause the loss of face of an older Thai by doing something better than them, or changing a long standing system, or even suggesting a better method of achieving a goal. 

 

Instead, young smart Thai's have to wait until they are older and in senior positions to implement what they want, and by then, the rest of the world is way ahead, and the cycle continues.  

 

For many Thai organisations, It's basically "top down thinking."  This is unfortunate, because they do not get the full benefit of the company's skill base, and fresh ideas.      

 

In 2020, there's some well educated, innovative, young Thai's out there, but many are being held back by centuries old Thai culture.  

 

Edited July 11, 2020 by Leaver

[Trillian]

15 minutes ago, Leaver said:

Not really. 

 

The old style Thai culture of the elder person is always right does not foster an innovative society. 

 

A smart young Thai can't not cause the loss of face of an older Thai by doing something better than them, or changing a long standing system, or even suggesting a better method of achieving a goal. 

 

Instead, young smart Thai's have to wait until they are older and in senior positions to implement what they want, and by then, the rest of the world is way ahead, and the cycle continues.  

 

For many Thai organisations, It's basically "top down thinking."  This is unfortunate, because they do not get the full benefit of the company's skill base, and fresh ideas.      

 

In 2020, there's some well educated, innovative, young Thai's out there, but many are being held back by centuries old Thai culture.   

Yes agreed to a certain degree but that was not the point that was made, which was Thai's are not known for being preemptive (not necessarily innovative), that's nonsense.

 

Immigration Dept. is certainly preemptive which is why a certain segment of expat population has had increasing problems getting visa's for the past couple of years. And BOT is certainly preemptive, that's their job, to avoid problems before problems hit.

 

 

 

[Leaver]

1 hour ago, Trillian said:

Yes agreed to a certain degree but that was not the point that was made, which was Thai's are not known for being preemptive (not necessarily innovative), that's nonsense.

 

Immigration Dept. is certainly preemptive which is why a certain segment of expat population has had increasing problems getting visa's for the past couple of years. And BOT is certainly preemptive, that's their job, to avoid problems before problems hit.

 

 

 

The Immigration Department is a public service department, with ultimate power over immigrants, not Thai citizens.  That's not really a good example. 

 

The BOT is a better example, but I have known the BOT to follow the lead of others, rather than take the lead.  

 

I was commenting in a broad and general sense, with a focus on the private sector. 

 

Yes, a little bit of stereo typing, but it is entrenched in Thai society, and in my opinion, does hold back back the progress of the country, as a whole, to some degree.   

 

Edited July 11, 2020 by Leaver

[Trillian]

8 hours ago, Leaver said:

The Immigration Department is a public service department, with ultimate power over immigrants, not Thai citizens.  That's not really a good example. 

 

The BOT is a better example, but I have known the BOT to follow the lead of others, rather than take the lead.  

 

I was commenting in a broad and general sense, with a focus on the private sector. 

 

Yes, a little bit of stereo typing, but it is entrenched in Thai society, and in my opinion, does hold back back the progress of the country, as a whole, to some degree.   

 

Immigration is a division of The Royal Thai Police.

[Trillian]

Oh look, the creche has opened and the emoticon clickers are at play! Sad.

[Leaver]

On 7/12/2020 at 4:04 AM, Trillian said:

Immigration is a division of The Royal Thai Police.

Is The Royal Thai Police not a public service department????