Connect with us

Banking

Bank of Thailand: five big challenges in resolving the economic crisis

According to the Bank of Thailand, financial stability of the country is sound while external stability remains strong, with low and manageable levels of public debt, and a flexible labor market.

Boris Sullivan

Published

on

Mr. Sethaput Suthiwartnarueput, Governor of the Bank of Thailand (BOT) revealed in his first meeting with the press, that the public health crisis brought about by COVID-19 has severely impacted global economic activities, including Thailand.

Loading...

The lockdown in Thailand has significantly affected SMEs and households. Foreign tourist arrival is expected at only 6.7 million person in 2020, from around 40 million person last year, accounting for the loss in tourism revenue of 10 percent of GDP.

A patient in intensive care unit

Meanwhile, second quarter export hit the largest contraction in 11 years. The analogy can be drawn to that of a patient in intensive care unit.

To this end, five big challenges for the BOT going forward are to

1) Sustainably solve the debt crisis which will enable households and businesses to weather the COVID-19 crisis,

2) Maintain financial stability to support economic recovery,

3) Maintain macroeconomic stability to ensure that the Thai economic structure can withstand any volatility during the pandemic and beyond,

4) Build public trust and make the BOT to be one of the most trusted public agencies and

5) Improve the efficiency of the BOT’s operation as an outcome-oriented organization and create the sustainability of the Thai economy and society.

The BOT firmly believes that the Thai economy is strong enough to withstand this crisis due to the fact that we have been successful in containing the pandemic of COVID-19.

Mr. Sethaput Suthiwartnarueput, Governor of the Bank of Thailand (BOT)
Mr. Sethaput Suthiwartnarueput, Governor of the Bank of Thailand (BOT)

Moreover, financial stability of the country is sound while external stability remains strong, with low and manageable level of public debt, and flexible labor market.

Move from blanket measures to targeted responses

As Thailand’s contexts have changed, the BOT assessed that the approach to resolving this crisis would need to move from blanket measures that were quickly rolled out to tackle the problems, to measures that are more targeted, comprehensive, and flexible with consideration to possible side effects.

Due to limited resources, the authorities must allocate resources appropriately to fully assist those who are in need.

One example that the BOT has already implemented is the adjustment in the debt moratorium policy launched during lockdown when businesses closed down, and employees worked from home or workers and firms became cash strapped because of declining working hours, to promoting more targeted approach where financial institutions apply debt restructuring appropriately based on debtors’ repayment abilities, analogous to the situation where the doctor choose the treatment for his patients according to their symptoms.

Source : Bank of Thailand

Comments

Asean

12 Things to Know about the ASEAN Catalytic Green Finance Facility (ACGF)

The ACGF is an ASEAN Infrastructure Fund initiative managed by ADB’s Southeast Asia Department Innovation Hub. It helps Southeast Asian governments prepare and finance infrastructure projects promoting environmental sustainability and contributing to climate change goals.

Asian Development Bank

Published

on

Southeast Asia faces an infrastructure investment shortfall of more than $100 billion a year, which may have worsened amid the COVID-19 pandemic.

Loading...
(more…)

Continue Reading

Banking

Thai cabinet approves 350 billion baht Aid for COVID-hit Businesses

Thailand unveiled new measures to help small and medium COVID-hit businesses in the tourism industry hit by a liquidity crunch.

Olivier Languepin

Published

on

The Thai cabinet has approved assistance worth 350 billion baht($11 Billion) to help businesses affected by COVID-19 with soft loans and asset warehousing.

Loading...
(more…)

Continue Reading

Banking

APAC Banks to Face Portfolio Valuation Losses As Yields Rise

The latest data suggest that Fitch-rated banks in Hong Kong, India, Indonesia, Malaysia and Taiwan have the largest AFS securities portfolios, and display particular sensitivity to changes in yields.

Avatar

Published

on

Fitch Ratings-Hong Kong/Singapore-21 March 2021: A rise in yields for long-dated sovereign bonds will result in near-term losses for Asia-Pacific (APAC) banks as they recognise valuation changes on their available-for-sale (AFS) bond portfolios, but the capital impact should be manageable for most rated banks, says Fitch Ratings.

Loading...
(more…)

Continue Reading

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,965 other subscribers

Latest

Trending