![]() ![]() The MPC, comprising three BOT executives and four external committee members, are responsible for making monetary policy decision. Moreover, the range inflation target enhances the flexibility in monetary policy formulation amid highly volatile and uncertain global economic circumstances after the COVID-19 outbreak, while allowing the MPC to fulfill economic growth and financial stability objectives more effectively. This range target, while being conducive to full-potential economic growth, is deemed an appropriate level consistent with changing inflation dynamics driven mainly by technological advancements and the aging society. Currently, the Cabinet has approved headline inflation within the range of 1-3 percent as the medium-term monetary policy target as well as the target for 2021. The MPC have to seek a mutual agreement on the annual monetary policy target with the Finance Minister, who will then forward the agreed target to the Cabinet for official approval. The MPC aim to strike an appropriate balance between each monetary policy objective, and stand ready to employ available monetary policy tools to ensure price stability, stable and sustainable economic growth while preventing risks to financial stability. The MPC has conducted monetary policy under a flexible inflation targeting framework, putting emphasis on achieving price stability alongside preserving economic growth and financial stability. These, in turn, enhance its credibility, a vital element for the success of monetary policy implementation. A mission to maintain an inflation rate within the predetermined target range contributes to the clarity, transparency and accountability of monetary policy. Under this framework, the Monetary Policy Committee (MPC), which are responsible for making monetary policy decision, put emphasis on maintaining price stability through the setting of explicit inflation target alongside preserving economic growth and financial stability. The Bank of Thailand (BoT) has since 2000 implemented monetary policy under the Flexible Inflation Targeting Framework, a popular regime adopted by many central banks all over the world. The core mandate of every central bank is to decide and implement monetary policy, with the ultimate objective to preserve overall economic stability so as to support the economy to grow sustainably at its full potential in the long term.
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