Thailand
Thailand Economics
Monetary Policy by Royal Decree? | Monetary Policy by Royal Decree? |
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| Friday, 22 August 2008 | |
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The Bank of Thailand and its embattled governor Tarisa Watangase received a vote of royal confidence this week following comments by King Bhumibol Adulyadej. The King's involvement in Thailand's monetary policy while striking some observes as unusual, no doubt comes as welcome support to Tarisa. Applauding the Bank's "hard and tiring monetary work," the King cautioned the country was "almost facing calamity because we're not careful with our spending." The King's criticism of PM Samak's spending policy came as a sharp rebuke. The King's comments coupled with the Palace's foot dragging on approving finance ministry appointees, appears to have given the Bank of Thailand significantly more leeway to consider hiking rates at next week's policy meeting. The King's support may also alleviate growing investor uneasiness over what is a perceived lack of BoT independence. Although ignoring Thailand's peculiar political nature for a moment, the King's involvement does little to reassure the Bank's ability to act as a robust and neutral player. The danger is that the source of meddling simply shifts from Samak's hand to a new master. |
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