We started off this year with heightened volatility in the global financial markets, mainly due to concerns over the China’s economic slowdown, declining oil and commodity prices and monetary policy divergence among major central banks. Lately, the global volatility has subsided as the Chinese government has shown a strong commitment to limiting the possibility of hard landing with additional fiscal and credit stimulus while restructuring the economy. Commodity prices have also begun to edge higher. Financial market participants expect monetary policy in major countries to remain highly accommodative, despite an increased possibility of another rate hike by the US Federal Reserve in the next few months. While relative calm has returned to the global financial markets, I must stress that the global financial environment remains fragile. Development on China’s economic restructuring and concerns over its corporate debt, the possibility of Brexit, and major central banks’ policy divergence are among the most significant factors that can trigger new bouts of volatility. Investors’ sensitivity to unexpected news and events could also amplify the volatility. Amid the fragile global financial climate, the Thai financial markets have been relatively resilient compared to those of other emerging markets, thanks to Thailand’s strong external position. Current account position last year registered a surplus of 9 percent of GDP, and is projected to remain at that level in 2016. Our international reserves have been at a healthy level, standing at around three times of the short-term external debt and 1.3 times of the total external debt.
Veerathai Santiprabhob: Monetary and financial sector policy – moving forward Speech by Dr Veerathai Santiprabhob, Governor of the Bank of Thailand, at the Foreign Correspondents’ Club of Thailand (FCCT), Bangkok, 1 June 2016. *  *  *  Members of the FCCT Executive Committee, Distinguished guests, Ladies and gentlemen, Good evening to you all, It is my pleasure to be here with you tonight. Although this is my first time speaking at the FCCT, I can feel the vibes of active journalism, which underpins the club’s foundation and its long history in the community of journalists in Thailand. As one of the oldest press clubs in Southeast Asia, I would like to thank you for your continued commitment and contribution to the Thai economy and the Thai society. Public perception and expectation indeed play a large part in establishing credibility and effectiveness of economic policy. As public opinion influencers, journalists greatly contribute to achieving desired policy outcome. As we progress half way through the year, today I would like to share with you the Monetary Policy Committee’s latest economic assessment and monetary policy stance to support the current economic recovery and safeguard stability of the Thai financial system. After that, I will turn to the Bank of Thailand’s financial sector development policy, with a view to facilitating Thailand’s economic transition towards strong, sustainable and inclusive growth. Let me start by talking about recent developments in the global financial markets.