One is the distance between the “neutral” nominal rate of interest and the lower bound. This is plotted on the x-axis. The larger this gap (i.e. the further you are to the right) the less the lower bound is likely to matter. There may occasionally be shocks that are bad enough to take you there but they obviously become rarer the more distant the average policy rate from its floor. Maybe you can think of this a reasonable description of the 1990s (when the neutral interest rate was comfortably above zero and “forward guidance” was no more than a twinkle in Michael Woodford’s eye). The second is the scope for this committed (“Odyssean”) form of guidance. QE isn’t available to either of the policymakers in Chart 4. But one, at least, has the capacity to commit credibly to particular policies beyond the current date. The average loss in this case is plotted in blue. The red policymaker can’t do this. He takes the lower bound into account when setting current policy, but, unfettered by any sort of prior commitment, he’s free to reset policy each period as he sees fit. This may sound like a good thing (isn’t it better always to have full discretion?) and there are certainly many instances in which the blue policymaker would prefer to be released from his earlier promise.
Aside from QR codes, we have made a very good progress in terms of PromptPay, which is our electronic payment system and we have seen a very high uptake in usage of PromptPay, especially during the COVID crisis. The number of transactions per person per year increased and reached an all-time high. We have also extended to cross-border payments. We now have in place cross-border payments using QR codes with many of our neighbors such as Cambodia, Vietnam, as well as Japan. Most recently, we have connected our payment system, PromptPay, with that of Singapore, PayNow. This was the first global fast payment linkage and we have also seen a very satisfactory uptake on that front. Another opportunity for us in this area, building upon the digital infrastructure that we put in place, is mobile banking. We have seen a very rapid rise in the usage of mobile banking applications in Thailand. Thai people love their mobile phones and we have seen Thailand ranked number one globally in terms of usage of mobile banking applications for three years in a row. I think this is an example of opportunities that may arise and will come about as a result of putting in place the right kind of digital infrastructure to enable these things to happen. Aside from the initiatives I mentioned on the digital front, another important initiative that we have been undertaking is on CBDC or Central Bank Digital Currency.