Inflation, on the other hand, continues its downtrend in May, and although we see inflation numbers turning negative, the current uptick in commodities and asset prices, together with signs of greater stabilization in the real sector, help lessen the concern regarding deflation risk. Against this background, the Monetary Policy Committee in its meeting on May 20th held the view that monetary policy has been substantially eased and the current policy rate at 1.25 percent remains supportive of the economy. Two implications must be drawn from this decision. First, given the low policy rate and the ample availability of liquidity, more gains could be made by ensuring that, at the current policy rate, the benefits of past rate reductions are passed on more fully to consumers and the private sector through corresponding adjustments in the banking system’s interest rates. The second implication is that, while the  BIS Review 76/2009  1  emerging signs of stabilization are positive and are consistent with the developments on a worldwide basis, they must be treated with caution given that the current state of the global economy and financial markets are still far from normal. Hence, the MPC will continue to monitor closely the uncertainty surrounding both domestic and external economic conditions, and stand ready to implement appropriate monetary policy to support economic recovery in the period ahead. Turning now to the banking sector. The Thai banking sector was able to weather the impact of the global financial crisis with a relatively strong initial position.
Opening remarks at OeNB monetary policy panel by Andrew Bailey Given at Oesterreichische Nationalbank, Annual Economic Conference, Vienna  Published on 23 May 2022  Remarks This is a time of very large economic shocks, and particularly very large external shocks, most recently from Russia’s invasion of Ukraine. I say that as someone who wholeheartedly supports the cause of Ukraine and the assistance we must give. We are in a period of rapidly rising energy, goods and some food prices. These are the most visible prices too. This is by far the main cause of high inflation, and is painful, particularly for those less well off. What can and should monetary policy do? There is a very important distinction between: whether monetary policy can anticipate and stop the effects on inflation of shocks; and, if not, whether it should respond when they happen? With shocks such as pandemics and wars, the answer to the first question is more likely to be “no”. But the answer to the second is very much “yes, monetary policymakers can and must take the actions needed to return inflation to target over a period that avoids unnecessary volatility in the economy”. It is domestic actions that have to get us back to price stability. For monetary policy, the choice of policy actions is influenced by the nature of the shock we are facing. In the UK we are facing a very big negative impact on real incomes caused by the rise in prices of things we import, notably energy.