Foreign holdings of the Thai government and Bank of Thailand bond outstanding are less than 9 percent, compared with more than 30 percent in some other emerging markets in the region. External debt of the corporate sector has been relatively low, and mostly belongs to large companies, which manage their exchange rate risk sufficiently well. BIS central bankers’ speeches  1  While Thailand’s financial strength serves as a buffer against external shocks, it is important that the private sector is not complacent and should continue to be prudent in their financial risk management. Global financial volatility can definitely trigger two-way movements of currencies and asset prices. As a small open economy, Thailand cannot escape, but to find effective ways to live with the global volatility. On the Bank of Thailand’s part, under the flexible exchange rate regime, currency movement serves as the first line of defense against unexpected external events. We continue to be prudent in using an appropriate mix of policy tools to help prevent excessive volatility of the currency and asset prices. In addition, to build market resilience in the longer run, we embrace on financial market developments, as deep and liquid markets would better absorb large swings in capital flows. We also plan to further relax capital flow regulations to allow more balanced flows in and out of the country, which would enhance stability against short-term speculative flows.
In addition, the use of local currency in regional trade and investment has been promoted to lower business transaction costs and mitigate volatility of the major currencies. We hope that policy to strengthen financial connectivity with our neighbors will facilitate closer economic integration for the shared benefits of the region. The second plan is the Payment Systems Roadmap. The plan is aimed to promote safe and efficient electronic payment services with new technologies and innovation, with a view to reducing transaction costs, improving governance standards, and being supportive of expanding economic activities. In particular,  BIS central bankers’ speeches  3  integrated payment channels, such as mobile phones, internet, debit/ credit cards, and emoney along with a competitive fee structure, will support e-Commerce/ m-Commerce and benefit both businesses and consumers alike. The Bank of Thailand will also continue to work with regional regulators to advance payment systems connectivity to support international trades, labor movements, and tourisms. Under this roadmap, the Bank of Thailand has worked closely with the government to advocate the idea of digital economy by taking a lead in the National e-Payment Plan to promote Any ID infrastructure and debit card usage. Development of a new payment infrastructure as the “open architecture” to allow network interoperability among various types of players will lower payment fees and discourage the use of cash, thus resulting in much lower operating costs and higher efficiency for the corporate and banking sectors.