Need to ensure that the financial system continues to function well to perform its intermediary role and continue to provide support the recovery. a. Thailand is a bank-based economy and banks are currently in good shape as reflected by their robust capital positions and high liquidity. SME credit growth is also positive while NPL ratios are low near pre-pandemic levels as a result of the financial measures implemented since the pandemic. We wish to see this momentum going forward. • SME credit growth has become positive since Q2/21. Current Q2/22 credit growth = 0.9%  b. We actively assess if further action is needed to ensure the functioning of the financial system as we are phasing out some “all-in” broad-based measures while focusing on targeted measures. Financial measures that are left in place for too long while they are no longer warranted by the economic situation may lead to moral hazard behavior, which will result in the build-up of inefficiencies and distortions in the financial system. We need to make sure that inflation does not derail growth and the financial system remains healthy and acts as a lubricant to keep the economy taking off smoothly. Part 2: How do we get there? Guidelines for our policy normalization • A holistic and integrated approach towards both monetary and financial policy normalization. Just as we required concerted effort of all policies and financial measures to get us through this crisis, the unwinding and recalibrating of both monetary policy and financial measures must be done in unison.
The national payment system is the backbone of a country’s monetary and financial system and it plays a critical role in a country’s economic development. It is through the payment system that money is transferred between savers and lenders, buyers and sellers or from one point to another. Developing a national payment system is an ongoing process. By reforming and developing the national payment system, it is possible to reduce the overall transaction costs and expand opportunities for commercial and financial transactions in an economy. In recent years, there has been a rapid acceleration in fundamental reforms to national payment systems worldwide, although the pace of implementation of reforms in different countries has been uneven. Planned outcomes have not always been achieved in terms of expected use, benefits or costs of payment system reform projects and many planned reforms have been unexpectedly slow to complete. In its modernization programme which commenced in 2001, the Central Bank refocused on its core objectives, i.e. the economic and price stability and the financial system stability. The financial system stability objective encompasses a wide range of subjects of which, the establishment of a safe and sound payment system was seen crucial for the development of the financial sector, which is also complementary to the maintenance of price stability. In this context, the Central Bank examined the adequacy and the efficiency of the payment system to satisfy the needs of an evolving economy and decided to undertake comprehensive payment reforms.