Despite lower uncertainties, volatility will remain: BOT
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The Bank of Thailand's Monetary Policy Committee and the Financial Institutions Policy Committee viewed that the US Federal Reserve's decision reduces uncertainties in the financial market but volatility will remain.
The Fed would in January start to reduce its bond-buying programme.
As foreign capital flees Thailand, the Thai baht weakened to 32.45 in early trade today, which is more than 1 per cent lower than the closing at the end of November.
In the second meeting of this year taking place yesterday, they viewed that Thailand's financial risks have been lower than in the previous months, with declines in household debt, property sales and loan extension. Yet, economic risks are on the downside, with lower-than-expected private and public spending and limited export recovery. Moreover, political chaos also dent investor confidence. Though corporate finances remain in good shape, but due to economic deterioration, their earning tend to drop particularly among small and medium-sized enterprises.
While saying that the banking sector remains in good health, they viewed that political instability and capital flow-driven volatility will be the two key factors to affect the economic and financial stability.
