About BOT
Key roles and responsibilities of the Bank of Thailand (BOT) are to facilitate economic and financial system through monetary policy implementation in order to accommodate sustainable economic growth at rates that match the country’s potential. The BOT also aims to help creating favorable economic environment that will promote quality of livings of all Thais in the long run.
The BOT’s key task is to maintain financial stability by keeping inflation and exchange rates at appropriate levels in accordance with economic conditions at any given time. Other tasks include banknote circulation management and supervision of payment system.
Another vital role of the BOT is to supervise, probe, and analyze the performance, financial status, and risk management of financial institutions. The BOT also stipulates the minimum capital adequacy ratio of financial institutions in accordance with the international standard to ensure that they have adequate capital and appropriately set aside provisions to cushion economic and financial risks. Moreover, the BOT determines policies and regulations to ensure stabilities of the financial institutions and payment systems while promoting efficiency of local financial institutions to prepare for stiffer competition amid upcoming financial liberalization. The bank also encourages good governance at financial institutions to boost transparency and ensure that their clients are treated fairly.
The BOT has initiated Financial Sector Master Plan (FSMP), a medium-term development plan for financial institutions under the supervision of the Bank of Thailand that will provide guidelines for local institutions to strengthen their positions and improve their service efficiency and accessibility. At the final stage of the FSMP Phase II (2010-2014), the BOT is pushing for greater competition and efficiency of the sector and will eventually promote new players.
Moreover, the BOT provides banking facilities to the government in terms of depository and lending facilities for the Ministry of Finance and acts as the custodian for the government. It also provides banking facilities for financial institutions and acts as lender of the last resort for cash strapped financial institutions.
The BOT has prepared a strategy roadmap to set medium-term direction over the course of five years. The strategy roadmap aims to pursue sustainable economic well-being through creation of economic balance and stability as well as inclusive and fair growth to cope with fast-changing and more complex economic conditions both domestically and externally.
According to the BOT’s strategy roadmap 2012-2016, its vision is “to be an organization of vision and principles that engages with stakeholders in pursuit of Thailand’s sustainable economic well-being.” Its four core values consist of “Principles, Visions, Collaboration, and Humility.”
The BOT’s mission is “to promote a stable financial environment to achieve sustainable and inclusive economic development.” The ambitious mission can be divided into five categories including price stability, financial stability, payment system stability, banknote excellence, and consumer protection on financial services.
In addition, the BOT also acts as economic and financial data center that provides comprehensive, well-rounded, and credible information to the public. It releases key domestic and international economic indicators as well as provides explanations for any changes and constantly shares views on economic prospect.
To communicate with the public on monetary policy, the BOT releases policy decision after each meeting of the Monetary Policy Committee (MPC). It also provides reasons and factors behind the decision to keep, raise, or cut policy rate as well as the MPC’s view on economic trend and response to queries from reporters to create clear understanding about the BOT’s stance.
Furthermore, the BOT also releases research notes on economic trend that it uses as assumptions for economic forecast and back policy decision. This information would help the private sector make business decision in accordance with the economic condition and the BOT’s monetary policy direction.
The BOT has assumed the role of Thailand’s central bank for over seven decades. According to the BOT’s history, there were serious efforts to set up a central bank since the 1932 revolution but it took another 10 years for a successful establishment due to political instability and scarcity of monetary and banking experts.
Since its commencement date on December 10, 1942, a total of 22 governors of BOT have been appointed. The present governor, Mr. Prasarn Trairatvorakul, has assumed his position since October 1, 2010. There are three deputy governors and 10 assistant governors administrating various work groups at the BOT and their details can be found at the executive directory. The Board of BOT will determine overall policies of the central bank while policies and guidelines of specific issues will be decided by separate committees such as the Monetary Policy Committee (MPC), the Financial Institutions Policy Committee (FIPC), and the Payment Systems Committee (PSC).