The Bank of Thailand supervises its foreign currency reserve management operations via the following procedures:
Through the designated Risk Management Committee, Financial Risk Management Sub-Committee, and Investment Sub-Committee, the Bank of Thailand (BOT) diligently conducts its foreign currency reserves management operations to support its monetary and foreign exchange policy, ensure the country's financial stability, and support bond issuances.
The Risk Management Committee (RMC) determines the overall risk management policy and framework for BOT, which covers designating an acceptable level of risk-taking and ensuring adequate risk management processes. Furthermore, RMC considers proposals related to financial risk management as submitted by the relevant sub-committees.
The Financial Risk Management Sub-Committee (FRMC) examines and filters proposals related to risk management policy and framework before their submissions to RMC. Topics under deliberations may involve risk management practices, foreign currency reserve management policies, investment benchmarks, and scope and tools involved within investment processes. FRMC is also tasked with monitoring and evaluating performances of investment strategies and risk management outcomes related to foreign currency reserve management operations and selecting counterparties which BOT may engage with.
The Investment Sub-Committee (IC) formulates investment strategies in relation to the country's foreign currency reserves within the boundaries of RMC-approved risk management policy and framework. In carrying out its task, IC monitors the world's major economies and the various contemporaneous factors relevant to foreign currency reserve management operations, proposes a Strategic Asset Allocation (SAA) strategy preference, and evaluates potential entries into new asset class, geographical markets, or instruments before submissions to RMC for approvals.