Monetary Policy Committee

The Monetary Policy Committee (MPC) is one of the main committees of the Bank of Thailand and is responsible for setting the monetary policy stance.  The MPC works closely with the staff of the Bank of Thailand in monitoring internal and external economic conditions. In formulating the monetary policy direction, MPC makes assessments and policy decisions based upon data provided by the Bank of Thailand.

The Monetary Policy Committee is comprised of 3 internal member and 4 external members, as follows:


 

​


The Monetary Policy Committee under the Bank of Thailand Act B.E. 2485 (1942) 
as amended by the Bank of Thailand Act (No.4) B.E. 2551 (2008)​

The MPC will continue to comprise of 7 members, as in the present arrangement.  The BOT Governor will act as Chairman, given the Governor's responsibility in implementing the MPC's decisions.  The Governor also acts as a linkage with the other policy committees of the BOT.  Two deputy Governors of the BOT and four external members form the remaining membership of the MPC, who aim to provide a balance of views, as intended in the new BOT Act.    External members have a fixed term of 3 years, and cannot serve more than two consecutive terms.

 

Scope of Responsibilities of the MPC

The MPC's scope of responsibilities is clearly spelled out in the BOT Act, as follows:

1.  Setting a target for the country's monetary policy, taking into account the Government's policies and the country's economic and financial environment;

2.  Setting policy for exchange rate management under the exchange rate regime specified under the authority of the Currency Act;

3.  Setting necessary measures in order to achieve the goals as policies as set out in (1.) and (2)

4.  Following up on the BOT's implementation measures as set out in (3) to ensure correctness and efficiency of those measures

In addition, the new BOT Act explicitly states that the MPC shall set a target for the upcoming year on an annual basis, no later than December, which will act as a guide for the government and the BOT in its objective of achieving price stability.  This target shall be reached in agreement with the Minister of Finance, which will then require approval by the Cabinet.  The MPC is required to report monetary policy developments to the Cabinet every 6 months.

 

The impact of the new BOT Act on the public

The public will benefit from the new BOT Act as follows:

1.  The public can be confident that decision-making authority on policy issues is not centralized with the Governor, but conducted through various policy-making committees with a wider pool of knowledge, which should ensure that all issues of concern are taken into account.  External committee members should help bring specialization and diverse viewpoints into the policy making discussion.

2.  The public will more easily be able to monitor the BOT's policy decisions, as the BOT is accountable to the Minister of Finance and the Cabinet through regularly scheduled reporting requirements, as required by law.

Meeting frequency


The MPC meets regularly 8 times a year (approximately every 6 weeks) to assess economic and monetary conditions, as well as other risk factors which effect inflation and economic growth, in order to undertake the appropriate monetary policy decisions.  The MPC secretariat presents for consideration the latest monetary and fiscal data, data about the global economy, and data on domestic production, as well as other factors that are likely to affect the price level.  These factors include world oil prices, monetary policy in other countries, as well as world commodity prices, so that the MPC can assess and discuss projections for inflation going forward. 

Title 
 

Code of Conduct for Members of the Monetary Policy Committee 

  1. MPC members shall act independently in expressing opinion and making decision, upholding the benefits to the overall economy as the ultimate goal. MPC members shall also behave in a manner that builds public confidence that they are independent from political interference.

    2.  

  2. MPC members shall explain the rationale behind the monetary policy decision and related policy measures to the public in order to promote correct public understanding.

    3.  

  3. MPC members shall not abuse information, especially undisclosed information, and resources (including human resources) obtained in the capacity of MPC members to their own or other people's benefit.

    4.  

  4. MPC members shall be cautious not to disclose any information of the MPC or the Bank of Thailand that may have an impact on the money market and shall be cautious not to divulge MPC decision ahead of the appropriate time.

    5.  

  5. MPC members shall not disclose or be involved in disclosing distorted or inaccurate information that may mislead the public.

    6.  

  6. MPC members shall not disclose information regarding pending or on-going issues in MPC meetings.