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Effective Exchange Rates and Monetary Policy: The Thai Experience

Author

Listed:
  • Piti Disyatat

    (Bank of Thailand)

  • Runchana Pongsaparn

    (Bank of Thailand)

  • Atchana Waiquamdee

    (Bank of Thailand)

Abstract

This paper aims to outline the role that effective exchange rates, both real and nominal, play in Thailand’s monetary policy framework. It discusses some of the applications that effective exchange rates have been applied to in practice, highlighting some of the limitations that often arise. Finally, the paper touches on many of the key issues that have to be considered in determining how exchange rate developments should be taken into account in formulating the appropriate stance of monetary policy. In this regard, some evidence on the importance of exchange rate fluctuations for macroeconomic variables and its role in the monetary transmission mechanism in Thailand are presented.

Suggested Citation

  • Piti Disyatat & Runchana Pongsaparn & Atchana Waiquamdee, 2005. "Effective Exchange Rates and Monetary Policy: The Thai Experience," Working Papers 2005-07, Monetary Policy Group, Bank of Thailand.
    • Handle: RePEc:bth:wpaper:2005-07
    as

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    File URL: http://www.bot.or.th/Thai/EconomicConditions/Publication/DiscusPaper/doclip_discussion/dp042005runchana_thai.pdf
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    References listed on IDEAS

    as
    1. Mr. Peter Isard & Mr. Hamid Faruqee, 1998. "Exchange Rate Assessment: Extension of the Macroeconomic Balance Approach," IMF Occasional Papers 1998/012, International Monetary Fund.
    2. Disyatat, Piti & Vongsinsirikul, Pinnarat, 2003. "Monetary policy and the transmission mechanism in Thailand," Journal of Asian Economics, Elsevier, vol. 14(3), pages 389-418, June.
    3. Ms. G. C. Lim, 2000. "Misalignment and Managed Exchange Rates: An Application to the Thai Baht," IMF Working Papers 2000/063, International Monetary Fund.
    4. Piti Disyatat & Gabriele Galati, 2005. "The effectiveness of foreign exchange intervention in emerging market countries," BIS Papers chapters, in: Bank for International Settlements (ed.), Foreign exchange market intervention in emerging markets: motives, techniques and implications, volume 24, pages 97-113, Bank for International Settlements.
    5. Anotai Buddhari & Varapat Chensavasdijai, 2003. "Inflation dynamics and its implications for monetary policy," Working Papers 2003-05, Monetary Policy Group, Bank of Thailand.
    6. Rebecca L Driver & Peter F Westaway, 2005. "Concepts of equilibrium exchange rates," Bank of England working papers 248, Bank of England.
    7. Michael P. Leahy, 1998. "New summary measures of the foreign exchange value of the dollar," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 84(Oct), pages 811-818, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Manop Udomkerdmongkol & Holger Görg & Oliver Morrissey, 2006. "Foreign Direct Investment And Exchange Rates: A Case Study Of U.S. Fdi In Emerging Market Countries," Discussion Papers 06/05, University of Nottingham, School of Economics.
    2. Ninpanit, Panittra & Malik, Arunima & Wakiyama, Takako & Geschke, Arne & Lenzen, Manfred, 2019. "Thailand’s energy-related carbon dioxide emissions from production-based and consumption-based perspectives," Energy Policy, Elsevier, vol. 133(C).
    3. Bruno Jetin, 2012. "Distribution of income, labour productivity and competitiveness: is the Thai labour regime sustainable?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(4), pages 895-917.

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