will complement structural reforms in the real sector to bring about strong foundations for further economic growth and stability. structural reforms in the real sector continue to need concerted efforts from both the private and public sectors as well as support from foreign investors like all of you here. the bot is committed to doing all the necessary work for a strong financial sector that will provide a supportive environment and infrastructure for the private sector to prosper. ladies and gentlemen, the essence of my talk today is to reassure you that the performance of the thai economy has been satisfactory and that, despite the adverse environment and challenges facing the thai economy, i strongly believe that the thai economy will be able to continue to perform favorably while moving forward. we are strongly committed to implementing the most appropriate policies to help foster growth, stability and resiliency of the economy and to further strengthen its solid foundation. in closing, i would like to express my appreciation to japanese businesses for their contribution to the progress of the thai economy over the years. here's hoping that we continue to build and strengthen the foundation of this great relationship. again, i am deeply grateful for this opportunity, and thank you for your kind attention.

##g of 4 - 8 quarters before a change in the policy rate can be fully transmitted to the rest of the economy, policy consideration needs to be forward - looking. upward inflationary pressure over the past few years, due to higher oil prices, has been tamed by monetary tightening. we raised the policy rate 13 times between august 2004 and june 2006, bringing the policy rate to 5. 00 percent from 1. 25 percent per annum. hikes in the policy rate have brought the money market and commercial bank interest rates higher over the past 2 years. our policy response proved timely, with inflation and its second round effects well contained. recently, domestic demand, particularly in private consumption and investment, showed signs of a slowdown, while economic momentum from exports was expected to moderate, given the prospects of the global economy in 2007. since inflationary pressures have subsided in line with easing energy prices, monetary policy could be eased in support of a further expansion of the economy. the mpc, thus, lowered the 1 - day repurchase rate, the policy rate, to 4. 75 on 17 january meeting and a further 25 basis points reduction on 28 february and expect to pursue a downward path of interest rate in a cautious manner. this accommodative monetary policy stance will help stimulate domestic demand by supporting economic sentiments, cutting down financial costs and preparing the stage for private investment recovery once confidence has returned, most likely in the 2nd half of this year. having considered the recent economic conditions and monetary policy, we will now turn to the prospects and challenges of the thai economy as we move forward, and how we are going to deal with them. ladies and gentlemen, for this year, we expect the economy to continue facing a number of important challenges both internally and externally. internally, political uncertainties, which have adversely affected private sector's decision to invest, are likely to stay until the next general election. externally, the threat of an impending global imbalance remains high, while the global economy is expected to slow down. moreover, the risk from volatile global financial markets lingers, while the baht could continue to appreciate against the us dollar. it may be a great concern to you whether the thai economy will be resilient enough to withstand such an adverse environment. however, we believe that sound fundamentals and the appropriate policy stance would prepare the economy well in the long term. facing internal challenges, the monetary policy stance has become more accommodative as mentioned earlier