solve this supply bottleneck. it can help foster macroeconomic stability conducive to business investment, but most of the efforts to address supply - side impediments still need to come from a broader and more balanced set of economic policies including fiscal, industrial, technology, and labor market policies. concluding remarks let me end my talk today by saying that, as a central banker, we should be ambitious in making the best use of all available policy tools and in improving our understanding of the economy as well as the shocks driving it. but setting the ambition higher than the capability of monetary policy would likely prove to be counter - productive. it is an old established wisdom that what monetary policy can best deliver is price stability. while we have learned for a great deal about other aspects of macroeconomic stability, there is little disagreement that price stability must remain the central objective of monetary policy in the long run. abandoning this objective risks de - anchoring price expectations and inducing unnecessary economic volatility. the deployment of supplementary tools can go some way to help relax its limitation, but monetary policy is no panacea. ladies and gentlemen, only by understanding both the power and limits of monetary policy, will the economy be able to reap the most benefit out of this policy lever. the bank of thailand will continue to do our utmost to strive for overall macroeconomic stability, and the long - term prosperity of thailand. thank you. bis central bankers ’ speeches

bandid nijathaworn : financial developments and the thai banking sector keynote address by dr bandid nijathaworn, deputy governor of the bank of thailand, at the third euromoney thailand investment forum, bangkok, 10 june 2009. * * * thank you and good morning first let me thank euromoney for the invitation. it is an honour to be speaking to you today. for the last few years that i have been coming to this forum to speak, i find the session to be very useful as it provides an excellent opportunity for us at the bank of thailand to interact and share our views with investors on thailand ’ s current issues, including our policies. so, it is a pleasure to be here this morning. my topic today is about financial developments and the thai banking sector. given the limitations of time, i want to focus my remark today on two issues. the first is the short - term issue about the current economic and financial conditions, and the policy response that we have had in trying to strengthen the process of recovery. next, i will speak on the mediumterm issue of financial sector reform, beginning with how we see the new or the post - crisis financial landscape emerging and our plan to respond to these changes in the context of our financial sector master plan. first, the current conditions. latest economic data in thailand continues to show deterioration in economic activities as evidenced by the estimated decline of 7. 1 percent in this year ’ s first quarter gdp growth. however, most recently, while the overall domestic activities remain weak, more positive signs on the real sector are emerging, especially in the monthly april data that show greater stabilization in the pace of contraction on a month - on - month basis, of exports, manufacturing output, capacity utilization, and private consumption, as well as a narrowing of the trade surplus. on the financial front, recent rally in equity prices is also positive. the rally, which is largely liquidity driven, is indicative of two developments that are taking place in our financial markets at this time : first, the resurgence of capital inflows linked to the return of risk appetite globally ; and second, the search for yield by thai savers, on account of the low nominal deposit rates, which sees savings shifting away from bank deposits to other instruments. hence, the latest round of deposit rates increase by banks can be seen as a response to this development. on liquidity, at this time, liquidity in the thai banking system remains ample