is only a temporary hiccup in thailand ’ s long record of investment - friendly climate and rapid industrial development. it can be seen as part of a growing pain that developing countries such as thailand experienced as it becomes more developed. on the positive side, it should provide opportunity to forge a closer coordination among related parties and establish a clear process in achieving sustainability of industrial development. as for the second issue, i think, it is too early at this point to put out an exact estimate of its negative impact on the recovery process. should the problem takes time to resolve itself, the negative impact on the economy will become more visible especially on the tourist industry and private consumption. these, together with the severe drought that we have been experiencing thus far, may somewhat dampen the robust economic momentum that we carry forward from the fourth quarter of last year. ladies and gentlemen, i would like to turn to my last topic : thailand ’ s economic policies going forward, starting with our monetary policy strategies in 2010. in the last few months, we have seen slight upward price movement with both headline and core inflation rates turning positive since the fourth quarter of last year. currently, headline and core inflation for february 2010 are at 3. 7 and 0. 3 per cent respectively. the turnaround was due to a combination of the base effects from oil prices and the pick - up in domestic demand. looking ahead, with the firming economic recovery, inflationary pressure is expected to increase further, with core inflation forecasted to surpass the midpoint of our target range of 0. 5 – 3. 0 percent by the end of the year. thus, it is clear that in the near term, policymakers need to perform a delicate balancing act that would at the same time ensure a continued growth momentum, the anchoring of inflationary expectations, and the containment of potential financial imbalances. in light of the solid fourth - quarter gdp figures and january ’ s economic indicators, the current extraordinary accommodative monetary policy stance will be of less need for the thai economy. furthermore, an over - extended period of low interest rates can lead to heightened inflation expectations or financial imbalances such as asset price bubbles, as this crisis has vividly demonstrated in many countries. to this end, the timing of monetary policy normalization will be important so that it will not jeopardize economic recovery particularly as private investment has yet to pick up enough pace. thus, i would like to assure you that,

relationship and responsibility of home and host supervisors, particularly in information sharing. as a result, host regulator ’ s response became less timely and was bilateral in nature, limited largely to a mixture of ring fencing and coordinated moves that raised the potential for negative externality. this included measures to ensure adequate levels of capital and liquidity for the distressed foreign entities operating in their jurisdictions, or to ensure an orderly unwinding of their local operations in some cases, while maintaining confidence in the overall financial system. and third, while there were significant benefits associated with a closer exchange of information and policy discussion between regulators at the international level and the regional level, the conduct of policy actions that followed was more on a bilateral basis. a case in point was the us dollar swap lines which were available selectively. so, while financial systems in asia were able to successfully weather the impact of the global crisis, recent experience points to an important gap in the coordination of supervisory policies and crisis resolution, both at the international and the regional levels. currently, as we know, efforts to strengthen financial regulation and supervision are being undertaken at all levels. the most important and also the most widely known is the bcbs ’ s reform, which aims to increase the quality, quantity and international consistency and transparency of bank capital, to strengthen liquidity standards, to discourage excessive risk taking, and to improve the overall risk coverage framework. the proposed new international standards, while important, are complex and will pose a critical adoption and implementation challenge. another important point at issue is the proper treatment of macroprudential policies in the context of financial regulation and supervision. the focus on a macro - perspective of systemic risk is definitely important and the use of macroprudential measures is not new in asia, especially in the context of limiting credit and asset price excesses that can have broader financial stability implications. recently, however, macroprudential measures have been used, in combination with monetary policy, to manage the macro - implications of large capital inflows. to this end, while the short - term benefits of macroprudential policies for financial stability purposes are clear, they are no substitute for a proper alignment of macroeconomic policy. the challenge, therefore, is how to appropriately utilise macroprudential policies in the context of managing both economic and financial stability. going forward, therefore, emerging markets asia will have to address these important policy challenges, and the way they go about meeting the challenge will have important implications not only for