now that any further tapering by the fed will likely be done in an incremental manner. this is, however, not to say that short - term volatilities are no longer with us. the challenges going forward for policymakers are, therefore, not only to have the right set of policy responses in place to deal with these short - term volatilities, but also to make sure that all the market participants are well prepared for the scenarios that could be expected. 5. besides dealing with short - term volatilities, another related challenge that has come with the reality of qe tapering is maintaining strong economic outlook. specifically, recent data seem to suggest that signs of economic softness that are reflected in, for instance, deteriorations in the current account performance and weak public finances, are likely to amplify the probability of abrupt flow reversals. that is, the remaining pool of funds seems to differentiate between their investment destinations based more on fundamentals, as is exemplified in the recent episodes of substantial outflows in some of the “ fragile five ” countries. bis central bankers ’ speeches 6. when looked at from this fundamentals perspective, thailand ’ s recent economic slowdown and political setback definitely come to mind as another growing concern. particularly, manufacturing production and private spending have already shown signs of moderation in the midst of political uncertainty and poor economic outlook. this, combined with the likely additional delay in public spending, could have further dampening effects on growth. moreover, should the current political situation persist, prolonged political instability will certainly have dire consequences firstly on the tourism industry but also eventually on our ability to maintain and attract the fdi flows. the country ’ s higher credit default swap, if left unchecked, could lead to higher funding costs in the financial markets and certainly constitutes another challenge going forward. i do hope, however, that political uncertainty will be a short - term factor and that political stability will be achieved again once agreements are reached among the different groups in the society. 7. in the meantime, the bank of thailand has been keeping a close eye on the economy as well as any sign of excessive turbulence in the financial markets, and stands ready to take appropriate actions as warranted. in response to the weakening economic conditions, the mpc has cut the policy rate by 25 basis points at its november meeting to shore up sentiments and mitigate downside risks. the rate was further maintained in the last mpc meeting to retain the

accommodative stance without compromising financial stability. 8. with that said, preparation on the side of the private sector is equally important. in this regard, i would like to encourage commercial banks to help raise the private sector ’ s awareness and encourage the use of the available financial instruments to manage their fx risks. i wish to point out that in these uncertain times where outcomes are driven as much by expectations as by the underlying fundamentals, protection against the fx risks should be viewed as the dominant strategy. that is, protection should be recommended irrespective of whether there is any observable trend of the currency and irrespective of whether one is on the importing or exporting side of the trade. also, if your clients are engaged in intra - regional trade, recommending using a regional currency to reduce overreliance on the major currencies may be worth considerations. 9. ladies and gentlemen, i would like to touch upon two more important developments in the thai financial markets before concluding. the first of these is the launch of the code of conduct for fx dealers by the end of this quarter. on behalf of the bank, i would like to thank everyone involved, especially the aci, for your considerations and suggestions that have made this long - term project a feasible one. i hope that the code of conduct will help guide fair and ethical market practices and increase confidence among the market participants for many years to come. 10. another development is in the area of market reference rate reform. the transaction - based valuations to the benchmark calculations for the thai baht implied interest rates ( thbfix ) will be introduced in the second half of this year, in place of the current survey - based model. the change is in line with the approach adopted by many other countries to reduce the risk of rate manipulation that has become the subject of vast discussions over the past few years. with these reform efforts underway, i hope the thai financial markets will continue to inspire confidence among the market participants and allow us to move through these uncertain times with minimum disruptions. 11. ladies and gentlemen, without further delay, let me conclude by congratulating the winners of the fx awards once again. i would also like to reiterate my thanks to thomson reuters for the invitation as well as for your continuing support as an important facilitator and information provider in the thai financial markets. with several factors both internal and external having materialized over the last several weeks,