News Brief: IMF Welcomes Thailand’s Exchange Rate Action
IMF News, July 2, 1997
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- Published: July 2, 1997
Exchange rate policy change
- Effective July 2, 1997, "Thailand’s exchange rate system has been changed ... to a managed float, with the value of the baht being determined by market forces in line with economic fundamentals."
- Objective: align the baht’s value with market forces and economic fundamentals to address recent developments.
Monetary policy action
- Bank of Thailand has raised the Bank Rate from 10.5 percent to 12.5 percent.
- Purpose: to support the new exchange rate policy.
Complementary measures and considerations
- Thai authorities are "considering supplementary measures to alleviate potential negative effects on debt servicing and prices that may result from adjustments in the value of the baht."
- Measures are intended to mitigate adverse impacts on debt servicing and price stability stemming from exchange rate adjustments.
Fiscal, financial, and technical assistance
- Actions are "in conjunction with the recent measures in the financial sector, and the previously announced strengthening of fiscal policy."
- IMF assessment: the Fund "welcomes today’s important steps aimed at addressing Thailand’s present economic difficulties and adopting a comprehensive strategy to ensure macroeconomic adjustment and financial stability."
- The Thai authorities have requested technical assistance from the IMF for implementation, and "the IMF will be responding rapidly to these requests."
Source: News Brief: IMF Welcomes Thailand’s Exchange Rate Action — July 2, 1997, IMF External Relations Department.