In this learning object, you will take on the role of the Governor of the Bank of Thailand(BOT), the country's Central Bank.
There are two activities in the learning object.
According to the BOT Act, the central bank is required to among other commitments, to promote monetary stability and formulate monetary policies. The BOT implements monetary policy as specified by the Monetary Policy Committee:
Note: You will also be given interactive diagrams. Accompanying instructions can be found in the respective write ups.
We use the domestic money market and foreign exchange market to demonstrate the workings of monetary policy and exchange rate policy.
We visualize the interdependence between the domestic money market, the foreign exchange market and its effects on the macroeconomic variables (namely value of the currency, quantity of money, interest rates and Gross Domestic Product).
Learning outcome: At the end of this activity, you should be able to:
explain how central bank can manipulate the exchange rates through two methods :
Then we simulate this experiment for Thailand in the periods between 1990 to 1998.
Simulating the exchange rate crisis in Thailand to identify the macroeconomic challenges, as well as policy responses and tensions faced by the BOT over the periods 1990 - 1998.
Learning Outcome: At the end of this activity, you should be able to: