Information about Asia and the Pacific Asia y el Pacífico
Chapter

Appendix II Statistical Appendix

Author(s):
David Robinson, Ranjit Teja, Yangho Byeon, and Wanda Tseng
Published Date:
September 1991
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Information about Asia and the Pacific Asia y el Pacífico
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Table 20.Domestic Expenditure and Product(In billions of baht)
1980198519861987198819891990 Est.
(Percentage change, in 1972 constant prices)
Consumption5.02.93.57.37.99.08.1
Private5.42.04.38.88.810.99.0
Public2.86.90.20.93.5–0.12.9
Fixed investment3.8–5.3–3.815.421.822.026.6
Private–2.6–11.20.529.232.025.623.5
Public18.97.6–11.6–13.1–9.45.943.1
Change in stocks1–0.50.2–0.52.9–1.40.5
Foreign balance11.42.42.50.40.60.9–2.6
Statistical discrepancy1–1.0–0.11.10.4–0.61.2
Gross domestic product4.83.54.99.513.212.010.0
Agriculture1.76.20.3–0.210.26.6–3.8
Industry23.2–0.97.712.717.816.115.9
Manufacturing2.9–0.610.813.316.814.914.3
Services7.05.05.211.211.711.510.7
Source: Data provided by the Thai authorities.

Contribution to GDP growth.

Mining, manufacturing, and construction.

Source: Data provided by the Thai authorities.

Contribution to GDP growth.

Mining, manufacturing, and construction.

Table 21.Investment and Savings
1980198519861987198819891990 Est.
(As percent of GDP)
Gross domestic investment26.424.121.823.928.831.537.8
Private117.515.014.217.723.626.331.0
Public8.99.17.66.25.25.26.8
Gross domestic savings20.919.420.923.728.630.231.4
Private17.916.517.118.019.620.319.9
Households10.68.99.19.410.610.29.3
Businesses7.37.68.18.69.010.110.6
Public3.02.93.85.79.09.911.5
Statistical discrepancy–0.9–0.6–1.50.32.52.32.2
Foreign savings6.44.0–0.60.62.73.68.6
Source: Data provided by the Thai authorities.

Includes change in stocks.

Source: Data provided by the Thai authorities.

Includes change in stocks.

Table 22.Monetary Survey
1980198519861987198819891990
(In billions of baht)
Net foreign assets42.437.980.9107.6145.7247.5307.1
Net domestic assets209.4555.6591.9701.0810.4959.61,222.0
Domestic credit305.8697.8740.7871.21,007.41,207.31,531.9
Public (net)85.1170.5188.0190.4142.784.735.7
Private220.7527.3552.7680.8864.71,122.61,496.2
Other items (net)–96.4–142.2–148.8–170.2–197.0–247.7–309.9
Broad money (M2)251.8593.5672.8808.6956.11,207.11,529.1
Narrow money (M1)71.685.9103.4132.4148.5174.7195.4
Quasi-money180.2507.6569.4676.2807.61,032.41,333.7
(Contributionto broad money growth)
Net foreign assets4.51.87.24.04.010.64.9
Net domestic assets17.98.55.916.211.415.621.7
Domestic credit23.510.07.219.414.220.926.9
Other items (net)–5.6–1.5–1.3–3.2–2.8–5.3–5.2
Broad money (M2)22.510.313.420.215.426.326.7
Narrow money (M1)3.9–0.53.04.31.72.71.7
Quasi-money18.610.910.415.913.723.525.0
Source: Data provided by the Thai authorities.
Source: Data provided by the Thai authorities.
Table 23.Accounts of the Bank of Thailand
1980198519861987198819891990
(In billions of baht)
Net foreign assets55.250.170.7106.1162.4262.6360.5
Assets62.480.098.6130.5179.3269.7360.6
Liabilities7.229.927.924.416.97.10.1
Net domestic assets2.136.425.610.6–28.4–105.9–174.7
Net claims on Government54.798.089.683.632.2–22.0–57.6
Claims on commercial banks16.525.534.742.057.841.634.6
Claims on other financial institutions5.412.814.113.615.016.112.6
Other items (net)1–74.5–101.7–113.8–130.5–135.3–144.1–168.1
Reserve money57.386.596.3116.7134.0156.7185.8
(Contributions to reserve money growth)
Net foreign assets–2.42.123.836.848.274.862.5
Net domestic assets19.46.4–12.5–15.6–33.4–57.8–43.9
Reserve money17.08.511.321.214.816.918.6
Source: Data provided by the Thai authorities.

Includes net currency holdings.

Source: Data provided by the Thai authorities.

Includes net currency holdings.

Table 24.Balance of Payments Developments(In millions of U.S. dollars)
1980198519861987198819891990 Preliminary
Trade balance–2,829–2,219–494–1,633–3,942–5,358–9,773
Exports, f.o.b.6,4487,0778,82911,60915,85719,93822,912
Imports, c.i.f.–9,277–9,296–9,323–13,242–19,799–25,296–32,685
Of which: Oil2,8682,0821,2271,7101,5342,3253,053
Services (net)5445625691,1182,1542,6972,672
Receipts2,1253,1653,3364,1715,9517,0528,643
Payments–1,581–2,603–2,767–3,053–3,797–4,355–5,971
Of which: Interest7281,2331,3361,3741,4351,5071,761
Transfers (net)216166225225236246206
Of which: Official142119161125190199182
Current account balance–2,069–1,491300–290–1,552–2,415–6,895
Nonmonetary capital movements (net)2,5251,5317088082,8485,9328,182
Medium-and long-term capital (net)2,5251,3433216301,2454,2503,400
Private sector1,249357824621,5304,4784,771
Direct investment1871982222299951,6792,084
Public sector11,276986239168–285–228–1,371
Public enterprises928605224–162–56234435
Central government34838115330227–262–1,806
Short-term capital1183871781,6031,6824,782
Errors and omissions2–2081717145112206721,194
Overall balance22732111,7221,0291,5164,1892,481
Monetary movements–273–211–1,722–1,029–1,516–4,189–2,481
Commercial banks (net)–479–469–776243841–3891,576
Monetary authorities1206258–946–1,272–2,357–3,800–4,057
Of which: Net IMF credit–58226–35–11–264–379–275
Source: Data provided by the Thai authorities.

Excludes $300 million borrowed by the Government in late 1985 to be used for refinancing in the first half of 1986.

Includes counterpart to valuation changes in foreign exchange reserves other than gold amounting t o gains of $72 million in 1985, $173 million in 1986, and $368 million in 1987, losses of $58 million in 1988 and $138 million in 1989, and gains of $280 million in 1990.

Source: Data provided by the Thai authorities.

Excludes $300 million borrowed by the Government in late 1985 to be used for refinancing in the first half of 1986.

Includes counterpart to valuation changes in foreign exchange reserves other than gold amounting t o gains of $72 million in 1985, $173 million in 1986, and $368 million in 1987, losses of $58 million in 1988 and $138 million in 1989, and gains of $280 million in 1990.

Table 25.External Debt and Debt Service(In millions of U.S. dollars; end-of-period data)
1980198519861987198819891990 Est.
Total outstanding debt (disbursed)8,48817,38518,17119,86820,91522,70029,209
Outstanding medium-and longterm debt (disbursed)16,30714,15815,28316,90816,16716,75118,621
Public sector4,34810,52812,02313,88313,03511,93511,253
By lender
IMF2(348)(1,122)(1,069)(973)(672)(275)(1)
International institutions(976)(2,979)(3,175)(3,193)(2,889)(2,761)(2,698)
Foreign governments(1,112)(2,595)(3,231)(4,109)(4,073)(3,908)(4,601)
Foreign banks(1,881)(3,470)(4,110)(5,088)(4,933)(4,528)(3,411)
Suppliers’ credits(31)(362)(438)(521)(467)(463)(542)
By borrower
Bank of Thailand(348)(1,122)(1,069)(973)(672)(275)(1)
Central government(1,463)(3,516)(4,292)(5,160)(5,281)(4,940)(3,689)
Public enterprises(2,537)(5,890)(6,662)(7,751)(7,081)(6,720)(7,563)
Nonbank private sector1,7523,3703,1172,8373,0164,6407,368
Loans(1,463)(2,952)(2,731)(2,448)(2,510)(4,104)(6,619)
Suppliers’ credits(289)(418)(386)(389)(506)(536)(749)
Commercial banks3207260143188116176136
Outstanding short-term debt(disbursed)2,1813,2272,8882,9604,7485,94910,452
Public sector60726166256172257
Nonbank private sector8621,8511,8971,7062,2742,9456,248
Commercial banks31,2591,3049301,1882,2182,8323,947
Total debt-service payments1,4442,7472,9683,0803,1943,4273,307
Amortization7411,5141,6221,7071,7581,9201,538
Interest7031,2331,3381,3731,4361,5071,769
Total debt-service ratio416.727.524.819.814.913.010.9
Sources: Data provided by the Thai authorities; and staff estimates.

Debt with maturity of one year or more.

Includes Trust Fund loans.

Gross foreign liabilities of commercial banks.

As a percentage of exports of goods and services.

Sources: Data provided by the Thai authorities; and staff estimates.

Debt with maturity of one year or more.

Includes Trust Fund loans.

Gross foreign liabilities of commercial banks.

As a percentage of exports of goods and services.

Bibliography

Recent Occasional Papers of the International Monetary Fund

85. Thailand: Adjusting to Success—Current Policy Issues, by David Robinson. Yangho Byeon, and Ranjit Teja with Wanda Tseng. 1991.

84. Financial Liberalization, Money Demand, and Monetary Policy in Asian Countries, by Wanda Tseng and Robert Corker. 1991.

83. Economic Reform in Hungary Since 1968, by Anthony R. Boote and Janos Somogyi. 1991.

82. Characteristics of a Successful Exchange Rate System, by Jacob A. Frenkel, Morris Goldstein, and Paul R. Masson. 1991.

81. Currency Convertibility and the Transformation of Centrally Planned Economies, by Joshua E. Greene and Peter Isard. 1991.

80. Domestic Public Debt of Externally Indebted Countries, by Pablo E. Guidotti and Manmohan S. Kumar. 1991.

79. The Mongolian Peopled Republic: Toward a Market Economy, by Elizabeth Milne, John Leimone. Franek Rozwadowski, and Padej Sukachevin. 1991.

78. Exchange Rate Policy in Developing Countries: Some Analytical Issues, by Bijan B. Aghevli, Mohsin S. Khan, and Peter J. Montiel. 1991.

77. Determinants and Systemic Consequences of International Capital Flows, by Morris Goldstein, Donald J. Mathieson, David Folkerts-Landau, Timothy Lane, J. Saul Lizondo, and Liliana Rojas-Suärez. 1991.

76. China: Economic Reform and Macroeconomic Management, by Mario Blejer, David Burton. Steven Dunaway, and Gyorgy Szapary. 1991.

75. German Unification: Economic Issues, edited by Leslie Lipschitz and Donogh McDonald. 1990.

74. The Impact of the European Community’s Internal Market on the EFTA, by Richard K. Abrams. Peter K. Cornelius, Per L. Hedfors, and Gunnar Tersman. 1990.

73. The European Monetary System: Developments and Perspectives, by Horst Ungerer, Jouko J. Hauvonen, Augusto Lopez-Claros, and Thomas Mayer. 1990.

72. The Czech and Slovak Federal Republic; An Economy in Transition, by Jim Prust and an IMF Staff Team. 1990.

71. MULTIMOD Mark II: A Revised and Extended Model, by Paul Masson, Steven Symansky, and Guy Meredith. 1990.

70. The Conduct of Monetary Policy in the Major Industrial Countries: Instruments and Operating Procedures, by Dallas S. Batten, Michael P. Blackwell. In-Su Kim, Simon E. Nocera, and Yuzuru Ozeki. 1990.

69, International Comparisons of Government Expenditure Revisited: The Developing Countries, 1975–86, by Peter S. Heller and Jack Diamond. 1990.

68. Debt Reduction and Economic Activity, by Michael P. Dooley, David Folkerts-Landau, Richard D. Haas, Steven A. Symansky, and Ralph W. Tryon. 1990.

67. The Role of National Saving in the World Economy: Recent Trends and Prospects, by Bijan B. Aghevli, James M. Boughton, Peter J. Montiel. Delano Villanueva. and Geoffrey Woglom. 1990.

66. The European Monetary System in the Context of the Integration of European Financial Markets, by David Folkerts-Landau and Donald J, Mathieson. 1989.

65. Managing Financial Risks in Indebted Developing Countries, by Donald J. Mathieson, David Folkerts-Landau, Timothy Lane, and Iqbal Zaidi. 1989.

64. The Federal Republic of Germany: Adjustment in a Surplus Country, by Leslie Lipschitz, Jeroen Kremers, Thomas Mayer, and Donogh McDonald. 1989.

63. Issues and Developments in International Trade Policy, by Margaret Kelly. Naheed Kirmani, Miranda Xafa, Clemens Boonekamp. and Peter Winglee. 1988.

62. The Common Agricultural Policy of the European Community: Principles and Consequences, by Julius Rosenblatt. Thomas Mayer. Kasper Bartholdy, Dimitrios Demekas. Sanjeev Gupta, and Leslie Lipschitz. 1988.

61. Policy Coordination in the European Monetary System. Part I: The European Monetary System: A Balance Between Rules and Discretion, by Manuel Guitián. Part II: Monetary Coordination Within the European Monetary System: Is There a Rule? by Massimo Russo and Giuseppe Tullio. 1988.

60. Policies for Developing Forward Foreign Exchange Markets, by Peter J. Quirk, Graham Hacche, Viktor Schoofs, and Lothar Weniger. 1988.

59. Measurement of Fiscal Impact: Methodological Issues, edited by Mario I. Blejer and Ke-Young Chu. 1988.

58. The Implications of Fund-Supported Adjustment Programs for Poverty: Experiences in Selected Countries, by Peter S. Heller. A. Lans Bovenberg, Thanos Catsambas. Ke-Young Chu. and Parthasarathi Shome. 1988.

57. The Search for Efficiency in the Adjustment Process: Spain in the 1980s, by Augusto Lopez-Claros. 1988.

56. Privatization and Public Enterprises, by Richard Hemming and Ali M. Mansoor. 1988.

55. Theoretical Aspects of the Design of Fund-Supported Adjustment Programs: A Study by the Research Department of the International Monetary Fund. 1987.

54. Protection and Liberalization: A Review of Analytical Issues, by W. Max Corden. 1987.

53. Floating Exchange Rates in Developing Countries: Experience with Auction and Interbank Markets, by Peter J. Quirk, Bénédicte Vibe Christensen, Kyung-Mo Huh. and Toshihiko Sasaki. 1987.

52. Structural Reform, Stabilization, and Growth in Turkey, by George Kopits. 1987.

51. The Role of the SDR in the International Monetary System: Studies by the Research and Treasurer’s Departments of the International Monetary Fund. 1987.

50. Strengthening the International Monetary System: Exchange Rates, Surveillance, and Objective Indicators, by Andrew Crockett and Morris Goldstein. 1987.

49. Islamic Banking, by Zubair Iqbal and Abbas Mirakhor. 1987.

48. The European Monetary System: Recent Developments, by Horst lingerer, Owen Evans, Thomas Mayer, and Philip Young. 1986.

47. Aging and Social Expenditure in the Major Industrial Countries, 1980–2025, by Peter S. Heller, Richard Hemming, Peter W. Kohnert, and a Staff Team from the Fiscal Affairs Department. 1986.

46. Fund-Supported Programs, Fiscal Policy, and Income Distribution: A Study by the Fiscal Affairs Department of the International Monetary Fund. 1986.

45. Switzerland’s Role as an International Financial Center, by Bénédicte Vibe Christensen. 1986.

44. A Review of the Fiscal Impulse Measure, by Peter S. Heller. Richard D. Haas, and Ahsan H. Mansur. 1986.

42. Global Effects of Fund-Supported Adjustment Programs, by Morris Goldstein. 1986.

41. Fund-Supported Adjustment Programs and Economic Growth, by Mohsin S. Kahn and Malcolm D. Knight. 1985.

39. A Case of Successful Adjustment: Korea’s Experience During 1980–84. by Bijan B. Aghevii and Jorge Marquez-Ruarte. 1985.

Note: For information on the title and availability of Occasional Papers not listed, please consult the IMF Publications Cutalug or contact IMF Publication Services. Occasional Paper Nos. 5–26 are $5.00 a copy (academic rate: $3.00): Nos. 27–64 are $7.50 a copy (academic rate: $4.50); and from No. 65 on, the price is $10.00 a copy (academic rate: $7.50).

The Government established enterprises in a number of sectors, including textiles, paper, glass, and sugar. They proved to be generally inefficient, and since that lime the role of state enterprises in the manufacturing sector has been quite limited.

These included guarantees against nationalization and competition from state enterprises; tariff and business tax exemptions on imports of capital goods and raw materials; a two-year corporate tax holiday; and the possibility of import surcharges on competing imports.

As one example of this, the improvement of transportation links with the Northeast led to a substantial increase in exports of cassava.

The three Fund stand-by arrangements were for S DR 814.5 million, approved in June 1981; for S DR 271.5 million approved in November 1982; and for S DR 400 million, approved in May 1985. In July 1981, drawings under the compensatory financing facility, for S DR 186 million, and the buffer stock financing facility, for S DR 17 million, were also approved. The World Bank’s first structural adjustment loan, for $150 million, was approved in May 1982, followed by a second, for $175.5 million, in March 1983.

In November 1984, the link of the Thai baht to the U.S. dollar was formally abandoned, and the value of the baht is now determined in relation to a basket of currencies reflecting the composition of Thailand’s trade and settlements. In practice, however, the baht has continued to move quite closely with the dollar: thus, just as it appreciated with the dollar in the early 1980s, it also followed the dollar downward in 1985 and 1986.

A discussion of the effect of capital mobility on monetary policy in Thailand can be found in Appendix I.

In May 199(1, Thailand accepted the obligations of Article VIII. Sections 2, 3, and 4 of the Pund’s Articles of Agreement. This was followed in April 1991 by a series of measures to liberalize capital account transactions further; in particular. Thai investors were permitted to transfer freely up to $5 million abroad for domestic investment overseas, and foreign exchange earners were allowed to open foreign exchange accounts with commercial banks in Thailand. The remaining capital account restrictions relate mainly to purchases of real estate, equity, and financial instruments abroad, all of which are subject to approval by the central bank.

The public sector consists of the Central Government and two specialized funds (the Farmer’s Aid Fund and the Rubber Replanting Fund). A broader definition of the public sector would consolidate the accounts of local governments and some 50 non financial public enterprises, including [he Oil Fund. This section focuses on the narrower concept of the public sector.

These included increases in a variety of taxes, notably import duties and excises; the introduction of an exit tax for residents traveling abroad; measures to increase the tax base, especially for income and corporate taxes; and efforts to improve tax administration and collection.

An overall ceiling on the external debt of public enterprises also limited capital spending and increased pressure on them to improve their efficiency.

See Heller. Haas, and Mansur (1986).

Alternative assumptions about the base year and the level of potential output, to which estimates of fiscal stance are known lo be sensitive, yield a generally similar characterization of fiscal policy.

The impact of tax reform on revenues must, however, be judged in a dynamic rather than a static framework. For instance, while the immediate impact of a reduction in import duties would he to reduce revenues, the subsequent increase in imports could result in higher tariff revenues over the longer term.

While comparable data on the share of financial assets to GDP are not available, the ratio of broad money (M2) with respect to GDP in 1989 was 67.4 percent in Thailand, 68.2 percent in Malaysia, 35.2 percent in Indonesia. 93,2 percent in Singapore, and 41.2 percent in Korea.

Foreign banks are disadvantaged with respect to domestic banks in three respects: they are prohibited from opening new branches; being subsidiaries of parent companies, they are not juristic entities, so cannot be quoted on the stock exchange, and thus arc ineligible for the concessional 30 percent corporate tax rate; and they pay a withholding tax on dividends transferred overseas.

The Ministry of Finance docs, however, still hold some shares in IFCT.

Only those companies that are listed or approved by the Securities Exchange of Thailand (SET), and companies awaiting acceptance for their securities to be listed on the SET. are allowed to issue long-term debt. As discussed further below, this situation will change in due course with the introduction of the much awaited Securities and Exchange Commission.

The increased monetisation of the economy from 1982 onward was not reflected in an increase in the private savings ratio, suggesting that it primarily resulted from a shift of funds out of the informal marker

The current government-approved ceiling for Bank of Thailand bond issues is B 30 billion and, as of December 1990, the outstanding amount issued was B 13.4 billion.

Currently, the priority sectors eligible for refinancing are exports (which account for 90 percent of the total). manufacturing, agricultural production, the wholesale trade of agricultural products, stock financing for agricultural exports, and rural development. The export sector has been the major beneficiary of the facilities owing to the more systematic trade documentation system which needs to be presented for access to the facility, compared with other sectors.

The Bank of Thailand requires finance and securities companies to maintain a liquidity asset ratio, which is similar—but less onerous in terms of interest forgone—to the reserve ratio for commercial banks, owing to the nature of their fund mobilization (through promissory notes). The current liquidity asset ratio is 7 percent and may be fulfilled in the form of a balance al the Bank of Thailand, which must be no less than 0.5 percent, government bonds (no less than 5.5 percent), and deposits at commercial banks or call loans to these banks (up to I percent).

The maximum individual shareholding was limited to 5 percent and it was established that banks should have at least 250shareholders. In addition, the Ministry of Finance was given the power to suspend temporarily part or all of a commercial bank’s operations.

The Securities Exchange of Thailand Act was amended mainly to prohibit all insider-trading activities. The new Act also allowed listed companies and SET-approved companies, as well as limited companies whose securities were still under consideration for acceptance by the SET. to issue new debentures to the public. Prior to the amendment, only listed companies had been permitted to do so. In 1985, as an inducement to go public, a different income tax rate was applied to listed companies—30 percent—compared with 35 percent for unlisted companies. In 1986, two foreign funds were established, namely, the Bangkok Fund and the Thailand Fund, to encourage portfolio investment from abroad. Warrants and convertible debentures were introduced in 1988.

Currently, commercial banks are required by the Bank of Thailand to lend at least 20 percent of their previous year’s deposits for rural activities. An amount equivalent lo any shortfall of lending from the target must be deposited in the Bank for Agriculture and Agricultural Cooperatives.

The effective rate of protection measures the percentage by which value added at domestic prices (taking into account the effect of tariffs and other protective measures) exceeds value added at world prices. See Corden (1971) for a full discussion of the concept.

In 1982. the maximum tariff rate on almost all products (except for a few luxury items, including automobiles) was reduced to 60 percent, and a variety of other tariffs were also reduced: the impact of these measures, however, was largely offset by the simultaneous imposition of a 10 percent temporary surcharge on import duties for revenue reasons. In 1984, this surcharge—after first being raised to 20 percent—was eliminated on all but a few products: but in early 1985. tariffs tin raw materials and intermediate goods were raised by 5 percent, and on finished goods by 10 percent, again to boost revenues.

The concept of the effective rate of protection is based on a number of crucial assumptions, including perfect competition, perfect substitution between domestic and imported commodities, fixed coefficient production, and no substitution between industries. Calculations of the effective rate of protection are also complicated by the need for a high degree of aggregation and the difficulties of obtaining input-output data. See Corden (1971) for details.

Based on calculations by Bhattacharya and Brimble (1986) and updated by World Bank staff through 1988.

Also, an analysis of the structure of effective protection in the manufacturing sector by sales orientation suggests that overall the export sector had a higher rate of effective protection than the import-competing sector, partly because sonic important exporting sectors (such as textiles) started off as import-competing industries and expanded into exports as the domestic market became saturated (Table 12). While this would not. of course, help these industries on the world market, such industries could benefit through relatively high profits on their domestic production. Competitive conditions in the domestic market would also play a role.

The countries in the sample were Thailand, Indonesia. Korea, Malaysia, and the Philippines.

The goods covered are principally under Sections 84 and 85 of the Customs Tariff. Items not covered include consumer and business electronics, transportation equipment such as automotive engines, and certain items that can be produced domestically such as air conditioners. The Board of Investment retains the ability to grant exemptions on business and local taxes on these items.

Important differences in the degree and nature of import protection afforded to various sectors across the region remain.

The deeper question of the ability of the monetary authorities to sterilize such inflows obviously hinges on the degree of capital mobility. Appendix I discusses this issue for Thailand.

The process of fiscal consolidation in Thailand is described in greater detail in Section III.

For example, Thailand’s trade with Malaysia and Indonesia accounts for less than 4 percent of the total: similarly, direct investment flows from the latter were less than 1 percent of the total in 1989.

Table 14 should be interpreted with care, since the data are partly distorted by entrepôt trade with Singapore and Hong Kong The lack of data on a comparable basis precludes a correction for such transactions.

Although Thailand’s exports are less concentrated on East Asia than either Malaysia’s or Indonesia’s, its regional exports have grown markedly in dollar terms, while its regional export share has remained steady at a little over one third of total exports. Correspondingly. Thai exports are more dependent on North American and European Community (EC) markets.

As with trade data, the figures here need to be interpreted cautiously, since what is classified as “regional investment” may in fact be investment undertaken by regional affiliates of multinational corporations.

The net liability position is limited to $5 million or 20 percent of capital, whichever is larger; the net asset position is limited to $5 million or 25 percent of capital, whichever is larger. It should also be noted that banks cannot lend in foreign-exchange-denominated instruments.

In theory, small firms could seek foreign loans with a guarantee from a domestic bank, but such guarantees are also covered by the limit on the net open position of banks.

Indirectly, of course, the ceilings on lending and deposit rates will also have affected the interbank rate.

While there is a forward exchange market in Thailand, transactions in it are restricted, and so the forward premium (or discount) is not a good measure of exchange rate expectations.

The monetary surprise variable was defined as the residual obtained from regressing monetary growth on its past seven Sagged values.

Neither of the Two estimations using the Edwards and Khan approach satisfactorily predicts the substantial increase in the differential between domestic and foreign rates in 1990. which may also imply that the specification of domestic monetary disequilibria is not fully satisfactory.

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