The United States Department of the Treasury and the Bank of Thailand have announced that they will continue close consultations on macroeconomic and foreign exchange issues. Both institutions reaffirmed their commitment under the International Monetary Fund (IMF) Articles of Agreement to avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.
The statement outlined several key points agreed upon by both parties. They confirmed that any macroprudential or capital flow measures will not be used to target exchange rates for competitive purposes. Additionally, government investment vehicles such as pension funds will not be employed by either institution to influence exchange rates competitively.
In circumstances where intervention in foreign exchange markets is considered, both sides agreed this should only occur to address excessive volatility and disorderly movements in exchange rates. The expectation is that such interventions would be appropriate for addressing both excessively volatile depreciation and appreciation.
Transparency was also emphasized as a priority. The United States Department of the Treasury and the Bank of Thailand committed to publicly disclosing any foreign exchange intervention operations at least semiannually with a quarterly lag. They also agreed to release data on foreign exchange reserves and forward positions according to the IMF’s Data Template on International Reserves and Foreign Currency Liquidity each month.
“The United States Department of the Treasury and the Bank of Thailand reconfirmed they have undertaken under the IMF Articles of Agreement to avoid manipulating exchange rates or the international monetary system to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.”
