Overview of Thailand’s Approach to Financial Liberalisation
As mentioned in the previous chapters in order to successfully integrate the domestic economy with the global economy it is important to follow a certain set of financial sector reforms. In order for the liberalisation process to take off it is important to introduce a range of reforms like trade reforms, foreign exchange policy reforms, capital controls and the domestic financial market reforms.
The objective of this chapter is to provide an analysis of the strategies and policies adopted in the financial liberalisation process as implemented by Thailand. It begins with an overview of Thailand’s economic development, including a review of the history of Thai economic growth prior to the financial liberalisation period in the 1990s and then analyses the internal and external factors that influenced Thailand’s decision to liberalise its financial system. Furthermore, it portrays the framework of financial liberalisation pursued by Thailand.
The chapter proceeds in the following manner. Section 3.2 presents a summary of the six Development Plans that Thailand implemented during the period of 1961–1991. Additionally, a brief analysis of the economic performance of Thailand during each plan is also provided in this section. Section 3.3 reviews the background of Thai economic growth, focusing on the period before financial liberalisation was implemented. Section 3.4 analyses the factors that influence Thailand’s financial liberalisation. The factors discussed in this section are internal and external. Section 3.5 provides an overview of the framework of the financial liberalisation. Lastly, a summary is given in Sect. 3.6.
KeywordsInterest Rate Foreign Direct Investment Commercial Bank Foreign Currency International Reserve
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