Calculate how much liquidity the Bank of Thailand (BOT) needs to absorb or inject in order to maintain the current level
Posted: Sun Jun 05, 2022 12:00 pm
Calculate how much liquidity the Bank of Thailand
(BOT) needs to absorb or inject in order to maintain the current level of the policy rate, given the following liquidity forecasts:
1) Demand for Monetary Base
- An increase in currency in circulation of 30 million baht
- A reduction in commercial banks' deposits at the
BOT of 10 million baht
2) Supply of Monetary Base
- 40 million baht of government bonds matures
- The government issues new bonds of 45 million
baht
• The government's deficit is 38 million baht
- The BOT bought US dollars worth 12 million baht
(settles today)
- The BOT lends 10 million baht to a bank
(BOT) needs to absorb or inject in order to maintain the current level of the policy rate, given the following liquidity forecasts:
1) Demand for Monetary Base
- An increase in currency in circulation of 30 million baht
- A reduction in commercial banks' deposits at the
BOT of 10 million baht
2) Supply of Monetary Base
- 40 million baht of government bonds matures
- The government issues new bonds of 45 million
baht
• The government's deficit is 38 million baht
- The BOT bought US dollars worth 12 million baht
(settles today)
- The BOT lends 10 million baht to a bank