On Friday, December 2nd, a conference was organized jointly by the Bank of Thailand (BOT) and the Bank for International Settlements (BIS) to explore the roles of central banks in promoting economic growth and containing inflation.
Senior executives from foreign central banks and worldwide financial institutions met at the conference with the topic “Central Banking Amidst Shifting Ground” to discuss global economic circumstances, inflation, financial innovations, and climate change.
BOT Governor Sethaput Suthiwartnarueput gave the opening remarks, highlighting three challenges facing central banks around the world: a rapidly changing economic backdrop that has transformed the nature of the underlying policy challenge; a need for new conceptual frameworks to guide policy; and new institutional pressure points on policy mandates and central bank independence.
According to Sethaput, inflation has “returned with a fury” because global supply networks are under extreme stress due to the high increase in global demand following the epidemic, paired with a shift of that demand from services to products.
He added that supply headwinds and higher pricing pressures will likely be exerted in the future due to increased fragmentation, an aging population, and the expensive but required green shift.
Maintaining economic and financial stability in the face of shifting fault lines, as Sethaput put it, “will require a steady hand,” and “staying focused on achieving our core mandates, ensuring that expectations for our policy goals are commensurate with the tools we have while recognizing the potential unintended side effects of those tools.”
