ABSTRACT
This chapter discusses the impact of the quantitative easing on Thailand's exchange rates and exports. Unconventional monetary policy conducted in the United States and Japan affected Thailand's capital flows, interest rates, exchange rates, and the stock market price. The unconventional monetary policy conducted by the Fed since 2008 has affected long-term interest rates through quantitative easing (QE). QE programs have a far-reaching impact on investment and long-run productivity growth of the country. Maintaining a long duration of the large interest rate gap complicates the BoT's conduct of monetary and exchange rate policy. The poor performance of Thailand's exports can partly be attributed to the expansion of the dollar supply that caused baht appreciation. Unless the QE programs generate sustainable recovery in the United States and Japan, Thailand's economic recovery will be protracted because of declining exports, plunging commodity prices, and sluggish consumption and investment expenditures.
