The Bank of Thailand expects that recent US military operations in Venezuela will amplify global uncertainty across military, trade and financial sectors this year and into next.
At the central bank’s Monetary Policy Forum on Wednesday, Deputy Governor Piti Disyatat, who is also a member of the Monetary Policy Committee (MPC), said the US action increases geopolitical risks and could deepen instability in global security, commerce and financial markets.
He noted that the world is already confronting heightened tensions due to ongoing conflicts and expanded use of military force, with the United States playing a central role in shaping international security norms, further contributing to uncertainty.
Mr Piti warned the military operation may mark the start of an intensified global trade war. He highlighted that recent US trade policies have already caused significant shifts in international production networks and trade patterns.
On the financial side, he said the operation could lead to greater volatility in global monetary policies and financial markets, especially with a possible change in leadership at the US Federal Reserve expected soon. “There could be significant implications for global financial conditions toward the end of the year,” Mr Piti said, adding that the MPC will closely monitor developments.
Concerning China-US relations, Mr Piti explained that tensions between the two largest economies carry direct impact for Asia, and the Bank of Thailand is tracking these dynamics for potential spillover effects. He observed that geopolitical developments are increasingly influencing regional economic outcomes, often outweighing traditional economic factors.
Despite the uncertainties, the MPC will maintain an accommodative monetary policy stance to support the Thai economy. Mr Piti said the committee sees room to ease policy further due to the economic slowdown and rising risks, in order to ensure supportive financial conditions and help reduce debt burdens for vulnerable groups.
He added that lower interest rates would also enhance the effectiveness of other financial measures and government policies. The committee noted that interest rates in financial institutions and markets have fallen in line with earlier policy rate cuts, although the transmission of those cuts to borrowing costs has varied across sectors.