ease ? interest rates increase ? Inflation rate and interest rate Real interest rate = nominal interest rate – inflation rate GBUTtem 8 Question 5: Assume that Thailand ’ s central bank wishes to prevent a withdrawal of funds from its country in order to prevent further changes in the currency ’ s value. How could it plish this objective using interest rates. GBUTtem 9 Measures (use interest rates) to prevent further changes in Thai baht ’s value 1. Place low tax on interest e earned from foreign investment 2. Favorable interest rate especially for business on domestic infrastructures 3. Provide favorable interest rate for Thailand ’s “ target customers ” (country or large corporation) 4. Encourage people to found their business by lowing down the interest rate
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