Government anxious to see interest rates cut as the economy struggles
Described: 16 Sep 2024 at 21: 50
In response to a protracted rift over interest rates, the government will seek to appoint a member of the ruling party who will criticize the governor of the Bank of Thailand ( BoT ) as its chair, according to two sources.
According to the resources who have access to the information, the Pheu Thai Party-led state is supporting 66-year-old former assistant top and finance secretary Kittiratt Na Ranong for the position. Mr Kittiratt’s election has yet to be reported by advertising.
Mr. Kittiratt and the then-central bank government had frequent arguing over economic policy while serving as finance minister from 2012 to 2014.
In recent months, he has backed the latest government’s requirements for a price cut, as it seeks to revive a mumbling business that grew only 1.9 % last month.
The BoT raised the standard price for an seventh straight conference to a decade-high of 2.50 %, where it has since remained, despite repeated enquiries for easing, just days after the nationalist Pheu Thai returned to power in September 2023.
The BoT claimed it had nominated two candidates for the position but declined to disclose them, while Mr. Kittiratt did not immediately respond to a request for comment. The funding ministry’s permanent secretary declined to comment.
A seven-member screen, independent of the central banks, will make the selection of the three elected candidates in the coming weeks and may require the approval of the finance secretary, cabinet, and king.
The government, two assistant rulers, and four outside specialists are chosen by the table they lead to decide the central bank’s interest rate plan.
The chair will also have some impact on the selection of the following BoT main when the former, Sethaput Suthiwartnarueput, completes his phrase in September 2025.
Rates column
The BoT claims that structural issues caused the country’s growth rate to be at negative rates and that it was not at its potential.
Mr Sethaput has maintained that, while a rate reduce may provide a short-term pull to the market, it was not an effective trade-off , for the longer-term unexpected effects it could have.
The BoT’s unwillingness to budge on charges has drawn criticism, including from Pheu Thai’s head Paetongtarn Shinawatra, elected prime minister next month, who described the main company’s freedom as an “obstacle” in May.
Even as the state struggles to restart growth in Southeast Asia’s second-largest market, Commerce Minister Pichai Naripthaphan once more demanded that the central bank cut interest rates to improve cash on Monday.
The BoT will conduct qualification checks for the three head nominations, which may take two weeks, according to choice committee head Sathit Limpongpan.
The council will match after the testimonials are finished, and it will hold a second meeting before the middle of October, he told Reuters.