Thai Government Nominates Party Loyalist for Bank of Thailand Chair - Multibagger
In a move to assert influence over the Bank of Thailand amid disagreements over interest rates, the Thai government is backing former deputy premier and finance minister Kittiratt Na Ranong for the chair position, according to sources. Kittiratt, a critic of the central bank governor, has been vocal about the need for a rate cut to stimulate the economy.
The Pheu Thai Party-led government's support for Kittiratt comes as the economy struggles to grow, with the central bank maintaining a high benchmark rate despite calls for easing. The decision on the appointment will be made by a seven-member panel independent of the central bank, with approval required from the finance minister, cabinet, and king.
While the BOT chair does not directly control interest rate policy, they do play a role in selecting the monetary policy committee. The current governor, Sethaput Suthiwartnarueput, is set to complete his term in 2025, and the new chair will have some influence over the selection of the next chief.
The BOT has defended its policy stance, citing structural issues affecting growth. Sethaput has argued against a rate cut, emphasizing the potential negative consequences in the long run. The government, including Prime Minister Paetongtarn Shinawatra, has called for lower rates to boost liquidity and kickstart the economy.
The three nominees for chair will undergo qualification checks before a decision is made by mid-October. The selection committee will review the candidates and finalize their choice. The current BOT board chairman, Porametee Vimolsiri, was appointed in 2018 by the previous government and will play a role in the transition to a new chair.
In conclusion, the nomination of Kittiratt Na Ranong for the Bank of Thailand chair position reflects the government's push for a rate cut to stimulate economic growth. The decision on the appointment will have implications for monetary policy and the future direction of the central bank. Investors and individuals should monitor these developments closely as they could impact financial markets and overall economic stability.