The governor of Thailand’s central bank expressed concerns about the diminishing independence of central banks, citing increased pressures over the past decade, according to a speech transcript released by the Bank of Thailand on Monday.
“If we allow central bank independence to be eroded, we will not be able to deliver on our mandates,” Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand, emphasized during the speech at the BIS annual conference in Basel per quote by Reuters.
The comment from the governor came after Thailand’s central bank announced on Monday that the selection of the next Bank of Thailand board chairman by an independent committee has been postponed to the following week, allowing for more thorough consideration of available information.
This marks the third time the decision has been delayed, raising speculation and causing attention around the BOT headquarters, where gatherings have been reported.
Criticism has been directed towards the government’s public support for Kittiratt Na-Ranong, an outspoken critic of the central bank’s restrictive monetary policies and a prominent advocate for the ruling party.
Despite the fact that the BOT chairman does not wield direct influence over monetary policy decisions, the individual plays a key role in assessing the BOT governor’s performance and in the selection of external experts for the seven-member Monetary Policy Committee, which is overseen by Sethaput Suthiwartnarueput.
The discord between the BOT committee and the Thai government, particularly regarding monetary policy, has become increasingly apparent. The government, under the leadership of the Pheu Thai Party, has been advocating for rate cuts by the central bank to alleviate household debt since the previous year, a stance that has not been embraced by the central bank. Despite economic trends analysis, the central bank opted to hold rates steady, only making a rate cut in October 2024.
