Thailand’s government is pushing for a swift resolution in selecting a new chairman for the central bank following the disqualification of the previous nominee, former finance minister Kittiratt Na-Ranong, due to political affiliations.
The finance minister, Pichai Chunhavajira, mentioned that a seven-member selection panel will finalize the process, expecting it to be expedited as they are not starting from scratch. This decision marks the first official response from the government, indicating they will not pursue Kittiratt’s candidacy to avoid potential legal complications.
Kittiratt’s candidacy faced significant opposition from former central bank leaders and economists, including ex-BOT Governors Veerathai Santiprabhob and Tarisa Watanagase, who argued that appointing someone with political ties would compromise the institution’s credibility.
The administration, led by Prime Minister Paetongtarn Shinawatra, has been in friction with the Bank of Thailand (BOT) over issues like monetary policy, with Pichai advocating for interest rate cuts to aid economic recovery.
Meanwhile, the panel faces the option of choosing either Kulit Sombatsiri, with experience in the energy and finance ministries, or academic Surapon Nitikraipot as the new chair, or restarting the selection process altogether. The delay resulted in Porametee Vimolsiri, the previous BOT chair, temporarily holding the position.
The government aims to increase its influence over the BOT by appointing its preferred candidate as chair. While the chairperson does not participate in monetary policy meetings, the position holds power in assessing the governor’s performance and influencing the selection of external experts for the seven-member rate panel.
Despite government pressures to reduce borrowing costs, the Monetary Policy Committee, led by Governor Sethaput Suthiwartnaruep, maintained the benchmark rate at 2.25% last month, prioritizing the preservation of monetary policy flexibility amid rising uncertainties.
Pichai stated on Thursday that if economic recovery remains sluggish, rate cuts should be considered. The central bank’s committee, in contrast, disclosed that a broadly neutral stance would be suitable as inflation aligns with the target range, as per the edited minutes of its December meeting.
In December, the BOT projected Thailand’s economic growth to accelerate to 2.9% this year, compared to an estimated 2.7% for 2024. The nation’s GDP figures are expected to be released in mid-February.
