Thailand’s former deputy premier and finance minister, Kittiratt Na Ranong, has been nominated by the government for the chair of the Bank of Thailand (BoT), according to government sources. The government is eager for a rate cut to help boost the struggling economy, and they see Mr. Kittiratt as a candidate who will support their efforts.
Mr. Kittiratt, a ruling party loyalist and critic of the current central bank governor, has a history of wrangling with the central bank over monetary policy during his time as finance minister from 2012-2014. His nomination for the BoT chair is seen as a move by the government to assert influence over the institution and push for a rate cut.
The BoT raised the benchmark rate to a decade-high of 2.50% just weeks after the Pheu Thai Party returned to power in September 2023. Despite repeated calls for easing, the rate has remained unchanged. Mr. Kittiratt has been vocal in his support for a rate cut as a means to revive the economy, which grew just 1.9% last year.
The decision on the BoT chair will be made by a seven-member panel independent of the central bank, and must be approved by the finance minister, cabinet, and king. While the chair cannot directly influence interest rate policy, they do have some influence over the selection of the monetary policy committee, which includes the governor, deputy governors, and outside experts.
The current central bank governor, Sethaput Suthiwartnarueput, has maintained that while a rate cut could provide a short-term boost to the economy, it may have longer-term unintended consequences. The BoT has defended its policy settings as being at neutral levels, attributing below-potential growth to structural issues.
The nominations for the BoT chair are subject to qualification checks, which should be completed within two weeks. The selection committee will meet to make a decision before the middle of October. The new chair will also have some influence over the selection of the next BoT chief when Mr. Sethaput completes his term in September 2025.
In the midst of the rates row, Commerce Minister Pichai Naripthaphan has called on the central bank to cut interest rates to increase liquidity and stimulate growth in the economy. The government, led by Pheu Thai’s leader Paetongtarn Shinawatra, has criticized the central bank’s independence as an obstacle to their economic agenda.
Overall, the nomination of Kittiratt Na Ranong for the chair of the Bank of Thailand reflects the government’s desire for a rate cut to help boost the struggling economy. The decision on the new chair will be closely watched as it could have implications for monetary policy and economic growth in the country.