By Naewna and Reuters – published by Yahoo!News
A SEVEN-MEMBER committee independent of the Bank of Thailand today (Nov. 11) selected former deputy premier and finance minister Kittiratt Na Ranong, 66, chairman of the central bank board amid objections by hundreds of academics, members of Economics for Society group and followers of highly-revered late monk Luang Ta Phra Maha Bua Yanasampanno, Naewna newspaper said later afternoon today (Nov. 11).
Followers of the late monk, who is renowned for helping fill the national reserves after they were depleted during the Tom Yam Gung financial crisis in 1997-98, had today submitted a letter stating their objection to the nomination of Kittiratt for this key post.
Three persons were in the running for this position with Kittiratt, who is a ruling party loyalist while also being critic of the central bank Governor Sethaput Suthiwartnarueput, being nominated by the Finance Ministry.
The other two nominated by the central bank were Mr. Kulit Sombatsiri, former permanent secretary of the Energy Ministry, and Mr. Surapon Nitikraipot, chairman of the Thammasat University Council and independent director of PTT Plc. This replacement was necessitated by former chairman Mr.Porametee Vimolsiri’s term having ended on Sep. 11, 2024.
The BOT chair cannot direct the central bank’s interest rates policy but the board they head selects the monetary policy committee, comprising the governor, two deputy governors and four outside experts, Reuters said.
The chairman will also have some influence on the selection of the next BOT chief when the incumbent, Sethaput, completes his term in September 2025.
Rows over rates
As finance minister from 2012-2014, Kittiratt locked horns frequently with the then central bank chief over monetary policy and he had backed the current government’s repeated demands for a rate cut to revive an economy that grew just 1.9% last year.
Having long resisted the pressure, the central bank unexpectedly reduced its key rate by a quarter point to 2.25% on Oct. 16, the first cut since 2020. The next policy review is Dec. 18.
The government has been at odds with the central bank since returning to power in September 2023.
Kittiratt’s selection could widen the rift between the central bank and the government led by the Pheu Thai Party, whose leadership has often clashed with the monetary authority on interest rates
Central bank governor Chatu Mongol Sonakul was sacked in 2001 on the orders of the premier Thaksin Shinawatra, Pheu Thai’s influential founder and father of Paetongtarn Shinawatra, who recently became prime minister.
Paetongtarn said in May the central bank’s independence was “an obstacle”.
Last month, former Bank of Thailand governor Tarisa Watanagase warned that the institution’s independence could be at threat and that could “lead to a disaster for the economy”.
In an open letter at the weekend, a group of more than 800 economists that included four former central bank governors warned that political interference could damage long-term economic stability, adding that the ruling party might also push for its nominee as governor next year.
“If the board chairman or members use their power to serve the short-term interests of the political party, it will have a negative impact on economic stability and may cause irreparable or irreversible damage,” it said.
The government has yet to comment on the letter.
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Former deputy prime minister and finance minister Kittiratt Na Ranong. Top photo: Naewna, Front Page photo: Reuters and published by CNA
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