By Kitiphong Thaichareon and Thanadech Staporncharnchai
BANGKOK (Reuters) – Thailand’s interest rates should be cut quickly and sharply to help lift the economy out of “disaster”, according to a former finance minister who is widely expected to be named chair of the board of the central bank.
Ruling party loyalist Kittiratt na Ranong, a former finance minister and stock exchange president, during a seminar on Thursday said borrowing rates were too high and all sides must work together to address that.
“It’s the way to prevent disaster. Today, I still believe that,” he said in reiterating a call he first made last year for fast and sharp cuts in interest rates to boost the economy.
The government has yet to confirm the selection of Kittiratt as chair of the board of the Bank of Thailand but sources with knowledge of the process have confirmed to Reuters his selection, which has been widely reported in local media.
The government’s nomination of Kittiratt for the job, first reported by Reuters, faced strong opposition from economists and former Bank of Thailand governors concerned about political influence on the independent central bank.
The Pheu Thai Party-led government has been at odds with the central bank for the bulk of its time in office since returning to power in September 2023, mostly over interest rates it says are shackling the economy.
‘INTERVENE WITH THOUGHTS’
Kittiratt was finance minister under the last Pheu Thai government from 2012-2014 and at the time wrangled frequently with the central bank’s governor.
His comments on Thursday came a day after the BOT’s monetary policy committee left its key rate unchanged at 2.25% on Wednesday, after a surprise cut at its previous meeting in October.
Kittiratt said the committee must have a reason for holding the rate, even though others felt a cut would have been helpful to the economy.
Regarding the BOT board chairmanship, Kittiratt said he has yet to be in that position but, if appointed, he would perform that duty well.
“If you believe I will be able to do a good job, I must do good things to meet the expectations of all parties,” he said, without elaborating.
The BOT board chair does not have the power to order anything, Kittiratt stressed, adding that holder would only “intervene with thoughts”.
Though the BOT chair cannot direct the central bank’s interest rates policy, the board they head selects the monetary policy committee, comprising the governor, two deputy governors and four outside experts.
The chairman will also have some influence on the selection of the next BOT chief when the incumbent, Sethaput Suthiwartnarueput, completes his term in September 2025.
(Reporting by Kitiphong Thaichareon and Thanadech Staporncharnchai; Writing by Orathai Sriring; Editing by John Mair, Martin Petty)
