Thailand’s former central bankers are vying for apolitical chairmanship

(Bloomberg) — A group of former Thailand central bank officials is calling for a non-political person to be appointed as the bank’s chairman amid reports that the government is pushing ahead with a former finance minister to tighten its grip on the monetary authority. .

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According to Economists for Society, which includes former Bank of Thailand governor Wirathai Santhiprabhob, if candidates with close political connections are elected to and as members of the Bank of Thailand board of directors, they will be able to use their powers to serve short-term party interests, with with which they are connected. , Prasarn Trairatvorakul, Tarisa Watanagase, Pridiyatorn Devakula and about 200 economists and scientists.

“If the chairman or board members use their power to serve the short-term interests of political parties, it will have a negative impact on economic stability and could cause irreparable harm,” the group wrote in an open letter Wednesday.

The call for a neutral chairman comes as a panel is scheduled to meet on Monday to select the head and two board members from a list proposed by the Finance Ministry and the central bank. Kittiratt Na-Ranong, a critic of BOT’s policies and a supporter of the ruling party, is considered the favorite to become chairman.

Tensions between the government and the central bank have been running high for months as they disagree over the best way to revive Southeast Asia’s second-largest economy, which has lagged the growth rate of its neighbors over the past decade. While Prime Minister Paetongtarn Shinawatra’s administration wants deeper interest rate cuts to support economic growth, the conservative central bank led by governor Sethaput Suthiwartnarueput is advocating a cautious approach.

However, a surprise rate cut earlier this month and an agreement between the BOT and the Treasury to maintain the inflation target of 1% to 3% for next year have helped cool tensions. Finance Minister Pichai Chunhawajira has signaled he will continue to push the central bank to do more to boost economic growth.

According to local media reports, the BOT has proposed Kulit Sombatsiri, a retired former permanent secretary of the Ministry of Energy, as well as academician Surapon Nitikraypot as its candidates for the position of board chairman.

Although the governor of the Bank of the Bank does not have the power to dictate monetary policy, the official can evaluate the performance of the central bank governor. The chairman also has a say: outside experts join a seven-member rate commission chaired by the governor.

If the government manages to nominate its candidate for the post of BOT chairman and influence its policies, political parties may try to nominate a candidate of their choice for governor when Sethaput completes his term next year, according to the group.

The selection committee must “carry out its responsibilities honestly, fairly, transparently and effectively without succumbing to political pressure to preserve such an important institution as the Bank of Thailand,” the group said.