Economists warn about meddling in Bank of Thailand

More than 800 Thai economists, including four former governors of the Bank of Thailand, warned on Saturday of political interference in selecting the central bank’s board chairman, saying it could damage long-term economic stability.
The government’s nomination of former commerce minister Kittirat Na-Ranong, a Pheu Thai Party loyalist and critic of central bank governor Sethaput Suthiwartnarueput, has sparked concerns over the central bank’s independence.
Since taking office last year, the Pheu Thai-led government, now under Prime Minister Paetongtarn Shinawatra, has been at loggerheads with the BoT, pressuring the central bank to cut interest rates and raise its inflation target.
The central bank unexpectedly cut rates last month for the first time since 2020, but Mr Sethaput signalled that there would not be another cut at the final meeting of the year in December.
Should the BoT “carry out the wishes of the political group, then it would tarnish the credibility of the central bank, which must maintain a strong economic stability for the country in the long term”, the 830 economists said in a statement on Saturday.
The group has previously expressed concern over having a candidate with close political connections who they say has shown an intention to interfere in BoT monetary policy decisions.
Government spokesman Jirayu Houngsub declined to comment on the statement. Mr Kittirat did not immediately respond to a request for comment.
The independent committee selecting the board chairman is scheduled to meet on Monday after delaying its decision twice, saying it needed more time to “consider all aspects of information” amid the tension between the central bank and the government.
The central bank board chairman is not involved in interest rate decisions but heads the panel that chooses Monetary Policy Committee members. The chairman will also be involved in selecting the next governor when Mr Sethaput’s term ends in September 2025.
There are two other candidates for the role — a former permanent secretary of energy and a former university dean — who were nominated by the central bank. Thai law allows the government to nominate one candidate for every two central bank nominees.
Once the seven-member selection committee picks a chairman, it decision requires the approval of the finance minister, the cabinet and the King.