By Panarat Thepgumpanat and Kitiphong Thaichareon
BANGKOK (Reuters) – A Thai panel on Monday (NASDAQ:MNDY) picked ruling party loyalist and former Finance Minister Kittiratt na Ranong to chair the central bank’s board, two government sources said, backing the government’s candidate despite concerns over political interference.
The independent panel had come to a decision and would seek cabinet approval, its chief said earlier, without naming the candidate.
The decision comes amid concern from economists and four former central bank governors over the government’s nomination and its ability to influence the monetary authority, whose governor Kittiratt has criticised.
The government sources who confirmed the selection of 66-year-old former deputy premier Kittiratt spoke on the condition of anonymity because were not authorised to speak to media on the issue.
The government’s nomination of Kittiratt for the post was first reported by Reuters and followed months of persistent pressure on the Bank of Thailand (BOT) to slash interest rates, which had been held steady at a decade high for a year until a surprise cut last month.
At the weekend, 800 economists including four former BOT governors warned that political interference could damage long-term economic stability.
In an open letter, they also warned that if successful getting its candidate as board chair, the ruling party might 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.
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.
A finance minister from 2012-2014, Kittiratt locked horns frequently with the then central bank chief over monetary policy and he has backed the current government’s repeated demands for a rate cut, which it says is crucial to reviving an economy that grew just 1.9% last year.
Having long resisted the pressure, the BOT unexpectedly reduced its key rate by a quarter point to 2.25% on Oct. 16, the first reduction since 2020. The next policy review is on Dec. 18.