Govt steps up campaign targeting the Bank of Thailand on interest rates

[webfact]

Popular Pheu Thai figure and Prime Ministerial advisor, Mr Pichai Naripthaphan, a former deputy minister of finance. He is among a number of senior officials this week who have been highly critical of the central bank.

 

Populist rhetoric rises as officials criticise the central bank’s monetary policy. The Government is pressuring the Bank of Thailand to cut rates, but its Governor stands firm.

 

As the economy struggles in the face of chronic structural retardants, the government appears intent on creating a sense of alarm and crisis. Confidence in the economy is wavering. Ironically, if the dissent over interest rates intensifies, it risks provoking real trouble.

The government in the last week has stepped up its populist rhetoric against the Bank of Thailand’s monetary policy. With press reports featured on Reuters and Bloomberg, successive officials and ministers have tried to create a sense of economic crisis. In the short term, this appears to be aimed at the next Bank of Thailand Monetary Policy Committee meeting on February 7.

 

However, in the long term the commentary has a negative impact on confidence in both the government and the country’s economy. 

The commentary by officials and aides to the Prime Minister even took aim at the Bank of Thailand’s Governor’s annual salary at ฿20 million. It is not clear where this is leading but undoubtedly the ongoing spat is not helping. 

 

At the same time, Thailand must go back to the blackboard and address the country’s chronic structural problems. 

 

by Joseph O' Connor

 

Full story: Thai Eaxaminer 2024-02-01

 

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[JoePai]

the Bank of Thailand’s Governor’s annual salary at ฿20 million

 

Wow is he the highest paid civil servant ?

[ikke1959]

of course the interest rate should be cut. The Government wants a loan and the interest they have to pay will be too high.. so cut the interest rate easy to borrow the 500 billion for the 10k scheme 

[connda]

3 hours ago, webfact said:

Populist rhetoric rises as officials criticise the central bank’s monetary policy. The Government is pressuring the Bank of Thailand to cut rates, but its Governor stands firm.

Mega-Projects funding and a half-Trillion Thai Baht public give-a-way, combined with lowering interest rates will be highly inflationary.  34K THB gold today; 50K THB gold soon.

Who will that effect the most.  The economically disadvantaged and most vulnerable. Who by the way will be dumping their family's gold jewelry in order to survive day-to-day.

[connda]

1 hour ago, ikke1959 said:

of course the interest rate should be cut. The Government wants a loan and the interest they have to pay will be too high.

Debt which was caused by engaging in deficient spending after dropping the interest rates close to zero for close to 15 years.

Pour gasoline on the economy, then try to put out the flames with kerosene. 

[bamnutsak]

Airing this continuing feud between the PM slash Finance Minster and the BoT in public seems like a huge mistake, on the part of the "government".

 

[Mike Lister]

9 minutes ago, connda said:

Debt which was caused by engaging in deficient spending after dropping the interest rates close to zero for close to 15 years.

Pour gasoline on the economy, then try to put out the flames with kerosene. 

I agree there were consistent budget deficits but they were not large by any means, the IMF even encouraged the government in 2021 to use larger deficits to build out infrastructures, which they have done. Mostly this was because the country's debt levels are so low, around 60% of GDP plus around 96% of that debt is in THB with almost no foreign debt. Most of the deficits over the years have resulted from handouts and giveaways to the rural poor which were not budgeted.

 

[hotchilli]

On 2/1/2024 at 6:36 AM, webfact said:

As the economy struggles in the face of chronic structural retardants,

Is the truth allowed to be in print?

[Srikcir]

On 2/1/2024 at 6:36 AM, webfact said:

The government in the last week has stepped up its populist rhetoric against the Bank of Thailand’s monetary policy.

I wouldn't connect "populist" with this government's economic policies that seem driven by political theater than by economic realities.

 

[Mike Lister]

1 minute ago, Srikcir said:

I wouldn't connect "populist" with this government's economic policies that seem driven by political theater than by economic realities.

 

This could all end in tears if they're not careful.