Growing Support for Central Bank Independence Amid Political Concerns

[webfact]

Picture courtesy: Bank of Thailand (BoT)

 

The campaign to safeguard the independence of the Bank of Thailand has gained significant momentum, with 830 academics and members of the Economics for Society group now backing the cause.

 

Among these supporters are four former governors of the Bank of Thailand, underscoring the importance of keeping political influence at bay. This push coincides with the upcoming selection of a new chairman and two board members for the central bank, slated for Monday, November 11, following a weeklong delay.

 

In their third public statement, the group stressed the vital need for the selection committee to maintain the bank's independence. This comes amidst opposing views from factions with close political affiliations, who have expressed disagreement with the group’s stance.

 

Particularly contentious is the potential appointment of Mr. Kittiratt Na Ranong as board chairman. The academics argue that while personal capabilities are important, it's crucial for the individual in this role to remain devoid of strong political ties. They fear that any association with political agendas could compromise the bank's objective monetary policy-making.

 

The group's concerns extend beyond individual appointments. They cite historical instances, such as the 1997 Tom Yum Kung financial crisis, arguing that political influence may have contributed to past economic errors.

 

They assert that while the Bank of Thailand has made mistakes independently, political control inherently introduces unpredictable variables and incentives, which are often detrimental to economic stability.

 

The global precedent supports their position: central bank independence is key to credible monetary policy and controlled inflation rates. Without this independence, monetary policy becomes unreliable, potentially leading to economic instability and uncontrollable inflation.

 

Ultimately, this growing advocacy highlights a critical dialogue on maintaining robust economic governance free from political pressures, aiming to ensure long-term financial stability and credibility, reported Thai Newsroom.

 

-- 2024-11-11

 

 

[hotchilli]

7 hours ago, webfact said:

In their third public statement, the group stressed the vital need for the selection committee to maintain the bank's independence. This comes amidst opposing views from factions with close political affiliations, who have expressed disagreement with the group’s stance.

Bog off Thaksin.. this ain't your business.

[jcmj]

Probably a good idea, however, I think they need to allow the baht to appreciate or depreciate according to international markets. They control how the Baht moves alone. This can easily cause big problems for everyone. They don’t want a crash like 97, but want all of the tourists, investors and home buyers it created in the golden years following it. They need to find a balance.