Kittiratt Urges Rate Cuts to Prevent Economic 'Disaster' in Thailand

[webfact]

Picture courtesy: Naew Na

 

Thailand's economy is on a precipice, warns Kittiratt Na Ranong, who is poised to take the helm of the nation's central bank. Kittiratt, a veteran finance minister and stalwart of the Pheu Thai Party, believes that immediate and significant cuts to the country's interest rates are essential to stave off economic decline.

 

Speaking at a seminar on Thursday, Kittiratt was emphatic in his message that current interest rates are excessively high. "This is how we prevent disaster," he asserted, reaffirming his long-standing position that lower rates would invigorate the Thai economy.

 

While the government has yet to formally confirm Kittiratt's appointment as chairman of the Bank of Thailand's board, insiders suggest that it's all but certain. This potential appointment has stirred controversy, with critics fearing increased political manoeuvring within the independent institution. Concerns voiced by economists and former central bank governors focus on the integrity of monetary policy amidst such influences.

 

Since Pheu Thai assumed power in September 2023, their administration has frequently clashed with the Bank of Thailand. The government's core criticism lies in interest rates they consider overly restrictive, limiting economic mobility.

 

Kittiratt's previous tenure as finance minister under Yingluck Shinawatra (2012-14) was marked by similar conflicts with central bank leadership. His current remarks followed the central bank's decision to maintain the key interest rate at 2.25%, foregoing the anticipated cut many believed would bolster economic growth.

Though the central bank's Monetary Policy Committee opted to hold rates steady after an unexpected cut in October, Kittiratt remains steadfast. He acknowledged the committee's rationale while hinting at economic relief that could follow a rate reduction.

 

Regarding his expected new role, Kittiratt remained circumspect. While confident, he emphasised the limitations of the chairmanship. "If you trust in my ability to do a good job, I must fulfil expectations," he pledged, clarifying the role as primarily advisory rather than executive.

 

The Board of Governors at the Bank of Thailand includes three deputy governors alongside four external experts, chosen by the board itself, a process influenced by the board chairman. When the current governor, Sethaput Suthiwartnarueput, steps down in September 2025, Kittiratt's influence on selecting his successor will be significant.

 

Navigating these waters will require diplomacy and strategic foresight, balancing political objectives with economic stability, while engaging with concerned stakeholders wary of potential shifts in monetary policy dynamics. Kittiratt's approach to this delicate task could define his tenure and the economic trajectory of Thailand, reported Bangkok Post.

 

-- 2024-12-20

 

 

 

[flyingtlger]

As interest rates go up,

I owe, I owe, I owe,

So off to work, I go......unless I declare bankruptcy!

[natway09]

Interest rates are not going up, they are slowly coming down again.

This narrative explicitly demonstrates the need for the BOT to remain independent.

This guy is just pushing the political barrow of the the Phua Thai party & has no knowledge of the overall 

landscape or ramifications of what the Thaksin brigade is pushing for.

Thailand has already some of the lowest interest rates in the world

[Purdey]

Many middle-class Thais have been saving money in banks that offer almost no interest, and it looks like their savings will decline as inflation surpasses interest rates (depending on ow much the government wants interest to go down).

Without pensions here (except government employees), how are people supposed to save for retirement?

Encouraging more debt through low interest loans will do more to hurt than help.

If they want to lower lending rates, the least they can do is offer some kind of saving scheme with better, and low risk, returns for ordinary people.

[hotchilli]

8 hours ago, webfact said:

This potential appointment has stirred controversy, with critics fearing increased political manoeuvring within the independent institution.

For sure... a secured position to do Thaksins biding