Thailand appoints new central bank boss

BANGKOK (AFP) -- Thailand appointed a new governor of its central bank on Tuesday to steer the country's economy as it emerges from the global financial crisis and the worst domestic political unrest in decades.

Prasarn Trairatvorakul, president of Bangkok's third-largest commercial bank Kasikornbank, was approved by the cabinet to take the helm of the Bank of Thailand (BOT) when the current governor retires at the end of September.

"I expect him to preserve the independence of the BOT and to execute the Bank's mission -- that is, to maintain stability and to counter political influence on monetary policy," Prime Minister Abhisit Vejjajiva told reporters.

Harvard-educated Prasarn, 57, was the favourite of four candidates to head the Bank, which has left its key interest rate unchanged at a record low of 1.25 percent since April 2009, citing economic and political risks.

Prasarn, who is also executive director of the Thai Bankers' Association, previously worked at the BOT for nine years from 1983, before spending 11 years at the Securities and Exchange Commission, where he became secretary general.

"The reason that Prasarn was chosen is because he had experience not only with the Bank of Thailand but also with the Securities and Exchange Commission, and he was widely accepted at both places," Abhisit said.

The current bank chief Tarisa Watanagase said her successor would have to deal with the fluctuating exchange rate after the world economic crisis.

"It will be good as Prasarn has experience with commercial bank credit approval, so he understands and has a different approach," she said.

Tarisa also praised the transparency of the selection process for the job, which was decided by committee rather the finance minister alone.

The Thai economy, in particular its vital tourism sector, has seen its growth stunted by two months of anti-government protests in Bangkok that resulted in several outbreaks of deadly violence.

But strong overseas demand has cushioned the blow. For the first five months of 2010, exports rose 34.5 percent from a year earlier to 75.0 billion dollars.

Last week the Thai government said the economy remained stable as official data showed the country's inflation rate slowed marginally in June.

-- (c) Copyright AFP 2010-07-06

Will be interesting as to his policy on the baht exchange rate and funds flow. That is, how the BOT will intervene in/moderate the baht exchange rate, controls for inflow & outflow of funds, etc.