BOT panel agrees to rare meeting with Kittiratt
Thanong Khanthong
The Nation

BANGKOK: -- In spite of initial hesitation, members of the central bank's Monetary Policy Committee are likely to hold an unprecedented meeting today to discuss the exchange rate and monetary policy at Government House with Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong.

"At first, some members of the Monetary Policy Committee expressed their reluctance to join the meeting. But the Finance Ministry lobbied them hard in the afternoon (last Friday). So the meeting is likely to take place," a BOT source said.

Kittiratt has been campaigning vigorously for the Bank of Thailand and its governor, Dr Prasarn Trairatvorakul, to cut the interest rate steeply to stem capital inflows. The central bank's stance has been that the current 2.75 per cent policy rate was able to support economic growth and hold a check on inflation.

The row on monetary policy between the Finance Ministry and the BOT has seriously undermined the credibility of national macroeconomic management. It has also raised the possibility that political pressure is being applied to remove Prasarn from office after the central banklet the baht appreciate 5-6 per cent since the beginning of this year, with the baht touching Bt28.56 on April 22.

By inviting the seven members of the MPC to meet him and representatives of the private sector, Kittiratt is sending a signal he wants to exert influence over monetary policy.

Kittiratt wants the baht to stay above Bt29 to the US dollar and the BOT to cut interest rates by at least a full percentage point to narrow the gap between the Thai rate and the US rate, now at 0.25 per cent.

The seven-member MPC, an independent body that sets interest rate policy, will break with tradition if it goes ahead with the meeting at Government House, which is now keen to influence the direction of monetary policy. But in a Thai-style compromise, the source said the Monetary Policy Committee may find it all right to meet the minister to hear his opinion directly. Dr Prasarn will certainly attend the meeting and he is understood to hold no grudge if other MPC members also attend.

Earlier, Dr Ammar Siamwalla, the noted economist, and Somprawin Munprasert, deputy dean at Chula-longkorn University's Economics Department, supported the meeting between the Monetary Policy Committee and the Finance Ministry. They said it could lead to better understanding between the two parties.

-- The Nation 2013-05-13

By meddling in or trying to influence the MPC, Kittiratt is the biggest single threat to Thailands future economic stability.

Its cetainly nothing to do with the good of Thailands people!

This time Kittiratt is right. Too late maybe, but right. I'll also bet there is pressure from the auto manufacturers who have to export and be paid in baht.

Between the high baht and the new steep raise in the minimum wage, exporters are going to feel it. The government is going to feel it too because they get paid taxes on productivity.

This time Kittiratt is right. Too late maybe, but right. I'll also bet there is pressure from the auto manufacturers who have to export and be paid in baht.

Between the high baht and the new steep raise in the minimum wage, exporters are going to feel it. The government is going to feel it too because they get paid taxes on productivity.

It's 1:30am in Denver, best get some sleep!

.........this sounds very bad.........

I think you will find this all came about late Friday afternoon.

The lead up to this was first the yen cleared 100 to the dollar, partly due to Japanese engineering their economy and good figures coming out of the USA, then right on the heels of this the Vietnamese dropped their dong 3% points to keep their exports alive and kicking.

So Friday afternoon saw a few backsides puckering in BKK.

It's never a good idea for any government to interfere with the independence of the central bank.

It is worse here because the current regime don't want any type of independent thought (to the Dubai orders) or agency.

Governments politicians shouldn't be allowed to form a central bank that doesn't answer to voters. That takes the heat off the elected people who can blame everything on the bank. It also make the bank able to screw up as they are doing with no accountability.

The strength of the US economy and the value of the dollar has done nothing but go to hell since the Fed was formed 100 years ago. These are the people who can decide how much fiat money to print etc., and they answer to no one?

I think you will find this all came about late Friday afternoon.

The lead up to this was first the yen cleared 100 to the dollar, partly due to Japanese engineering their economy and good figures coming out of the USA, then right on the heels of this the Vietnamese dropped their dong 3% points to keep their exports alive and kicking.

So Friday afternoon saw a few backsides puckering in BKK.

Yup, Vietnam joined the currency war by dropping their interest rates on Friday:

http://www.bloomberg.com/news/2013-05-10/vietnam-cuts-interest-rates-as-global-monetary-easing-spreads.html

"Policy makers around the world have moved to counter currency appreciation and stimulate growth, with Sri Lanka cutting rates more than estimated today and the Bank of Koreaunexpectedly lowering borrowing costs yesterday, following the lead of Australia, Europe and India this month."