Pheu Thai Party leader Paetongtarn Shinawatra said on Friday that the Bank of Thailand’s independence was an “obstacle” in resolving economic problems, the latest salvo in an ongoing row over interest rates.
The daughter of paroled former premier Thaksin Shinawatra was weighing in on a disagreement that has been going on since last year between Prime Minister Srettha Thavisin and the central bank, which has refused to bow to his constant pressure to cut rates.
“The law that keeps the Bank of Thailand (BoT) independent from the government … is a problem and a significant obstacle in fixing economic problems,” Ms Paetongtarn told party members at an event held at Pheu Thai headquarters on Friday.
Mr Srettha maintains an interest rate at a decade high of 2.50% was hurting small businesses and hurting government efforts to jumpstart an economy he says is in crisis. The premier insists, however, that he respects the BoT’s independence.
Ms Paetongtarn, who many believe will someday take over as premier — possibly even before the current four-year term of the government ends — said BoT monetary policy “refuses to understand and cooperate” and would hamper efforts to reduce high levels of debt.
The central bank declined to comment on Ms Paetongtarn’s remarks when contacted by Reuters.
Governor Sethaput Suthiwartnarueput said on Monday that the BoT would not bow to pressure. He told CNBC the current interest rate was appropriate for the economy and any short-term boost a rate cut could give was “not an efficient trade-off” when weighed against longer-term unintended consequences.
Comments from Ms Paetongtarn carry weight, though, given that her billionaire father is widely believed to be still calling the shots in the party she leads.
In his first term in office, Thaksin sacked a central bank governor over monetary policy disagreements.