Prime Minister Srettha Thavisin's decision to meet key figures from Thailand's major commercial banks to discuss the possibility of cutting interest rates last week raised a lot of eyebrows. It was highly unusual for a prime minister to appeal directly to commercial banks to change interest rates, as the nation's financial institutions generally follow the rates prescribed by the Bank of Thailand (BoT).
However, Mr Srettha managed to get the chief executives of Thailand's four largest banks -- Bangkok Bank, Kasikornbank, Krungthai Bank and Siam Commercial Bank -- to back his push to reduce interest rates in an effort to boost economic activities.
Just one day later, the Thai Bankers' Association announced a 0.25% reduction in their minimum retail rate (MRR) for six months, which it said was in line with the PM's call to help small businesses and vulnerable individuals.
The government -- Mr Srettha in particular -- has repeatedly cajoled the BoT to cut its policy rate, without success. The former real estate mogul has on different occasions urged the BoT to reconsider its policy rate, which he said caused hardships among small businesses and individual borrowers, due to the significant gap between the deposit and lending rates.
It remains to be seen whether the fractional cut by commercial banks will ease lenders' hardship. The prime minister had already ordered state-run banks to reduce their interest rates, and the move barely caused a splash.
While some may perceive the government's actions as aggressive, and possibly as an unwarranted market intervention, most people are simply confused by the central bank's decision to continue resisting the government's pressures.
Is it really because the BoT is acting in the best interests of the public? If so, it needs to come up with an explanation as to why it keeps resisting the demands of a democratically-elected government.
As a highly-trusted independent body, the BoT's decisions and policies are grounded in economic data. However, the public may not see it that way, especially when the government, including the prime minister, continues to pile on the BoT over its alleged lack of awareness of the economy and people's hardships.
Right now, the public is only receiving limited, non-technical information from the central bank explaining its decisions to go against the government's demands.
The government has made a point of saying BoT's refusal to reduce the rate is causing widespread economic hardship.
It says PM Srettha's lobbying of the commercial banks is "addressing public hardships". It won't be a surprise if the BoT becomes the next scapegoat for the nation's problems, given the narratives.
It's not good for the country if the public sees the central bank as oblivious to their hardship. After all, BoT's main task is to maintain the stability of the financial system and by issuing sound economic and monetary policies.
The BoT should communicate more actively with the public. It should not fear that it will be perceived as challenging the government. Being trusted alone is not enough; the central bank's decisions must be understood by public.
Without good communication, public trust in the Bank of Thailand will decline, undermined by its own silence and one-sided criticism from politicians in the government.