Cabinet reiterates BoT has free rein for its duties

Cabinet reiterates BoT has free rein for its duties

The government has pledged it will not intervene in the central bank's handling of inflation, interest rates and the baht's movement, instead asking the Finance Ministry to provide additional information to the bank.

According to government spokesman Anucha Burapachaisri, Prime Minister Prayut Chan-o-cha said at the weekly cabinet meeting yesterday the government is giving the Bank of Thailand a free hand in conducting its traditional tasks.

The Thai currency has depreciated 20% against the US dollar since the end of 2020, resulting in growing calls for the Bank of Thailand to reconsider its stance.

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said late last month the Bank of Thailand needs to determine an appropriate policy rate amid growing concerns the baht may fall to 39 to the greenback.

The plunge in the baht's value not only worries importers of oil and raw materials, but it could also complicate the country's trade deficit, said Mr Kriengkrai.

Chaichan Chareonsuk, chairman of the Thai National Shippers' Council, said on Tuesday the baht's value during the fourth quarter is expected to average 37-38.50 to the US dollar, though it could weaken past that level if the US Federal Reserve continuously raises its policy interest rate, strengthening the greenback.

In a related development, deputy government spokeswoman Rachada Dhnadirek said yesterday the cabinet approved an allocation of 422.75 million baht from the central budget for fiscal 2023, which starts this month, to support the nationwide price reduction programmes proposed by the Commerce Ministry.

The schemes offer discounts on daily consumer products such as pork, chicken, eggs, agricultural products and fruit supplied by producers' associations, suppliers and farmers in each province.

The ministry plans to provide a place to set up 100-200 booths to sell discount products in communities, district offices, housing projects, provincial commercial offices or suitable community areas.

The ministry wants to organise at least 274 events this month.

In addition, the cabinet approved the debt-ridden State Railway of Thailand borrowing 15.2 billion baht in fiscal 2023 to ease its tight liquidity, and another 1.5 billion in short-term loans.

The Finance Ministry will act as the guarantor for the SRT to ensure banks approve the SRT's loan applications, said Ms Rachada.

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