Prime Minister Srettha Thavisin says he will meet the Bank of Thailand (BoT) governor to discuss the central bank's strategy to raise the policy rate.
The prime minister has voiced his opposition to the policy, saying it will cause problems for the poor, as well as small- and medium-sized businesses.
In a post on X on Sunday night, Mr Srettha noted the central bank is planning to raise its policy rate even though there has been negative inflation for months.
The increase will not benefit the economy and adversely affect low-income earners and SMEs, he said.
He said the Commerce Ministry and other relevant agencies must ensure proper prices for agricultural products, as many are still being sold at very low prices.
"I hope the BoT will help take care of the people and not raise interest rates considering the situation," he wrote.
During a visit to the Royal Thai Police on Monday, the prime minister reiterated his opposition to the BoT's plan to raise interest rates.
"I would like to say that as [inflation] is very low, an interest rate reduction should be considered instead," Mr Srettha said.
Mr Srettha, who is also serving as finance minister, said he would discuss the issue with BoT governor Sethaput Suthiwartnarueput.
However, Mr Srettha has not yet fixed the date of the meeting.
The prime minister's chief adviser, Kittiratt Na-Ranong, said on TV on Monday that a substantial and quick interest reduction is the way out of economic problems, and the BoT should support the government's policies.
Increasing interest rates provides an opportunity for banks to gain more revenue, as generally, loan interest goes up much faster than deposit rates, he said.
"Under the law, the agency [the BoT] which supervises and regulates commercial banks should work independently. But I think people in society have begun to realise such supervision does not benefit them," Mr Kittiratt said.
Mr Kittiratt said that all eyes will be on the BoT's monetary policy committee (MPC) when it meets on Feb 7.
The MPC has raised the policy rate eight times, from 0.50% in August 2022 to 2.50% in September last year, in an effort to control inflation, which peaked at 8% in 2022.
On Nov 29 last year, the MPC decided to keep the rate at 2.50%, saying the rate was suitable given the nation's economic fundamentals and rate of recovery, which reflect economic growth potential.
The BoT is independently responsible for managing the nation's monetary policy, mainly the management of interest rates and the total supply of money in circulation.
The government, meanwhile, is in charge of fiscal policy and has the authority to raise and spend taxes and seek out loans.
Deputy Prime Minister and Interior Minister Anutin Charnvirakul weighed in on the matter on Monday, saying all businesses, including commercial banks, strive for profits.
But banks do not gain profit from interest rates alone, but also from investment and the value of the currency, he said.
"We have to look at the actual figures to get an idea of the nation's economic stability. Just because a business is losing money doesn't mean the entire economy is in bad shape," he said.
Separately, Senator Sathit Limpongpan said the BoT, which is responsible for supervising commercial banks, must ensure there is a balance between the growth of financial institutions and the quality of the services people receive from them.
"The BoT must ensure fair competition among banks and justice for consumers," Mr Sathit said.
"Intense competition among banks will benefit consumers, but it is necessary for the BoT to respond to people's needs by expanding access to funding," the senator added.
Sethaput: Plans to raise policy rate