A new chairman for the Bank of Thailand board is to be appointed by early October, according to the head of the selection committee, as the government seeks more influence over the central bank in the wake of a long-running public disagreement over interest rates.
While the BoT chairman can’t direct interest rates, the board they head selects the monetary policy committee, comprising the BoT governor, two deputy governors and four outside experts.
Since it took power last year, a government led by the populist Pheu Thai party has repeatedly asked the BoT to cut its key interest rate — a call that has, so far, gone unheeded.
Struggling to revive Southeast Asia’s second-largest economy, Pheu Thai leader Paetongtarn Shinawatra — who took office as prime minister last month — has previously described the BoT’s independence as an “obstacle”.
“The criteria and qualifications for the position have been set, and the finance ministry and central bank will send in names,” Sathit Limpongpan, the head of the selection committee, told Reuters.
Under existing rules, the Ministry of Finance will nominate one candidate and the central bank is to put forward two names to succeed Porametee Vimolsiri.
The nominations will then be sent to the BoT for qualification checks, followed by a selection committee meeting in late September or early October to choose the new board chairman, said Mr Sathit, a former finance ministry permanent secretary.
The selected candidate will have to be approved by the finance minister before their name is forwarded for cabinet approval and royal endorsement, Mr Sathit said, adding that his committee would also select two new board members.
Mr Porametee, whose second term ends this month, was appointed in 2018 by the Prayut Chan-o-cha government, which also chose the current BoT governor, Sethaput Suthiwartnarueput.
Mr Sethaput has said the bank can work with the government and is ready to adjust policy if needed.
Despite government calls for an easing, the BoT has kept its benchmark interest rate unchanged at a more than decade-high of 2.50%, saying the level remains consistent with its growth and inflation outlook. The central bank, which next reviews rates on Oct. 16, has said it is ready to adjust policy if needed.
Finance Minister Pichai Chunhavajira and Mr Sethaput will meet this month to open negotiations on an inflation target for 2025, with the government seeking a new goal with an eye on a rate cut as inflation is running below target.
The current inflation target range of 1% to 3% has been effective in anchoring inflation expectations and in handling price shocks, minutes of the BoT’s Aug 21 policy meeting showed on Wednesday.