Views of Finance Ministry, BoT more harmonised
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Views of Finance Ministry, BoT more harmonised

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Deputy Finance Minister Paopoom Rojanasakul
Deputy Finance Minister Paopoom Rojanasakul

The economic perspectives of the Finance Ministry and the Bank of Thailand are becoming more aligned, says Deputy Finance Minister Paopoom Rojanasakul.

Speaking after discussions between the finance minister and the governor of the central bank last Friday, Mr Paopoom said the results were positive, with a greater mutual understanding and a more similar economic outlook.

He said the central bank acknowledged the ministry's concerns, including the baht's volatility, as the currency has been stronger than other regional currencies, inflation targets, and the spread between deposit and loan interest rates.

Mr Paopoom said the ministry expects these factors to be discussed at the Monetary Policy Committee meeting to provide more comprehensive information for decision-making regarding interest rate adjustments.

Although the decision is at the committee's discretion, the ministry has communicated its views and will respect the process, he said.

Regarding the inflation target, Mr Paopoom said there are two dimensions: first, whether the target is appropriate, and second, what actions should be taken if inflation falls outside the target range.

In terms of selecting a new central bank chairman, Mr Paopoom said he would not discuss specific individuals or the selection process, as the appointment should be based on a thorough consideration of knowledge, skills, experience and expertise in both financial and fiscal dimensions.

He said financial and fiscal policies are inseparable, and the suitable candidate should have a balanced view of both aspects.

A purely financial expert might only focus on financial matters, while a fiscal economist might have an incomplete perspective. The selected official should be well-rounded and comprehensive, said Mr Paopoom.

He urged close cooperation between the central bank and the ministry, acknowledging that while differences of opinion may arise, working together facilitates an exchange of ideas.

"Regardless of who becomes the new central bank chairman, the Finance Ministry and the Bank of Thailand still need to align, discuss and exchange views to ensure they share the same economic outlook," said Mr Paopoom.

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