Any delays in selecting a new board chairman for the Bank of Thailand is unlikely to impact the central bank's operations and overall banking industry, as the chairman's role primarily focuses on internal operations rather than shaping the bank's policies, according to experts and economists.
MORE POLITICAL ISSUES
Pipat Luengnaruemitcha, managing director and chief economist at Kiatnakin Phatra Financial Group (KKP), said the selection and appointment process for the central bank's chairman would not impact the bank's operations, as the post plays a key role in internal matters rather than in shaping the bank's policies.
"The delay in the process is more of a political and legal issue than a matter of policy management for the Bank of Thailand, so it will not impact economic and monetary policies," Mr Pipat said.
Mr Pipat said disqualifying Kittiratt Na-Ranong from the race to become central bank chairman would alleviate concerns about political connections and interference.
Jitipol Puksamatanan, head of investment strategy at Finansia Syrus Securities Plc, said investors concerned about the central bank's independence might feel relieved after the Council of State disqualified Mr Kittiratt from being appointed.
"I personally do not pay attention to this issue because most of us know that the board's chairman does not influence the central bank's policies. I have no idea why those behind Mr Kittiratt's appointment pursued this move, which sparked public interest and complaints. Now, it's over," he said.
However, Mr Jitipol does not expect the pressure from the political side to ease, especially regarding the central bank's alignment with government demands.
"We've heard repeatedly from the Finance Ministry and other government allies about what the Bank of Thailand should do, including how to use the country's international reserves for government purposes. These calls will continue even after Mr Kittiratt's disqualification," he noted.
At the same time, he said the central bank should not be "too independent" and must effectively address inflation to support the country's economic performance.
Mr Jitipol emphasised that the new candidate for the position of board chairman should have a solid understanding of both fiscal and monetary policies, and should not have a "hidden agenda".
Suwat Wattanapornprom, an analyst with Krungsri Securities, said the capital market would closely monitor new candidates for the position.
"We hope the person who takes this role can act as a bridge between the central bank and the government, ensuring both sides can perform their duties coherently and flexibly," he said.
"The conflicts between the government and the Bank of Thailand benefit no one," said Mr Suwat. "Sometimes, monetary policy is too tight, while government policies pose risks to fiscal stability. Hopefully, the new chairman can help create a balance between monetary and fiscal policies."
DELAYS AND CONTROVERSY
The selection process for a new board chairman of the central bank has been marked by delays and controversy.
Scheduled meetings were postponed amid rising concerns over potential political interference after reports suggested the government intended to propose its own candidate to succeed Porametee Vimolsiri, whose term ends next October.
Mr Kittiratt, a former commerce minister, was widely regarded as being a leading contender for the position.
He previously served as deputy leader and chief economic strategist for the Pheu Thai Party. He has been critical of the central bank's interest rate policy and its regulatory independence.
Mr Kittiratt was previously nominated as an advisor to former premier Srettha Thavisin.
The selection committee, chaired by Satit Limpongpan, had to postpone its meetings to choose the new chairman three times, inititially on Oct 8. The process culminated in a final meeting on Nov 11, which ironically concluded without revealing the name of the selected candidate.
Although the committee has not officially disclosed the name of the new chair, Mr Kittiratt remains highly likely to be appointed as expected.
There were three candidates for the position. The Finance Ministry proposed Mr Kittiratt, while the central bank nominated Kulit Sombatsiri, a former energy permanent secretary, and Surapon Nitikraipot, president of the Thammasat University Council and an independent director of PTT Plc.
However, the selection process took another turn on Tuesday when reports indicated that the Council of State determined Mr Kittiratt is unqualified for the position due to a recent advisory role.
Finance Minister Pichai Chunhavajira said on Tuesday that he is personally awaiting an official response letter from the Council of State regarding the interpretation of Mr Kittiratt's qualifications as a candidate for the chairman of the central bank's board of directors.
It is expected that the Council of State will send the letter within the next one to two days, he said.
"Assuming the qualifications are not met, discussions will need to take place, and a new candidate should be proposed promptly. I believe the selection committee is already prepared to proceed. As for whether an alternative candidate needs to be proposed, there are already regulations in place for this," he said.
A source from the Finance Ministry who requested anonymity said the Finance Ministry is also waiting for an official response letter from the Council of State regarding the interpretation of Mr Kittiratt's qualifications, to determine whether he meets the requirements for the position of chairman of the central bank's board of directors.
The ministry is also awaiting clarification on the nomination committee's approach, which must follow the legal procedures.
