Thai PM denies plans to limit Bank of Thailand governor’s powers

Thailand Prime Minister Srettha Thavisin dismissed any intention of modifying the law to restrict the authority of the Bank of Thailand’s (BoT) governor amidst a disagreement over the central bank’s interest rate policy.

Responding to queries about potential amendments to the Bank of Thailand Act to limit the governor’s powers, the 62 year old Thai prime minister assured that such thoughts were never entertained.

“Such a thought never occurred to me. The responsibility for addressing this issue lies with the Finance Ministry. I never asked the BoT governor to step down. I never imposed any pressure on him. However, I cannot predict what the future holds. The Finance Minister (Pichai Chunhavajira) should be the one to answer this.”

The Bangkok-born PM continued, saying that the BoT governor prefers to avoid direct communication with him, suggesting that governmental coordination with the BoT should be conducted through the State Enterprise Police Office of the Finance Ministry.

“I have respected his wishes.”

PM Srettha insisted that there is no ongoing conflict between him and the BoT governor and that he is not contesting the BoT governor.

“My fight is against the poverty of the people, which in part, arises from high interest rates.”

Finance minister

The Thai prime minister previously voiced plans to engage with the newly appointed finance minister to enhance coordination and efficiency with the central bank.

Previously, PM Srettha had supported Pheu Thai leader Paetongtarn Shinawatra, who took issue with the central bank’s stance on interest rates.

At a Pheu Thai event last Friday, Paetongtarn criticised the BoT for its refusal to succumb to continuous appeals for reducing interest rates.

She declared that the law that maintains the independence of the Bank of Thailand from the government is a hindrance and a significant obstacle in resolving economic issues.

Paetongtarn also expressed concern over the country’s heavy reliance on fiscal policy to bolster the economy, resulting in considerable public debt and budget deficits.

She mentioned that if the BoT fails to understand and collaborate with the government in its efforts to tackle economic issues, we will not succeed.

The government has persistently encouraged the BoT to reconsider its interest rate policy and lower the benchmark rate to stimulate the economy. The Thai PM previously mentioned that the current rate of 2.5%, a 10-year high, is detrimental to the public and may intensify the nation’s high household debt, reported Bangkok Post.