Thaksin fires central bank governor

BANGKOK (AFP): The government of Thaksin Shinawatra today sacked Bank of Thailand governor Chatumongkol Sonakul following a week-long wrangle over interest rate policy, a senior official said. “This change is to enhance the efficiency of the government’s work,” government spokesman Yongyuth Tiyapairat told reporters after a cabinet meeting in which the decision was made to get rid of Chatumongkol. Public relations department director-general Veeraphol Duangsoongnern said highly regarded Import-Export Bank president Pridiyathorn Devakula had been appointed to replace Chatumongkol. Prime Minister Thaksin Shinawatra has also recently given Pridiyathorn the job of steering the Thai Asset Management Corp, which is to take over responsibility for banks’ bad loans. The public row between the government and the central bank erupted a week ago when Thaksin ordered a review of the low interest rate policy, which he believes is encouraging capital outflows and weakening the baht. The central bank governor rejected the prime minister’s attempt to intervene in Bank of Thailand policy and insisted that raising interest rates would not help kick-start the sluggish economy. “The reason the government decided to sack Chatumongkol is that it wants people who can work together as a team,” said Suranand Vejjajiva, a spokesman for Thaksin’s Thai Rak Thai party. Instead of putting forward his views within the cabinet, Suranand told reporters, Chatumongkol had opted to fight his battles through the press and by lobbying investors. “We think Pridiyathorn will be able to work as part of a team,” he said. Thaksin, who believes that forthcoming fiscal stimulus measures will be useless if capital continues to pour out of the country, said earlier today that the conflict was hampering government attempts to revive the economy. “The problem is that we have so many problems to solve, but instead of solving problems we first have to solve conflicts, which is not good,” he said.

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