Thai Central Bank Can Collaborate with Finance Ministry, Governor States – Reuters

By Kitiphong Thaichareon

BANGKOK – The governor of Thailand’s central bank has expressed the institution’s willingness to collaborate with the finance ministry, despite differing perspectives on certain issues.

Prime Minister Paetongtarn Shinawatra, who took office last week, has labeled central bank independence as a "hindrance" to economic growth. Her predecessor, Srettha Thavisin, who was recently removed from office by a court ruling, consistently advocated for interest rate cuts to facilitate economic growth. Notably, both leaders are affiliated with the same political party.

"Our independence comes with accountability," stated Bank of Thailand Governor Sethaput Suthiwartnarueput during a press conference. He emphasized that the central bank is open to working with any stakeholder.

On Wednesday, the central bank decided to maintain its key interest rate for the fifth consecutive meeting, deeming the current level neutral as it observes potential changes in Thailand’s economic policies under the new administration.

"We are prepared to make adjustments that are appropriate to the situation," Sethaput noted. "If the outlook shifts, we are ready to modify policy rates accordingly."

Paetongtarn has indicated her intent to continue with, but reassess, the government’s popular digital wallet cash-handout initiative, estimated at 500 billion baht ($15 billion).

Thailand’s economy showed growth of 2.3% in the April-June quarter compared to a year earlier, marking an acceleration from the previous quarter’s 1.6% growth. However, analysts caution that uncertainties surrounding fiscal policy could impact the future outlook.

Sethaput remarked that the economic and inflation forecasts remain consistent with expectations. In June, the central bank projected a growth rate of 2.6% for the year following a 1.9% expansion last year, which was slower than that of regional counterparts.