(Bloomberg) — Thailand is set to appoint former Finance Minister Kittiratt Na-Ranong as the new Bank of Thailand chairman, a sign of the government seeking to tighten its grip over the central bank with which it has sparred over monetary policy and inflation targets.
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Kittiratt, a critic of the BOT’s hawkish monetary policy and a former member of the ruling Pheu Thai party, was picked as the new chairman at a near five-hour meeting of the selection panel on Monday, according to people familiar with the matter. Thai media earlier reported that Kittiratt was selected.
Sathit Limpongpan, who headed the committee to select the new BOT chair, said a decision was made on Monday. He didn’t disclose who was picked, saying in a statement that the cabinet and Thailand’s monarch would have to endorse the decision.
Pornchai Thiraveja, a spokesman for the Ministry of Finance, couldn’t be immediately reached for comments.
While the BOT chairman doesn’t decide on policy, Kittiratt will have a say in who joins the Monetary Policy Committee and can assess the performance of the governor. He was nominated by Prime Minister Paetongtarn Shinawatra’s government that has kept on pushing the central bank to cut rates even after it surprised markets last month by lowering costs for the first time since 2020.
The baht fell as much as 1.1% against the dollar on Tuesday and was the worst-performer among Asian emerging market currencies after the dollar index rallied for a third day. Foreign funds have pulled a net $1.8 billion from Thai bonds so far in the fourth quarter, dragging the baht down around 7% during the period.
Kittiratt has slammed the monetary authority for not lowering rates to boost growth when he served as an economic adviser to Srettha Thavisin before he was ousted as prime minister earlier this year. When Kittiratt was finance minister in Yingluck Shinawatra’s cabinet in 2013, he also publicly pressured then-central bank chief Prasarn Trairatvorakul to cut rates.
If confirmed, Kittiratt’s appointment increases the risk of more rate cuts by the central bank compared with Nomura Holdings Inc.’s baseline forecast of one more 25 basis point cut in December, economist Euben Paracuelles said.
Although the timing of the next cut remains uncertain, “it’s possible the BOT may be more aligned with the government in terms of providing support to the economy,” he said.