Bangkok Governor Pick Fuels Thailand’s Central Bank Independence Debate
Bangkok—Somchai Sujjapongse, a government-backed candidate, has emerged as the frontrunner for the Bank of Thailand (BoT) board chairmanship, according to anonymous sources close to the government who spoke to Reuters. This appointment follows a turbulent selection process marked by concerns about potential political interference in the central bank’s operations.
Mr. Sujjapongse, a former permanent secretary for the Ministry of Finance, was selected by an independent panel on Friday. His candidacy follows a controversial, ultimately unsuccessful attempt last year to install Kittiratt Na-Ranong, a prominent member of the ruling Pheu Thai Party and former finance minister. This nomination sparked widespread apprehension among former central bank governors and economists, who feared a compromise of the BoT’s independence.
The BoT chairmanship is significant due to its influence over the monetary policy committee’s composition. While the chair does not directly dictate monetary policy, they preside over the board responsible for selecting four of the committee’s seven members. These four members, along with the governor and two deputy governors, shape the country’s monetary policy. The selection process for a new central bank governor is also expected later this year, further complicating the evolving financial landscape.
Mr. Sujjapongse prevailed over two other candidates: Surapon Nitikraipot, former head of Thammasat University and the central bank’s own nominee. This underscores the government’s apparent determination to influence the BoT’s leadership. The appointment, however, is not yet finalized, awaiting cabinet and royal approval.
Government interventions in the central bank’s affairs have drawn significant attention, particularly following repeated calls for interest rate cuts. These requests fueled speculation about potential tensions between the government’s economic agenda and the central bank’s mandate to maintain price stability and financial system soundness. The government has consistently maintained its respect for the BoT’s independence and denied exerting undue pressure.
The panel’s initial selection of Mr. Kittiratt last year further highlights the process’s complexities. The Council of State later deemed this choice invalid due to Mr. Kittiratt’s recent political activities, considered incompatible with the position’s requirements. This intensified concerns about the government’s intentions regarding the central bank’s autonomy.
Mr. Sujjapongse’s appointment as chairman, while a step forward, is likely to remain under scrutiny. Observers will closely monitor the government’s evolving relationship with the central bank under his leadership and its implications for Thailand’s economic future. The upcoming selection of a new governor will undoubtedly add another crucial element to this complex situation.
