BANGKOK – The Monetary Policy Committee (MPC) of the Bank of Thailand (BoT) voted 5 to 2 to keep the policy interest rate at 2.50 percent in the meeting on February 7, 2024, while the National Anti-Corruption Commission (NACC) held a press conference to present the suggestions that appear to oppose the government’s 10,000 baht digital wallet scheme.
Both are not good signs for the government.
Throughout the 5-month work of the government led by the Pheu Thai Party cannot drive the digital wallet policy to stimulate the economy after facing clear objections from the independent organisations.
Prime Minister Srettha, who is also the finance minister, has been at odds with the central bank over the path of monetary policy, claiming that the economy required support and that inflation was not a threat.
Previously he suggested the MPC should consider cutting interest rates by 0.25% because interest is a serious issue affecting people’s spending and should be addressed as soon as possible to avoid deflation.
The result of constant interest rates at 2.50 instead of 2.25 on Wednesday, therefore, shows the BoT does not work as a team with the government.
“As I mentioned yesterday, we want to see monetary and fiscal policy operate together. And now we’ve had minus inflation for four months. When asked if I agree with the MPC, I must respond that I disagree. But I do not have the authority to interfere. The MPC can enact monetary policy independently,” said the prime minister.
However, he has not mentioned BoT Governor Sethaput Suthiwartnarueput, whose Pheu Thai Party supporters called for his removal.
At the same time, Srettha stated that he listened to the NACC’s advice and observations regarding corruption. The NACC’s duty is to investigate corruption and misbehaviour, while the government is responsible for implementing policies.
“As I discussed about the vulnerable category of individuals, if you earned 20,000 baht but have a lot of debt, would you claim that you are also fragile and want the same stimulation? “This is also a sensitive matter,” the Prime Minister stated after the NACC had announced its suggestion.
The NACC secretary general, Niwatchai Kasemmongkol, stated during the press conference that the NACC has no mandate to stop the government from going ahead with the 10,000 baht digital wallet handout scheme but warns that the government could be breaking the law, unduly benefiting certain groups, and that the nation is not in an economic crisis to be in need of such a scheme.
Among the eight suggestions presented at the press conference were for the Srettha administration to thoroughly analyse and analyse if certain groups of politicians, political parties, or individuals will unfairly gain from the system. The NACC proposed that the government only assist vulnerable groups.
Niwatchai also asks the Election Commission to look into whether the Pheu Thai Party’s campaign promises on the issue actually matched the government’s policy announcement or not. He adds that the government could focus on helping those who are truly needy instead.
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