ROI ET – Prime Minister Srettha Thawisin confirmed on Monday that he has no plan to remove Mr. Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand (BOT), from his position, despite conflicts between the government and the BOT regarding the implementation of monetary policy.
During his visit to Roi Et province on May 6, Prime Minister stated that he had never pressured or talked about asking the BOT Governor to resign or be removed from his position. He emphasized that discussions with the BOT Governor would mainly focus on the work at hand.
The conflict arose from the BOT maintaining the interest rate at 2.5% since September 2023, despite the Prime Minister’s calls for a reduction in line with falling inflation rates.
It further escalated when Ms. Paetongtarn Shinawatra, the leader of the Pheu Thai Party, delivered a speech criticising the BOT on Friday, May 3. She argued that the law’s attempt to make the BOT independent from the government is a significant obstacle in solving the country’s economic problems.
“The fact that fiscal policy has been heavily used unilaterally all along has caused our country’s debt to increase every year due to deficit budgeting. If the monetary policy administered by the Bank of Thailand does not understand and cooperate, there is no way our country can reduce the debt ceiling,” said Paetongtarn.
After this speech was released, members of the Democrat Party and the Move Forward Party, who are in the opposition, as well as anti-government groups, attacked Ms. Paetongtarn, saying that she was threatening the independence of the Bank of Thailand. It has led to a trend on social media with the hashtag #saveBOTgovernor
“The Governor has nothing that needs to be saved. He came correctly and has duties to perform,” the PM said. He denied having any intention to amend the law to reduce the BOT’s independence.
Meanwhile, members of the Pheu Thai Party, including Mr. Bhumtham Wecchayachai, the Minister of Commerce, retorted that the Bank of Thailand is not an organization above the law that cannot be touched, and that Ms. Paetongtarn’s criticism was sincere.
PM Srettha stated that although monetary and fiscal policies may seem to be going in different directions, the government will try to manage these differences to solve problems for the people.
“I don’t deny that when interest rates are high, they should be reduced, but the BOT Governor says they are not high and should not be reduced. That’s clear, isn’t it? So, I went to find other ways to alleviate the suffering of the people by inviting representatives from the Thai Bankers’ Association and four commercial banks to discuss. This has resulted in a 0.25% interest rate reduction, for which I have thanked all the banks,” said Srettha.
He also confirmed that he would proceed with the digital currency project to stimulate the economy, despite the BOT sending two letters opposing the use of the project’s budget.
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