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Thai central bank can work with finance ministry, says governor By Reuters


Thai central bank can work with finance ministry, says governor By Reuters

By Kitiphong Thaichareon

BANGKOK (Reuters) – Thailand’s central bank is ready to cooperate with the finance ministry despite differing views on certain issues, its governor said on Saturday.

Prime Minister Paetongtarn Shinawatra, who was sworn in last week, described the central bank’s independence as an “obstacle” to economic growth.

Paetongtarn’s predecessor, Srettha Thavisin, was dismissed as prime minister by court order. Srettha, who belongs to the same political party as Paetongtarn, had repeatedly called on the central bank to cut interest rates to stimulate growth.

“With our independence comes responsibility,” Bank of Thailand Governor Sethaput Suthiwartnarueput said at a press conference, adding that the BOT is ready to cooperate with anyone.

On Wednesday, the central bank left its benchmark interest rate unchanged for the fifth consecutive month, saying the current level was neutral while it waits to see whether Paetongtarn would change Thailand’s economic policy.

“We are prepared to make adjustments that are appropriate to the situation,” Sethaput said. “If the outlook changes, we are prepared to adjust policy rates.”

Paetongtarn said she would continue the government’s flagship 500 billion baht ($15 billion) cash withdrawal program for digital wallets but would review it.

© Reuters. FILE PHOTO: Thailand's central bank at the Bank of Thailand in Bangkok, Thailand, April 26, 2016. REUTERS/Jorge Silva/File Photo

Thailand’s economy grew 2.3 percent in the April-June quarter from a year earlier, an acceleration from 1.6 percent growth in the previous three months, but analysts said fiscal uncertainty was clouding the outlook.

Sethaput said the economic and inflation outlook was in line with forecasts. In June, the central bank had forecast economic growth of 2.6 percent this year, after only 1.9 percent growth last year, which lagged behind regional peers.

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