Kittiratt’s exclusion as BOT chair disrupts the government’s economic plans
Office of the Council of State rules that his former positions as advisor to Srettha Thavisin and his position on debt oversight committee make his candidature ineligible
More than four months have passed since the start of the selection process for the new chairperson of the Bank of Thailand (BOT) Board, to replace Porametee Vimolsiri, whose term ended on September 16.
The nomination committee proposed Kittiratt Na-Ranong, a former deputy prime minister and finance minister for the position. The nomination was sent to the Office of the Council of State to review his qualifications, which include a requirement that the candidate must not hold a political position or must have been out of such a position for at least one year.
Two legal issues that required interpretation during the review process were whether Kittiratt’s role as chief advisor to former PM Srettha Thavisin and his position on the Debt Resolution Oversight Committee for Small-Scale Debtors fell under the definition of a political position.
The Council of State concluded that Kittiratt does not meet the qualifications to serve as chairperson of the BoT Board because his roles as chief advisor and Oversight Committee chair are considered political positions.
As a result, the selection process must now start over.
The government's inability to appoint Kittiratt as the central bank’s new chair is expected to impact its economic strategy, particularly in sourcing new funding to drive economic growth amidst significant fiscal constraints. The government cannot allocate substantial investment budgets, making the following four key tasks – initially anticipated for Kittiratt's leadership – more challenging.
Amending BOT legislation: The proposed amendment aims to transfer the Financial Institutions Development Fund (FIDF) debt from the Finance Ministry to the BOT's debt management account. This would allow the government to incur additional debt for economic policies while reducing public debt by approximately 5% of GDP. Such a move could provide greater flexibility for implementing government initiatives.
Utilising foreign reserves: Kittiratt previously suggested leveraging Thailand’s excessive foreign reserves, currently over $200 billion, to benefit the economy instead of leaving them idle. His ideas included establishing a Sovereign Wealth Fund (SWF) or investing the reserves in profitable ventures to generate revenue for the country.
Promoting digital currencies: Plans involved piloting digital currency use in initiatives like the Phuket Sandbox and developing stablecoins backed by government bonds. These initiatives align with ideas originally proposed by former PMThaksin Shinawatra and supported by Pichai Chunhavajira, Deputy PM and Finance Minister, who suggested studying the feasibility of such measures.
Reducing BOT's independence: Proposed legislative changes would align the BOT’s policies more closely with the government’s economic goals, such as lowering policy interest rates and managing the baht's value. The government views current BOT policies as obstacles to its economic agenda and seeks a monetary policy that supports economic growth more effectively.
