BANGKOK : Thailand’s central bank should manage the strengthening baht to better support exports and take actions that put the country first, its commerce minister said on Thursday, in another rebuke from a government pushing hard for an interest rate cut.
Pichai Naripthaphan said exports, a key driver of the economy, could be impacted over the next three months due to the rapid appreciation of the baht and urged the central bank to do more to keep it in check.
The baht rallied to a 30-month high this week, trading at 32.7 against the dollar. Pichai said 35 to the greenback was appropriate.
“The Bank of Thailand (BOT) should stop creating division and place the country’s interest first,” he said, without elaborating.
His comments were the latest salvo from the government ahead of a meeting next week between the finance ministry and central bank to discuss the inflation target and currency strength. The government is expected to again press its case for monetary easing.
Reuters first reported the plan for the meeting in August.
Finance Minister Pichai Chunhavajira said interest rates should support government stimulus measures while the inflation range should help a higher inflation rate.
Governments led by the populist Pheu Thai party have since last year said a rate cut was necessary to revive Southeast Asia’s second-largest economy, which is expected to grow 2.6 per cent, up from 1.9 per cent last year.
It has said Thai rates should follow a global easing trend.
The central bank has resisted government pressure and in August held rates steady at a decade-high of 2.50 per cent for a fifth consecutive meeting. Its next review is on Oct. 16.
BOT chief Sethaput Suthiwartnarueput last week said there was no need for a cut following the Fed’s easing and maintained that though such a move could give a short-term boost to the economy, it could bring negative consequences.
Before she became prime minister, Paetongtarn Shinawatra called central bank independence an “obstruction” to solving economic problems.
Paetongtarn, 38, is the daughter of the influential Thaksin Shinawatra who was premier to 2001 to 2006 and often had disagreements with the central bank, one that led to the sacking of a governor.
Pichai, the commerce minister, said the government understood the need for the institution to be independent but urged it to take a different tack.
“We respect independence, but it has to be an independence that helps the country develop and not get in the way of everything,” he said.
