Kittiratt Na Ranong Poised for Bank of Thailand Chair: Policy Shifts Ahead?

Thailand’s former deputy premier and finance minister Kittiratt Na Ranong (Photo: Government House)

The Thai government is gearing up to nominate a devoted member of the ruling party, known for his strong views on the central bank’s policies, to the prestigious position of chair of the Bank of Thailand (BoT). This move, aimed at consolidating control over the central institution amidst a longstanding tug-of-war over interest rates, comes straight from two insiders.

Enter Kittiratt Na Ranong, a 66-year-old former deputy premier and finance minister, who has the backing of the Pheu Thai Party-led government, the sources divulged. During his finance minister stint from 2012-2014, Kittiratt was no stranger to tussling with the then central bank governor over monetary policy decisions. And guess what? His nomination hasn’t even hit the media waves yet.

Lately, Kittiratt has been vocally supporting the current government’s plea for a rate cut to breathe life into an economy that limped along with a mere 1.9% growth last year. Just a few weeks after the Pheu Thai Party clawed its way back to power in September 2023, the BoT—a veritable bastion of monetary conservatism—hiked the benchmark rate for the eighth consecutive time, reaching a 10-year peak of 2.50%. And despite the clamor for easing, the stance has remained as rigid as ever.

Curious about Kittiratt’s thoughts on all this? Well, he’s stayed mum on the nomination, and so has the BoT, which only confirmed that it has put forth two candidates—a mystery they wouldn’t unravel. The permanent secretary of the finance ministry? Also tight-lipped.

So, who’s the final pick among the three nominees? This decision lies with a seven-member independent panel, their choice subject to the finance minister, cabinet, and the king’s approval. Just a heads-up: while the BoT chair might not sway interest rates per se, the chair does play a pivotal role in selecting the monetary policy committee, inclusive of the governor, two deputy governors, and four external experts. Plus, as if that influence wasn’t enough, the chair will have a say in choosing the next BoT head when Sethaput Suthiwartnarueput’s term wraps up in September 2025.

Now, let’s dive into the ever-contentious rates row. The BoT holds that its policies are perfectly balanced at neutral levels, attributing slow growth to deep-seated structural challenges. Governor Sethaput has remained steadfast that while a rate cut might offer a sugar rush to the economy, it’s not worth the long-term complications it could spawn.

This hardline stance has drawn fire from all quarters, including Pheu Thai’s leader Paetongtarn Shinawatra, who ascended to the prime minister’s mantle just last month. Lamenting the central bank’s independence as a stumbling block back in May, the new administration has been pushing for policy changes that align more with their growth-centric goals.

Adding fuel to the fire, Commerce Minister Pichai Naripthaphan doubled down on Monday with another call for interest rate cuts to crank up liquidity, as the government grapples with sluggish growth in Southeast Asia’s second-largest economy.

Let the drills commence! The BoT will scrutinize the three chair nominees’ qualifications over the next two weeks, according to selection committee head Sathit Limpongpan. “The committee will gather post-reviews for further deliberation, and we expect a decision before mid-October,” he disclosed to Reuters.

The tension is palpable as we await the BoT’s reshuffling. One thing’s for certain: the financial theater in Thailand is about to get a lot more interesting.