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Balancing Act: Thailand’s PM Advocates Central Bank Autonomy Amid Economic Strategy Talks

It’s no secret that the dance of governance and economics is a delicate tango, with the government and the central bank often moving to their own complex rhythms. Yet, Prime Minister Srettha Thavisin clarified his stance with the grace of a seasoned dancer, articulating his deep respect for the autonomy of the Bank of Thailand (BoT)—an independence as sacred and inviolable as a royal decree.

Nevertheless, we all know that communication can smooth the most complicated of waltzes, and Mr. Srettha has placed his cards on the table, seeking a weekly tête-à-tête with BoT governor Sethaput Suthiwartnarueput. Picture the scene: two financial maestros, sipping coffee, discussing the symphony of numbers and policies that could set Thailand’s economic stage alight. Their recent rendezvous at the storied halls of Government House wasn’t a clandestine affair; rather, it was a public demonstration of the intricate interplay between political will and economic prudence.

Why, then, did Mr. Srettha feel the need to raise his voice against the rising policy rate? The answer is simple: empathy. His heartstrings tugged by the plight of the poor, the mom-and-pop shops, the little engines of the economy that could—until they hit the steep slope of high interest. High-stakes indeed. And when the Prime Minister airs his concerns on the digital megaphone of social media, you know the man means business.

Mr. Srettha, donning the twin hats of Prime Minister and finance minister, insists that his conversations with the governor are devoid of interference, but rich with concerns for the Thai economic tableau—from the domestic market’s buzzing bazaars to the global financial winds. They spoke of negative inflation, a tricky beast that’s been shadowing the market for months, exacerbated by the government’s well-meaning tango with oil and electricity prices, all in a bid to keep the cost of living from ballooning like a child’s party decoration getting out of hand.

The Prime Minister isn’t proposing a ballroom blitz; he’s extending an olive branch for regular collaboration—whether it be over a robust cup of coffee or within the BoT’s own hallowed halls. Communication is key, and Mr. Srettha is ready to turn the lock. The digital money handout scheme might be on the back-burner for now, but rest assured, the kitchen is still fired up for future fiscal feasts.

The wily deputy chairman Pichai Naripthaphan, of the ruling Pheu Thai Party, chimes in, adding his two baht to the conversation. He’s calling on the BoT to flex its financial muscles and churn out policies that invigorate an economy that’s been sleepwalking for too long. Banking profits have soared to celestial heights, totaling 220 billion baht just last year, all while the economy limped along. Pichai’s eyebrow is rightfully raised: Is the BoT conducting this financial orchestra with the poise it should?

As the saga of Covid-19 unfolds, economic wounds from 2020 remain raw, with a growth hiccup of negative 6.1%, and yet, banks here hoarded 146 billion baht in profits. Compare this to their international cousins licking their wounds, and the disparity is as stark as a moonless night. Has the BoT been a diligent watchdog, ensuring these financial institutions don’t feast while the country fasts?

Mr. Pichai isn’t mincing words. He’s championing a BoT that’s proactive, that shows concern for the gargantuan debt dragon threatening to engulf the economy, the SMEs trapped in a maze of bad debts, and the liquidity labyrinth that’s all but dried up. The specter of deflation looms; exports are stumbling, and the public needs answers that go beyond the BoT’s upbeat proclaiming “All’s well!”

It’s high time, Mr. Pichai posits, for the BoT to script a narrative that’s as compelling as it is reassuring, to rev up the engines of the Thai economy before the proverbial carriage turns back into a pumpkin at midnight. Play the music, he says, and make it a tune the whole country can dance to.’

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