More than 800 prominent Thai economists, including four former central bank governors, have warned of political interference in the selection of the next governor of the Bank of Thailand (BOT).

In a statement on Saturday, a group of economists said refer to themselves The “Economists for Society” group said the government’s nomination of Finance Minister Kittirat Na Ranong, an open critic of BOT Governor Sethaput Suthiwartnarueput and a staunch member of the ruling Pheu Thai party, could damage the institution’s “credibility” as an impartial institution. economic referee.

The statement comes after months of disagreements over monetary policy between the BOT and the Pheu Thai-led government, currently led by Prime Minister Paetongtarn Shinawatra. Seeking to pull the Thai economy out of its current lethargy, the government forced the BOT to lower interest rates and raise its inflation target; The central bank refused to accept this request. Sethaput also expressed his opposition to the Pheu Thai government’s “digital wallet” incentive policy.

The “Economists for Society” group noted that Kittirat had held numerous political offices under Pheu Thai-led governments and said these posed a potential threat to the perception of the BOT’s independence. According to Reuters, economists said that the BOT “if it fulfills the wishes of the political group, it will undermine the credibility of the central bank, which is supposed to maintain strong economic stability for the country in the long term.” reported.

According to the Bangkok Post, Kittirat previously served as deputy leader and chief economic strategist at Pheu Thai. He was also an advisor to former Prime Minister Srettha Thavisin and publicly criticized the BOT’s stance on monetary policy.

News of Kittirat’s appointment first leaked last week, prompting Thai economists to express concern and forcing the government to take action on the issue. postpone a meeting where the new BOT chairman will be elected. The meeting is planned to be held today.

The group of economists said they were not personally opposed to Kittirat’s candidacy, but were campaigning on the principle that anyone with close ties to ruling politicians should not serve as chairman of the BOT board.

BOT Governor Sethaput in a recent speech at the Bank of International Settlements annual conference in Switzerland expressed his concern About the growing challenges to central bank independence for central banks around the world. “If we allow central bank independence to erode, we cannot fulfill our core duties,” the governor said.

Shortly after Pheu Thai took office in September 2023, the BOT raised its benchmark interest rate to 2.5 percent, the highest level in a decade. Despite repeated calls for the government to ease monetary policy, the central bank kept interest rates unchanged until last month. announced unexpectedly 25 basis point cut for the first time since 2020. Given the pressure from above, he has since been forced to argue that the move was a “recalibration” and not the result of political pressure.

The Thai government insists it respects the independence of the BOT but wants it to do more to help revive the economy, which has performed slowly since the end of the Covid-19 pandemic. as James Guild I wrote on these pages In May, the Pheu Thai government had several reasons for a return to the low interest rates that have been a feature of the Thai economy for years.

First, it prevents the baht from strengthening, which could potentially weaken Turkey’s competitiveness. Thailand’s exportsincluding tourism. The second reason is the country’s high level of consumer debt, which is exacerbated by high interest rates and has the potential to turn into political problems for the Pheu Thai government.

Meanwhile, the BOT is having to walk a fine line in managing the Thai economy. “If the baht becomes too strong, it will make Thailand less attractive as a tourist destination or export hub,” Guild wrote. “But if the baht loses too much value too quickly, this could lead to capital flight, which devalues ​​the currency and destabilizes the economy.”