Thailand’s government is backing Kittiratt Na-Ranong, a critic of the central bank’s hawkish monetary policy and a loyalist of the ruling party, to become the new chairman of the Bank of Thailand, according to people familiar with the matter.

The Finance Ministry has proposed Kittiratt for BOT chairman’s position to a panel tasked with selecting a replacement for Porametee Vimolsiri, who completes his term at the end of this month, the people said, requesting anonymity as they aren’t authorized to discuss the information before it’s made public.

The selection committee has also asked the BOT to vet the qualifications of Kittiratt - a former finance minister and an economic adviser to former premier Srettha Thavisin - along with two other candidates nominated by the central bank, the people said. Reuters reported Kittiratt’s nomination earlier.

Finance Minister Pichai Chunhavajira declined to comment on the BOT chairman selection on Tuesday, saying that the central bank is still screening the candidates. Sathit Limpongpan, who heads the selection panel, said he hasn’t seen the names of the candidates as the process requires the BOT evaluation first. Sathit expects the panel to reach a decision mid-October.

Kittiratt didn’t respond to phone calls and a text message requesting comments.

While the BOT chairman doesn’t have powers to dictate monetary policy, the official can evaluate the BOT governor’s performance as well as have a say in which outside experts join the seven-member Monetary Policy Committee headed by Sethaput Suthiwartnarueput.

Kittiratt’s nomination is seen as an attempt by new Prime Minister Paetongtarn Shinawatra’s administration to tighten its grip over the central bank which has ignored repeated calls to cut the key interest rate from its highest level since 2013. While Paetongtarn hasn’t publicly commented about monetary policy since taking office last month, she once described the BOT’s autonomy as an “obstacle” to government efforts to boost the economy.

The ruling Pheu Thai party, backed by Paetongtarn’s father and two-time prime minister Thaksin Shinawatra, has a history of clashing with the central bank. In 2001, Thaksin fired the then BOT governor after the official defied his call for interest rate adjustments. In 2013, Kittiratt, who who was finance minister in Yingluck Shinawatra’s cabinet, had publicly pressured then central bank chief Prasarn Trairatvorakul to cut rates.

Sethaput has withstood pressure to lower borrowing costs, arguing the current settings are neutral for Thailand’s economic and financial conditions. While Paetongtarn’s predecessor Srettha Thavisin pushed for lower rates, his finance chief Pichai, who stayed under the new government, sought a higher inflation band to make room for easing.

Signs of the new administration continuing to pressure Sethaput to cut rates are already emerging. On Monday, Commerce Minister Pichai Naripthaphan asked the BOT to loosen policy settings to aid growth and take steps to rein in a rally in the baht.

Once the panel makes the decision on the chairman, it will be submitted to Finance Minister Pichai for approval before it’s sent to the cabinet and officially notified in the gazette.

Under BOT rules, the chairman and MPC members are appointed for a three-year term and eligible for reappointment for a maximum of six years.

  - Bloomberg