Thailand delayed naming a new central bank chairman as opposition mounted against the government’s bid to push the candidacy of a former finance minister to tighten its grip over the monetary authority.

A panel mandated to pick the new chair postponed a meeting scheduled for Monday to Nov 11 as it requires more time to carefully “consider all aspects” of the selection, Bank of Thailand (BOT) assistant governor Vireka Suntapuntu said in a statement. 

The panel, comprising of former regulators and retired bureaucrats, has asked the Finance Ministry to consider replacing its nominee Kittiratt Na-Ranong, a vocal critic of the central bank’s hawkish monetary policy, the Krungthep Turakij newspaper reported, without saying where it got the information. Finance Minister Pichai Chunhavajira told reporters that he is open to proposing a new candidate if it is needed to “move the nation forward and please everybody”. 

The pushback is the latest in a simmering dispute between Prime Minister Paetongtarn Shinawatra’s administration and the BOT on the best way to boost the economy. Both have sparred over monetary policy and inflation targets with the BOT chair selection becoming the latest flashpoint. 

While the chairman doesn’t decide on policy, the official will have a say in who joins the Monetary Policy Committee, evaluate the governor’s performance and get involved in foreign reserve management. Also, governor Sethaput Suthiwartnaruep is due to retire next year and has been touting the central bank’s autonomy.

In the meantime, a group supporting the BOT’s independence rallied in front of the central bank’s office in Bangkok on Monday. They planned to hand over a petition to the central bank warning against any government interference in BOT chairman’s selection. 

A group of former central bank chiefs and economists had last week urged the selection panel not to pick a political representative as the chair as the person would serve the short-term interests of the political parties, damaging economic stability. Pichai said the board wielded limited powers as key decisions are taken by various BOT committees.

Kittiratt, the government’s pick, has slammed the monetary authority for not lowering rates when he served as an economic adviser to Srettha Thavisin before he was ousted as the prime minister earlier this year. When Kittiratt was the finance minister in Yingluck Shinawatra’s Cabinet in 2013, he publicly pressured then central bank chief Prasarn Trairatvorakul to cut rates. 

BOT has nominated Kulit Sombatsiri, who has previously worked at the energy and finance ministries, and academic Surapon Nitikraipot. 

Paetongtarn’s administration is pushing for lower interest rate to complement its expansionary fiscal policies to shore up growth, but the conservative central bank has stuck to a cautious approach. However in recent weeks, there seem to have been some compromises. 

The central bank surprised markets last month by cutting its key rate for the first time since 2020, though Sethaput said it was not the start of an easing cycle. Last week, Thailand’s official inflation target was retained at 1%-3% range for next year — a victory for the BOT after a months-long campaign by the Finance Ministry to increase it. 

  - Bloomberg