Pheu Thai denies meddling rap

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>> The ruling Pheu Thai Party has denied interfering with the Bank of Thailand (BoT)’s independence, despite criticism of the bank’s interest rate stance by leader Paetongtarn Shinawatra.

Speaking at an event hosted on Friday at Pheu Thai’s headquarters, Pheu Thai leader Paetongtarn Shinawatra weighed in on the dispute between Prime Minister Srettha Thavisin and the BoT, which has refused to bow to his constant pressure to cut interest rates.

Ms Paetongtarn criticised the BoT, saying its independence from the government was posing an obstacle to efforts to resolve a raft of pressing economic problems. “The law that keeps the Bank of Thailand (BoT) independent from the government is a problem and a major obstacle in solving economic problems,” she said.

Ms Paetongtarn said the country has relied heavily on fiscal policy to shore up the economy, which has resulted in high public debt and budget deficits. “If the BoT doesn’t understand and cooperate with the government [in its efforts to tackle economic problems], we can’t [win],” she said. She said the country had lost opportunities for almost two decades due to military coups but Pheu Thai could reverse its fortunes before the next election.

The government has repeatedly urged the BoT to consider revising its interest rate policy and lowering the benchmark interest rate for the sake of economic stimulus. Mr Srettha previously said the current rate of 2.5%, a 10-year high, is hurting the public and it may exacerbate the nation’s high household debt.

Rinthipond Varinvatchararoj, a deputy Pheu Thai secretary-general and list-MP, said the government was not trying to interfere with the BoT.

‘’The Pheu Thai leader only wanted the BoT to listen to the government’s voice as it plays an important role in steering the economy to ensure consistency in fiscal and financial policies,’’ Ms Rinthipond said. In principle, the central bank has independence in pursuing its policy. However, it also has the responsibility to ensure its policy is in line with the country’s economic situation. It should also listen to the government which carries out fiscal policy, she said.

Sanphet Boonyamanee, a Democrat MP for Songkhla, said the government should be happy a law is in place to ensure the BoT’s independence. “In principle, a central bank must ensure economic and financial stability. Its independence must be protected and any government meddling kept at bay,” Mr Sanphet said.