Cabinet approves appointment of PM’s economic adviser as Bank of Thailand’s new governor

BANGKOK: Thailand picked yesterday an economic adviser to the prime minister and a former World Bank economist to be its next central bank governor, in a move seen by analysts as unlikely to herald any major shake-up of monetary policy.

Cabinet approved the appointment of Sethaput Suthiwart-Narueput as governor of the Bank of Thailand (BOT) for five years from Oct 1, to succeed Veerathai Santiprabhob, who did not seek a second term for personal reasons.

The new chief faces a tough task of steering Southeast Asia's second-largest economy through the coronavirus pandemic, and with near-zero interest rates and high household debt.

Sethaput, 55, was widely tipped to get the job. He sits on the BOT's Monetary Policy Committee and holds a doctorate in economics from Yale University.

Charnon Boonnuch, an economist at Nomura, saw "limited monetary policy implications" from Sethaput's appointment, given he has been an MPC member since 2014.

Sethaput's role as an economic adviser to Prime Minister Prayuth Chan-ocha should present no concern about central bank independence, he said, due to his credible track record in the public and private sectors.

Pote Harinasuta, who once worked with Sethaput and now heads One Asset Management, described him as "taciturn and capable". "If he decides to do anything, it will be based on a variety of information at that time," he said.

Analysts expect him to work smoothly with Predee Daochai, the man widely tipped to be finance minister in a new cabinet to be completed by mid-August.

Sethaput was picked for his qualifications, performance, attitude, vision, and because he was from a younger generation, Prayuth said. "That's from the selection committee," he added. "It's not me to decide anybody".

The BOT has cut its policy rate three times this year to a record low 0.50%, and predicts the economy will contract a record 8.1% this year due to a coronavirus crisis that decimated tourism and slowed domestic activity.

A persistently strong baht has been hurting export competitiveness.

The BOT has emphasised it can only smooth out excessive currency moves amid reports that Thailand risks being added to the US currency manipulation watchlist.

In a 2015 interview with the central bank's magazine, Sethaput said he had learned from his father the importance of integrity and his World Bank experience had taught him to value and understand different perspectives.

Monetary policy had limits and was no "magic sword", but consequences of its misuse could be enormous, he said.

Asked his secret to success, Sethaput told the magazine: "Who does not like success? Success is important. But if attached to that too much, our life may not be that happy." – Reuters

source https://www.thesundaily.my/business/cabinet-approves-appointment-of-pm-s-economic-adviser-as-bank-of-thailand-s-new-governor-DC3217498