Central Bank chairman takes a side, wants action for weak baht now

Considered a Thai economic guru, Central Bank chairman, Veerapong Ramangkul, has thrown his weight in on the “Soft Baht Now” camp, saying, the situation is in a near crisis mode, that could see Thailand falling into another financial crisis. Veerapong also beefed up Finance Minister Kittirat Na Ranong outraged that the Central Bank never showed him, what they are doing about the baht; with Veerapong saying the Thai Central Bank is suffering heavy losses. He says Yingluck has the authority to remove Prasarn, and that Yingluck can not escape responsibility of damage done by the Central bank. Veerapongs also says, however, everyone is pointing figures, saying the Finance Minstry and the Central bank, both have tools to weaken the baht. Veerapongs says the interest rate decision, the key tool in weak baht equation, is with the monetary policy committee. Apart from Thai Central Bank chief,  Prasarn, and his fraction in the Central Bank monetary policy committee, that meet to vote on the interest rates, Prasarn is only but one voice. Veerapong says the members of the monetary committee are not expert in economics. Thailand’s real sector is reeling from the hardening baht, with competitiveness and profit being squeeze. While in the medium and long term the hard baht could help the real sector take advantage of a more globalized Thai economy. The baht, currently, is some-what volatile and looking for a direction from policy makers, with only the fighting from the different camp, raising the uncertainty, and reducing rick appetite, that is keeping the baht a bit on the bear side. Some academic, in the political economic studies, say Thailand’s current problems at the Central Bank, reflects the political structure of Thailand, where the real sector has less power than the Elite financial services sector (Source).

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