Matichon: “Yingluck plans to invite FM Kittirat & CB chief Prasarn to working dinner”

Matichon, a newspaper in Thailand, quoting source, says PM Yongluck is to invite Finance Minister Kittirat and Central Bank Chief, Prasarn, to dinner and try to establish a working relationship between the two, so that the Thai government management of the economy and the Central Bank management of the monetary policy, can complement each other. However, in answering the press question about the conflict between Kittirat and Prasarn on the baht issue, Yingluck said the problem is structural, where Prasarn is only one voice at the Central Bank, as related to the monetary policy committee, that decides the fate of Thailand’s interest rate, that can impact the baht. Some of her party MPs are criticizing the monetary policy committee. Yingluck also said the government can not tell the Central Bank what to do, as the bank is independent. The bank’s chairman earlier said Yingluck could fire Prasarn and Yingluck can not escape the responsibility for Prasarn’s failure. Most neutral observer said firing Prasarn is an option, but a last resort option as the political reaction would be significant. The chairman also said both Finance Ministry and Central Bank, both have measures that can weaken the baht, where the Federation of Thai Industry says the real sector GDP is being hit hard by the hardening baht, as Thai goods loose competitiveness and profitability. However, some academic argues a hard baht helps facilitate Thai firms globalization moves. Currently, the Finance Ministry and the Central Bank, are pointing their fingers at the other, as the one that should make a move to weaken the baht. Yet the latest concrete move by Kittirat and Prasarn, is a compromise saying, because the baht has weakened, no immediate measures is needed, until the baht hardens too much. And some measures are being ready. However, the political pressure for some action is running very strong. That strong pressure, is seeing all sort of blaming this and that for this and that. The latest with Yingluck herself is that she is concerned about exporters and SMEs. But some latest figure says both are not hit as hard as many says, and that the hard baht is working to help Thai firms globalize. Some Thai academics says the problem at the Central Bank, relates to the political structure of Thailand, where the real sector has less political clout than the financial services sector. These academics, for example, points out, that while the real sector struggles against a torrent of factors, Thai banking sector profits continues to rake in double digit growth (Source: Today’s Matichon newspaper print version, first page).


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