Central bank contender touts need to work with government

Bangkok Post

16-07-2025

A contender to be Bank of Thailand's (BoT) next governor said she would be "a little more aggressive" in articulating the path for interest rates, calling for closer coordination of monetary and fiscal policies.
"As we have very limited resources, every bullet that we use would have to be more effective," BoT Deputy Governor Roong Mallikamas said in an interview in Bangkok on Tuesday. "That probably could be done only if we were in collaboration and our policies are directed in the same direction in a cohesive manner and better coordinated."
Ms Roong made her comments the same day cabinet had been expected to endorse veteran banker Vitai Ratanakorn to lead the central bank. But a final decision has been delayed for at least a week, raising the prospect that Harvard-educated Roong could still get the top job.
A career central banker, 56-year-old Roong is widely seen as representing continuity from current governor Sethaput Suthiwartnarueput, who has resisted government pressure over interest rates. Mr Vitai, in contrast, has publicly called for lower borrowing costs.
The surprise delay in naming a new governor adds to uncertainty caused by the recent suspension of Prime Minister Paetongtarn Shinawatra, the daughter of former leader Thaksin Shinawatra. Thaksin, whose family has won nearly every election since the turn of the century, has long pushed for looser monetary policy while clashing with royalist generals, judges and bureaucrats.
On top of that, Thailand is trying to stave off higher US tariffs that would damage its export-reliant economy and revive sluggish growth. The benchmark SET Index is among the world's worst-performing stock markets so far this year.
Under Mr Sethaput, the central bank resisted government pressure for rate cuts and a higher inflation target to spur growth in an economy that has lagged the growth seen among peers in Southeast Asia.
Ms Roong said that if she is appointed BoT governor, she would engage with diverse stakeholders from the government, financial and the private sector right from the start.
"A lot of times we wait until things kind of develop to the stage where it has become a confrontation," Ms Roong said. "By hearing them early, they hear us early, telling them early, we made the chances of resolving and seeing more eye to eye and working with more space and more lead time."
Ms Roong said she backs the BoT's current accommodative policy stance, which has seen 75 basis points of rate cuts since October, and noted that uncertainty about the rate outlook may prevent banks from lowering borrowing costs, reducing the overall effectiveness of interest rate cuts.
"During this time of uncertainty, monetary policy needs to be supportive and serve as an anchor of stability," Ms Roong, who oversees financial system stability at the central bank, said in the interview. 'There are just too many uncertainties already and we should not add more. I would probably be a little more aggressive in articulating' the rate path, she said.
Total loans have contracted for three quarters in a row, while household debt remains high. But the monetary policy committee led by Mr Sethaput has underscored the need to preserve its limited policy space to deal with future shocks, though most economists expect a further 50 to 75 basis points in rate cuts this year.
The front-runner for governor, 54-year-old Vitai, is an advocate of lower rates and coordinated fiscal and monetary policy to help revive the faltering economy. As president of the Government Savings Bank (GSB), which has spearheaded state efforts to provide financial relief to debt-burdened households and individuals, he is perceived as being close to the finance ministry, raising questions about the independence of the central bank.
Ms Roong has worked for nearly three decades at the BoT, helping shape monetary policy, financial regulation and fintech oversight. She also had a stint at state-run Krung Thai Bank Public Company Limited.
"I have addressed challenges at the macro level and the micro level, being quite familiar with the central bank tools and purview and scope of our work, which is actually very wide, very large," she said. "So I'm just offering my experience."