Latest news with #VitaiRatanakorn
Bangkok Post
2 hours ago
- Business
- Bangkok Post
Thailand's next central bank chief champions rate cuts to revive growth
Vitai Ratanakorn, the incoming governor of the Bank of Thailand, by his own admission, will start his new job in October at a difficult time. Growth in Southeast Asia's second-largest economy has stalled, tense negotiations with the United States over trade tariffs continue, industrial sentiment is tepid and critical sectors, including tourism and manufacturing, aren't firing. "We must accept that the Thai economy is not doing so well," Mr Vitai, who has been approved by the cabinet as the next central bank chief but awaits royal endorsement, told reporters last week. "And what is worrying is the sluggishness that may be prolonged." The 54-year-old, who currently serves as president and chief executive of the Government Savings Bank, Thailand's largest state-owned lender, has a prescription: more rate cuts. The central bank late last month left the key interest rate unchanged, underlining the need to save some policy ammunition, after cuts in October, February and April. Those reductions brought the one-day repurchase rate to 1.75%, the lowest in more than two years. "Proactive easing is important," Mr Vitai told Thai financial daily Krungthep Turakij on June 20, when he was locked in the race for the top job with central bank insider Roong Mallikamas. "It's not just another one or two cuts. We may have to reduce them for a long time and more deeply. So, from 1.75%, if you ask me personally, I think it can go down much further." Thailand's ruling Pheu Thai Party, which took power in 2023, has been at loggerheads with current Bank of Thailand chief Sethaput Suthiwartnarueput for not cutting rates enough to support a sluggish economy. In May last year, before she became prime minister, Pheu Thai leader Paetongtarn Shinawatra said the central bank's independence was an "obstacle" in resolving economic problems, underlining the scale of the friction. Mr Vitai's stance will likely tone down some of that conflict, but it has also raised questions about his own ability to lead the central bank without succumbing to pressure from the ruling party - an issue he has publicly addressed. "I am confident that I can make decisions independently, based on principles and prioritising the nation's interests, free from the influence of any groups," Mr Vitai wrote on his Facebook page on July 8. Mr Vitai studied economics and law at Chulalongkorn and Thammasat universities, and finance at Drexel University in the United States, and entered the Thai private sector, where he worked at Charoen Pokphand Group and budget carrier Nok Air. A former colleague, who worked alongside Mr Vitai at a private firm, described him as a team player who preferred to work with consensus. "He is more of a practicalist than a theorist, focusing on getting the job done," he said, asking not to be named because he is not authorised to speak to media. In 2018, Mr Vitai was appointed the Secretary-General of the Government Pension Fund, which manages assets worth about 1.4 trillion baht, and two years later became the head of the Government Savings Bank. Thirachai Phuvanatnaranubala, a former Thai finance minister, said Mr Vitai's long experience as a government banker should help him manage relationships with senior finance ministry leadership.
The Star
3 hours ago
- Business
- The Star
Thailand's next central bank chief champions rate cuts to revive growth
BANGKOK: Vitai Ratanakorn, the incoming governor of the Bank of Thailand, by his own admission, will start his new job in October at a difficult time. Growth in Southeast Asia's second-largest economy has stalled, tense negotiations with the United States over trade tariffs continue, industrial sentiment is tepid and critical sectors, including tourism and manufacturing, aren't firing. "We must accept that the Thai economy is not doing so well," Vitai, who has been approved by the cabinet as the next central bank chief but awaits royal endorsement, told reporters last week. "And what is worrying is the sluggishness that may be prolonged." The 54-year-old, who currently serves as president and chief executive of the Government Savings Bank, Thailand's largest state-owned lender, has a prescription: more rate cuts. The central bank late last month left the key interest rate unchanged, underlining the need to save some policy ammunition, after cuts in October, February and April. Those reductions brought the one-day repurchase rate to 1.75%, the lowest in more than two years. "Proactive easing is important," Vitai told Thai financial daily Krungthep Turakij on June 20, when he was locked in the race for the top job with central bank insider Roong Mallikamas. "It's not just another one or two cuts. We may have to reduce them for a long time and more deeply. So, from 1.75%, if you ask me personally, I think it can go down much further." Thailand's ruling Pheu Thai party, which took power in 2023, has been at loggerheads with current Bank of Thailand chief Sethaput Suthiwartnarueput for not cutting rates enough to support a sluggish economy. In May last year, before she became prime minister, Pheu Thai leader Paetongtarn Shinawatra said the central bank's independence was an "obstacle" in resolving economic problems, underlining the scale of the friction. Vitai's stance will likely tone down some of that conflict, but it has also raised questions about his own ability to lead the central bank without succumbing to pressure from the ruling party - an issue he has publicly addressed. "I am confident that I can make decisions independently, based on principles and prioritising the nation's interests, free from the influence of any groups," Vitai wrote on his Facebook page on July 8. Vitai studied economics and law at Thailand's Chulalongkorn and Thammasat universities, and finance at Drexel University in the United States, and entered the Thai private sector, where he worked at Charoen Pokphand Group and budget carrier Nok Air. A former colleague, who worked alongside Vitai at a private firm, described him as a team player who preferred to work with consensus. "He is more of a practicalist than a theorist, focusing on getting the job done," he said, asking not to be named because he is not authorised to speak to media. In 2018, Vitai was appointed the Secretary-General of the Government Pension Fund, which manages assets worth about 1.4 trillion baht ($43 billion), and two years later became the head of the Government Savings Bank. Thirachai Phuvanatnaranubala, a former Thai finance minister, said Vitai's long experience as a government banker should help him manage relationships with senior finance ministry leadership. "However, his lack of work experience and zero exposure to high level macro public policy is a cause for concern," Thirachai told Reuters. - Reuters
The Star
3 hours ago
- Business
- The Star
Asia markets slip on renewed tariff tensions; Bangkok appoints new cenbank chief
Emerging Asian equities trended lower on Tuesday as investors took stock of regional governments' trade talks with the U.S., with Thai shares falling due to worries over the independence of the domestic central bank following a key appointment. Thailand's benchmark index fell over 1% after news that Vitai Ratanakorn, a perceived rate-cut advocate, would take the helm at the Bank of Thailand. The Thai baht slipped further, down 0.3% on the day. "Given the weakness of Thailand's economy, there is no doubt that the country needs lower interest rates," said Gareth Leather, senior Asia economist at Capital Economics, but added the appointment may fuel concerns about the bank's independence. Thai equities have risen over 8% since reports of Ratanakorn's appointment, anticipating monetary easing, but have also raised concerns about ongoing tensions between the BoT and the government regarding pressure for rate cuts. "While we have some sympathy with the government's argument that interest rates have been kept too high for too long, over the longer term, there is strong evidence that central bank independence tends to deliver better inflation outcomes," added Leather. Across the region, most stock markets were in the red, with Taiwan, South Korea and Malaysia posting losses between 0.3% and 1.5%. Taiwan equities extended their decline into a second session, giving back some of the 5% gain accumulated earlier this month. Meanwhile, Jakarta's benchmark continued to outperform, rising for a 12th straight session, underpinned by optimism following a recent U.S. trade agreement and domestic policy easing. Singapore's Straits Times Index also retreated from record highs after 14 sessions of fresh peaks. Investors are now focused on the Monetary Authority of Singapore's policy meeting on July 30. In the currency markets, regional units moved in tight ranges as the August 1 deadline loomed for Southeast Asian nations to strike trade deals with the U.S. or face sweeping tariffs. The South Korean won and Thai baht edged lower, while the Malaysian ringgit posted modest gains. The MSCI index of emerging market currencies held steady but remains down roughly 1% from its July 3 record high. "We are in a backdrop of a fragile global environment where events ranging from Japanese upper house elections to U.S. President Donald Trump's tariff threats continue to create much uncertainty and cloud the outlook for markets," said Maybank analysts. Japan's Nikkei closed lower, while the yen softened slightly after weekend election results delivered a setback to the ruling coalition, though the outcome was broadly in line with investor expectations. HIGHLIGHTS ** Indonesian 10-year benchmark yield flat at 6.519% ** Philippines' Marcos to meet Trump hoping to secure trade deal ** Thailand foreign tourist arrivals fall 5.91% annually so far in 2025 - Reuters
Reuters
3 hours ago
- Business
- Reuters
Thai cabinet picks Vitai Ratanakorn as next central bank chief
BANGKOK, July 22 (Reuters) - Thailand's cabinet gave its approval on Tuesday for Vitai Ratanakorn to take over as the next central bank governor and revive an economy in the doldrums with limited monetary policy room to work with. The appointment of Vitai, 54, the president and CEO of the Government Savings Bank, would be subject to royal approval before he starts a five-year term on October 1. He was picked over central bank veteran and deputy governor Roong Mallikamas. Vitai would succeed Sethaput Suthiwartnarueput, who has reached retirement age. The cabinet approval for Vitai was announced by government spokesperson Jirayu Huangsap. The Bank of Thailand's next governor faces a big challenge with an economy shackled by tepid consumption, weak lending, stubbornly high household debt and steep U.S. tariffs. Vitai has a master's degree in finance from Drexel University in the United States, as well as degrees in economics and law from Thailand's Chulalongkorn and Thammasat universities. Some analysts expect his appointment to improve the working relationship of the central bank and the Pheu Thai party-led government, which has previously clashed with Sethaput over interest rates and monetary policy settings. "There should be no issue of conflict," said Natapon Khamthakrue, an analyst at Yuanta Securities. "Vitai's approach is likely to be more relaxed compared to someone from the central bank, but making significant adjustments within the central bank might not be easy due to existing regulations." However, Natapon cautioned that "there needs to be careful consideration to avoid the perception of excessive government interference". Last year, Prime Minister Paetongtarn Shinawatra, before she was premier, said central bank independence stood in the way of solving economic problems. In a social media post earlier this month, Vitai said he has acted independently and without influence from any groups in his career, prioritising the public interest. Last month, he said there was a need to cut interest rates deeply to support a stagnant economy. The central bank late last month left the key interest rate unchanged, underlining the need to save some policy ammunition after three cuts from October that brought the key rate to 1.75%, the lowest in over two years. The next rate review is August 13. Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank, said Vitai should help coordinate monetary policy with government policy. Finance Minister Pichai Chunhavajira said the same, adding the top priority should be solving Thailand's debt issues. "The most urgent and biggest issue is debt," he told reporters. "Regarding monetary policy, the central bank has independence, but it must work to support policies that align with driving the economy and government policy." Chamadanai Marknual, an economist at Krungthai Bank, said the new governor would likely uphold the central bank's independence and as an outsider, Vitai could push for more preemptive policy. "Having someone who has never worked at the central bank before may have an outside-in perspective," Chamadanai said. "There is very limited room for fiscal measures, so adopting relaxed policies might be the right answer."
Wall Street Journal
4 hours ago
- Business
- Wall Street Journal
Thai Cabinet Names New Central Bank Chief
Thailand's cabinet has named the next central bank governor, picking dovish Vitai Ratanakorn over Deputy Gov. Roong Poshyananda Mallikamas. Vitai is set to take the reins of the Bank of Thailand on Oct. 1, according to a statement from the prime minister's office on Tuesday. Pending a final approval, Vitai will succeed BOT Gov. Sethaput Suthiwartnarueput, whose five-year term ends Sept. 30.
