Thailand’s new government has revived calls for the central bank to reduce borrowing costs, with Prime Minister Paetongtarn Shinawatra’s commerce chief calling on policymakers to help spur Southeast Asia’s second-biggest economy.
“The central bank’s thinking may be outdated and too slow,” Commerce Minister Pichai Naripthaphan said in a briefing on Monday. “Our economic growth is so slow. The BoT should help us boost growth,” said Mr Pichai, who was a key adviser to Ms Paetongtarn’s predecessor Srettha Thavisin.
The Bank of Thailand, he said, should manage the baht’s strength that’s already hurting exporters and also help boost liquidity in financial markets. The currency has gained more than 10% this quarter, the best performer in Southeast Asia.
The minister’s rate cut call was the first from Ms Paetongtarn’s cabinet, signalling that the new administration will continue to exert pressure on monetary authorities to bring borrowing costs that are currently at the highest since 2013. Mr Pichai supported Mr Srettha’s monthslong campaign for lower rates, which central bankers led by BoT Governor Sethaput Suthiwartnarueput had resisted.
The minister said he’ll schedule a meeting with Mr Sethaput on the issues he raised.
The Thai currency has become “too strong” and has put exporters, especially those with low margins, at risk, Mr Pichai said.
The Commerce Ministry also plans to:
- Support Thai companies seeking to expand overseas
- Pursue free trade agreements to bolster trade and investment
- Implement measures to stop cheap imports, especially from China, from hurting local manufacturers
“We will need to work hard amid the global economic slowdown,” Mr Pichai said. “We need to revive the Thai economy.”