Gamut of challenges await BoT governor
"Whether or not we can deal with economic problems needs cooperation. We cannot simply rely on a single agency," said Vitai Ratanakorn, president of Government Savings Bank, who will assume the post of governor of the central bank in October, while airing his views during a talk held at the Economic Reporters Association on July 19.
The issues of interest rates, loan rates and the value of the baht will require Mr Vitai's close attention as identifying the right solutions could reduce financial burdens, increase the competitiveness of businesses and stimulate consumer purchasing power, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).
"Lower loan interest rates will allow small and medium-sized enterprises [SMEs] to access financial sources more easily, which is crucial for their operations," he said.
SMEs, which represent the majority of the FTI's members, play a key role in driving the economy.
Echoing Mr Kriengkrai, Isares Rattanadilok Na Phuket, managing director of Altimate Packaging Co, said he wants to see the new central bank governor seriously deal with the net interest rate spread of commercial banks, which is the difference between the interest rates for loans and deposits, as it is crucial to banks' profitability.
A high spread affects SMEs, which are good debtors with have high potential to repay debt, as banks lend at higher rates than they pay for deposits.
Mr Kriengkrai also wants Mr Vitai to work on plans to have banks ease lending criteria as difficulty accessing loans deals a blow to many businesses.
The new governor needs to help exporters maintain their competitiveness by preventing a sharp appreciation of the baht, which would make Thai products more expensive, he added.
"A stronger baht would also cause foreign tourists to delay their travel to Thailand," said Mr Kriengkrai.
A range of issues from competitiveness, household debt to the impact of the aged society and political conflicts are structural problems that could lead to an economic slump, Mr Vitai said earlier this month.
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