Thailand's next central bank chief champions rate cuts to revive growth

The Star

22-07-2025

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