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The Star
12 hours ago
- Business
- The Star
Thailand names rate-cut advocate Vitai to lead central bank
BANGKOK: Thailand picked a rate-cut advocate with close ties to the government as its next central bank governor, defying concerns over a potential erosion of the monetary authority's independence. The cabinet approved the nomination of Vitai Ratanakorn (pic), as proposed by Finance Minister Pichai Chunhavajira, during a weekly meeting in Bangkok on Tuesday (July 22), according to government spokesman Jirayu Houngsub. The president of the Government Savings Bank was chosen over fellow finalist and Bank of Thailand deputy governor Roong Mallikamas. Vitai's cabinet endorsement was based on his "knowledge, expertise, and experience in economics and banking, and that he meets the qualifications prescribed by law,' Jirayu said. The decision was delayed last week when the cabinet did not discuss the proposal due to incomplete paperwork. This caps off a months-long BOT governor race that has been marred by concerns about the government encroaching on the central bank's autonomy as it repeatedly presses for lower interest rates to boost the economy. Similar tensions are brewing elsewhere with US President Donald Trump publicly deriding Federal Reserve Chair Jerome Powell and even discussing his possible removal in a quest for deeper rate cuts. The baht was up 0.2% versus the dollar at 32.28, while the Thai 10-year yield is down 1 basis point at 1.50% as the currency and bond held into gains following the BOT announcement. The 54-year-old Vitai is seen as a proxy candidate of the Finance Ministry. During his tenure as the head of the state-owned GSB, he led government efforts to provide financial relief to small businesses and households who borrowed heavily during the pandemic. Vitai's selection signals the government's support for a candidate who has advocated for more aggressive easing to shore up a faltering economy and ease the burden on borrowers saddled with record debt. He has also called for closer coordination between fiscal and monetary policymakers, which could mean a break from the stance of incumbent Governor Sethaput Suthiwartnarueput, who has resisted calls for rate cuts and a higher inflation target. The government earlier attempted to install its own nominee as BOT chair, but it was opposed by former Thai central bank chiefs and economists. Vitai faced similar criticism, with an ex-BOT governor saying he wouldn't be able to make independent decisions because of his ties to the government. A group of academics also posted an open letter on Monday, saying the one with central banking experience should be the most appropriate for the job. Vitai defended himself in a Facebook post on July 8, saying: "My experience and strong self-identify offer the confidence that I can make decisions independently, based on principles. Seeking the best interest of the country is important, without being influenced by any group.' The incoming governor faces a challenging economic landscape, including the region's highest household debt, sluggish credit demand, negative inflation and weakening consumption. His five-year term is set to begin on Oct 1, pending royal endorsement as required by the Thai central bank law. Despite a cumulative 75-basis point reduction in borrowing costs since October, growth remains subdued, further threatened by punitive US tariff on Thai exports and a slowdown in foreign tourist arrivals - both critical drivers of the economy. The policy rate should be significantly lowered for a sustained period to revive the stagnant economy, Vitai told local media last month after applying for the governor's role. More importantly, though, commercial banks must also pass on the reduction to customers. "This is a deep and prolonged downturn, and while interest rate cuts are necessary, they are not enough. Additional supportive measures are required,' the Bangkok Post reported, citing Vitai on June 23. Although interest rates are decided by majority vote, Vitai, as the head of the policy panel, is expected to have influence over its direction. Vitai will chair the Monetary Policy Committee for the first time on Oct 8. The next scheduled meeting of the committee is on Aug 13. The central bank last month left the benchmark interest rate unchanged at 1.75%, citing the need to preserve limited policy space to respond to future shocks. "The job at hand for the incoming governor will be to ensure that market participants perceive his policies as independent and based on economic fundamentals,' said Lavanya Venkateswaran, an economist at Oversea-Chinese Banking Corp. in Singapore. "Notwithstanding, we expect the BOT to remain dovish in its bias and have another 50 basis points in rate cuts for the remainder of this year.' As the chief of the Government Savings Bank, which was established in 1913 by King Rama VI, Vitai has managed its more than 3 trillion baht (US$92 billion) of assets since 2020. Tasked to be a "social bank' that focuses on development returns instead of profitability, GSB has been the government's key tool in extending hundred billions of soft loans to vulnerable groups. Vitai holds master's degrees in finance from Drexel University in Pennsylvania, and in law and political economy from Chulalongkorn University in Bangkok. As a son of Siriluck Ratanakorn, the first female head of the Stock Exchange of Thailand during 1982-1985, he started trading stocks since high school. Vitai positioned himself as a "change leader' who could turn around organisations. His past experience includes serving as the chief financial officer at debt-ridden Nok Airlines as well as acting president at the Islamic Bank of Thailand. "I like challenges and I like a tough job,' he said in a interview VDO clip with local media the People in 2022. "I think I am suitable for the job of rehabilitating, changing strategy and re-positioning of an organisation. It will be fun if we can do that.' - Bloomberg
Time of India
2 days ago
- Automotive
- Time of India
Govt to notify revamped model concession agreement for BOT (Toll) projects in a month, says road secretary Umashankar, ETInfra
Advt Advt By & , ETInfra NEW DELHI: The Ministry of Road Transport and Highways will notify a revamped Model Concession Agreement ( MCA ) for Build-Operate-Transfer (BOT) toll road projects that seeks to moderate the traffic risk faced by private investors, a top official has overhauled MCA will drop the concept of competing roads and introduce a so-called buy-out principle by linking all parameters to traffic, V. Umashankar , Secretary, Ministry of Road Transport and Highways, said while addressing the ET Infra Roads and Highways Summit held in Delhi on July 18.'We are doing away with the concept of competing roads and additional toll ways and relating everything to traffic, which means that the need for disputes that are likely to arise will not now arise because these factors have been built in a different way,' Umashankar stated, noting that defining a competing road in India is 'very difficult'.According to the road ministry, 'competing road' means a road connecting the two end points of a highway and serving as an alternative route.'I have come across a case where in an arbitration somebody made a claim that a Pradhan Mantri Gram Sadak Yojana road was also a competing road for a BOT concessionaire,' he said, describing how a 'loose definition' of competing facility prescribed in the MCA creates a dispute at a later stage.'That aspect we are tightening out and the single parameter would be traffic. If the traffic is not up to the threshold or it drops compared to previous years, then a mechanism automatically should kick in. Along with that, when a highway reaches the targeted traffic, then there will be a buyout principle. We can buy out so that we are not locked in and the expansion of the highway does not happen,' the Secretary changes are aimed at removing the 'uncertainty' and to make the MCA and the construction part 'more predictable' so that financing and construction becomes 'easier', thereby helping the highway authority to impose 'quality conditions' upon it.'We are rewriting the model concession agreement where we are moderating the traffic risk that is faced by a BOT concessionaire. There will be built-in mechanisms for extension or compensation in case traffic falls below the threshold and there will be a (revenue) sharing mechanism where the traffic goes beyond that threshold,' said Umshankar.'We are at the final stage of the MCA clearance and, hopefully, in a month's time we should be notifying it,' Umashankar revamping of the MCA comes close on the heels of the government's decision to revert to the BOT (Toll) model for developing highways after a gap of close to a a BOT Model, a private developer is responsible for financing, building and operating a highway project in which he is allowed to recover the investment by way of user charges or tolls for a specified BOT (Toll) Model is one of the key instruments adopted by the government for development of large-scale highway projects, but over the years it had fallen out of favour as developers faced challenges such as delay in land acquisitions, environmental clearance and fluctuation in traffic impacting toll revenues, among the revamped model concession agreement, it is expected that the government will enable provisions wherein changes to concession modalities will come about if the projected traffic undergoes variation by more than 5 per cent, than the earlier 20 per cent threshold, Minister of State for Road Transport and Highways Harsh Malhotra , had said in an interaction with ET Infra revamped model concession agreement related to BOT (Toll) Model is also expected to include significant changes related to land acquisition norms, forest clearances and other aspects related to pre-construction activities.'There were issues with the BOT concept. So, the first part of ensuring that we have a good BOT system in place is if we take care of the pre-construction issues -- land acquisition, forest clearances and others. On this again, we have issued a schedule saying at what time the project will be bid, at what time the project will be received based upon pre-construction activities,' said Umshankar.'Today, we will not even initiate the bidding process unless a wildlife clearance is received because that has an impact on cost. We won't receive the bids unless forest clearances are received,' he the existing norms, developers were exposed to operational risk at various stages of construction and were mandated to commence the work on the project after minimum acquisition of 80 per cent of the land required for the project.'What we (now) do is that we spend a little time on the appraisal, approval process and then the construction time gets spread out. We are planning to do it the other way, spend a little more time doing the pre-construction part and then get into the award so that the construction proceeds ahead smoothly. So, if you do that then you take the project construction risk significantly out of the game,' said government's endeavour to revive the BOT (Toll) Model has come at a time when budgetary allocation has reached a peak, with capital expenditure for 2025-26 at ₹11.11 lakh crore, a marginal increase from the previous year. The ministry and the National Highways Authority of India (NHAI) is now looking more at monetisation of brownfield highways and expressways rather than funding via debt and relying on budgetary that there has been a 'slight dip' in the highway award process, the Secretary said that 'it is also because this is the time to re-calibrate, re-consider and re-think because what we do now is going to stay with us for the next 50 years and that will be it'.The MCA for Hybrid Annuity Model (HAM) road projects will also be revised, Umashankar added.
Mint
5 days ago
- Business
- Mint
Thailand trip ahead? Bangkok may soon let tourists swap crypto for Baht — How does it work?
The Thai Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) is mulling to launch a 'crypto sandbox' for foreign tourists, a move that has been welcomed by digital asset exchange operators. The move is aimed at enhancing the competitiveness in Thailand's tourism, which otherwise does not allow its residents to pay in cryptocurrency. However, foreign tourists may soon be able to exchange crypto for Baht under the new rules. Here is your detailed guide of what a crypto sandbox is and how it will work in Thailand. The Bank of Thailand along with SEC has invited public comments on the launch of the crypto sandbox across the country that will allow foreign tourists to use digital assets in Thailand, in a landmark initiative. Foreign tourists in Thailand will now be able to convert their digital assets like cryptocurrency to baht for use during their stay in the country. The proposal further eyes to promote innovation, enhance digital asset utililisation and support the broader economy. Initially piloted in Phuket, the crypto sandbox initiative now expands to other parts of Thailand after receiving positive feedback. Foreign tourists will be able to exchange their digital assets to get baht from licensed digital asset operators. Thereafter, they can use the converted Thai Baht via e-money service providers to pay for goods and services across the country, the SEC said in a statement. 'Merchants would be required to open an account and make transactions through digital asset business operators under the SEC's supervision and e-money business operators under the Bank of Thailand's (BOT) supervision,' the SEC said. Sandbox participants would be allowed to provide services exclusively to foreign tourists who travel to, and temporarily reside in, Thailand. 'They must also conduct Know Your Customer/Customer Due Diligence (KYC/CDD) procedures according to the criteria of the Anti-Money Laundering Office (AMLO) and provide digital asset exchange services according to the type of license granted by the SEC,' as per the SEC. Participants are also required to establish connectivity with e-money operators regulated by the BOT. 'This connectivity would enable foreign tourists to use the converted Thai baht to purchase goods or services through electronic channels including QR code scanning.'
Time of India
5 days ago
- Business
- Time of India
NHAI pauses fund raise; to focus on improving BOT model to entice investors, says MoS Harsh Malhotra, ETInfra
NEW DELHI: Alarming debt levels have led the National Highways Authority of India (NHAI) to pause fund raise and the high Advt Advt way developer is refining the Build-Operate-Transfer (BOT) Model to attract investors and lighten its balance sheet, a senior government official has said.'We have been able to cut down about ₹85,700 crore of NHAI debt and we are improvising the BOT Model so that the debt level further comes down. Additionally, we have decided not to raise further loans. The roads and highways which have already been constructed, we have plans to remonetise them,' said Harsh Malhotra, Minister for Road Transport and Highways, in an interview to ET to extensive road development undertaken by NHAI primarily through borrowings, the authority's debt had risen to about ₹3.4 lakh crore, raising concerns about implications of massive debt on its a Build-Operate-Transfer (BOT) Model, a private developer is responsible for financing, building and operating a project for a specific concession period in which developer is allowed to recover the development investments by way of user charges or tolls charged. Under such a model, the financial burden on the government is limited. However, the model fell out of favour due to land acquisitions, financial risks faced by private to lukewarm response to BOT Model, in the past several years, the government has resorted to Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) Model of road development, in which the government partly or fully takes up the financial highlighted that the next phase of road development by the central government will be focused on developing 40,000 km of high-speed corridors which will enable vehicle speed of up to 120 km/ to the NHAI, the country has about 63 lakh km of road network, of which 1.46 lakh km are national highways on which 50 per cent of India's traffic is transported.'By 2034, development of almost 40,000 km of high-speed corridors is being aimed which can enable vehicles to run at a speed of 100 km/hr to up to 120 km/hr. The Ministry of Road Transport and Highways' vision for 2047 envisages interstate connectivity and economic corridors which connect states and industrial corridors. Highway speed along with economic growth is the vision of the government,' said per the ministry, as of February 2025, 6,669 km length of high speed greenfield corridors have been awarded with construction completed for 4,610 of the major ongoing projects is the Delhi-Mumbai Expressway, which when completed is expected to reduce the travel time between the two cities from 32 hours to about 12 hours.'The Delhi-Mumbai Expressway is being constructed at a cost of ₹12,500 crore and once completed, it will enable the travel between the cities within 12 hours and will have amenities for travelers after every 100 km,' said from high-speed corridors, the ministry is also focused on developing bypasses or ring roads around major Indian cities in order to enable smooth movement of traffic.'A quadrilateral highway connecting the cities of Chitrakoot, Ayodhya, Varanasi, and Gorakhpur is being constructed. The road will touch the cultural sites. In the future, for all major cities such as Indore, Guwahati and others, bypasses or ring roads are being planned,' said who is a member of Parliament from Delhi, outlined that in order to smoothen the traffic to and from Delhi International Airport, the ministry has proposed the development of a 7-km long underground tunnel.'We have proposed constructing a 7 km long tunnel linking Delhi's Nelson Mandela Road with Urban Extension Road-II in order to smoothen the traffic flow to and from Delhi International Airport,' said Malhotra, adding that several road development projects are underway which will ensure traffic from neighbouring states do not enter the capital and congest the NHAI, a 76 km long Urban Extension Road-II is also being developed, which will divert heavy traffic from neighbouring states away from the national capital. By , ETInfra
Business Times
6 days ago
- Business
- Business Times
Thailand seeks ways to curb gold price impact on currency
[BANGKOK] Thailand's central bank and the finance ministry are discussing ways to address currency moves that are not aligned with fundamental factors, including the impact of gold prices, according to a deputy governor. Gold prices are among the non-fundamental factors affecting the baht's movement and authorities are looking at ways to reduce the correlation between the two, Bank of Thailand (BOT) deputy governor Roong Mallikamas said. She declined to say what steps were being planned or how soon they will be announced. 'The baht should act as a shock absorber and not a shock amplifier,' Roong, a contender for the new BOT governor, said on Tuesday (Jul 15). 'So, definitely things that are non-fundamental should be addressed.' The Thai baht typically gets a boost when Thais sell gold, which is highly valued as an investment, as the US dollar proceeds get converted into the local currency. The baht surged about 11 per cent over the past year, turning it into one of Asia's best-performing currencies, while gold climbed to a record in April. Gold link The baht has a much closer link to gold than other emerging Asian currencies, with the two prices having a correlation coefficient of about 0.53 over the past 90 days. A coefficient of 1 would mean they are moving in lockstep. A strong baht is adding to risks to the Thai economy, which is already facing the threat of a punitive 36 per cent US tariff on its exports. The rally has led some ministers and business groups to urge the central bank to weaken the currency to support exports and tourism, the nation's key growth drivers. The BOT has said it does not target any particular level or direction for the baht and its gain over the past year is in line with regional peers. Roong said the baht's outperformance over the dollar index and its high correlation to gold is something the central bank has noticed and trying to address. 'We don't try to stop people from being interested in gold, but we want them to do it in such a way that it doesn't affect the volatility of the baht or make the baht have higher correlation' with gold, Roong said. BLOOMBERG
