Latest news with #Vitai
Bangkok Post
22-07-2025
- Business
- Bangkok Post
Gamut of challenges await BoT governor
The new governor of the Bank of Thailand (BoT) will immediately face challenges as business leaders want him to push for measures to reduce loan interest rates and relax lending criteria among state and privately-run banks as well as avoid a surge in the value of the baht. "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.
Bangkok Post
22-07-2025
- 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
22-07-2025
- 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
22-07-2025
- 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
Bangkok Post
15-07-2025
- Business
- Bangkok Post
Cabinet to make Bank of Thailand governor decision next week
Finance Minister Pichai Chunhavajira brushed aside concerns about any last-minute problems after his choice for Bank of Thailand governor was not placed on the agenda of Tuesday's cabinet meeting. Mr Pichai said his recommendation would definitely be put forward for approval at next week's cabinet meeting. He said he had been very busy and he had forwarded the paperwork for the nomination to the cabinet secretary a little late, so it ended up in a queue behind other scheduled agenda items. 'As the Bank of Thailand governor is an important position and I was a bit late, the cabinet needs time to carefully review it. That's why it hasn't been included yet. But I can confirm, it will definitely be submitted next week,' said Mr Pichai. Two government sources and two Thai media outlets said earlier that the minister would propose Vitai Ratanakorn, president of the Government Savings Bank, as the next central bank chief. Mr Vitai was one of the last two candidates left standing from an original pool of six, along with Roong Mallikamas, a BoT deputy governor for financial institutions stability. The appointment of Mr Vitai, 54, would be subject to cabinet and royal approval. He would serve a five-year term starting Oct 1, succeeding Sethaput Suthiwartnarueput, who has reached retirement age. Mr Pichai declined to elaborate on his choice, or to be drawn out when asked if appointing an 'outsider' to head the central bank might lead to operational issues. 'Whether they are an outsider or insider, I can work with anyone. My way of thinking is different from others anyway,' he said. According to central bank regulations, a new governor must be appointed at least 90 days before the current governor's term ends. However, this time frame has now passed. Nevertheless, the law does not specify any penalties for failing to make an appointment within that deadline. A source from the Ministry of Finance said the government is seeking a new central bank governor with a fresh and different vision — one who can make monetary policy more supportive of the sluggish economy than it currently is. Mr Vithai, who was the last person to apply for the position, is reportedly being backed by former premier Srettha Thavisin and Mr Pichai, both of whom want to bring about a change in the central bank's strategic direction. The GSB president was seen as an innovator at the state bank, and he is also known to favour cutting interest rates to spur economic growth. The Pheu Thai-led government at times has been highly critical of Mr Sethaput for not cutting rates early or often enough. But the outgoing central bank chief has countered that quick fixes won't help an economy in need of fundamental reforms. Unity seen as crucial Siri Ganjarerndee, former assistant governor of the central bank and current chairman of Tris Rating, said the new governor should serve as a bridge between the government, the finance ministry and the central bank. 'In my opinion, the government should work closely with the Bank of Thailand, and any differences in economic perspectives should be addressed behind closed doors,' he said, downplaying concerns over potential political interference in the appointment of the new governor. 'That is the best way to foster effective cooperation. In the past, such coordination worked well. When disagreements play out in public, it creates an impression of disunity in economic management. And I think it should not be that way. Unity is crucial, especially when Thailand is facing multiple challenges.' He emphasised that the Bank of Thailand is a state agency, and from an outsider's perspective, internal conflicts between state agencies are undesirable. 'Disagreements should lead to discussions — not confrontations — in order to build confidence among the business community and the general public,' he added. 'All sectors of the economy have important roles to play in maintaining stability. They must work together cohesively. Thailand has limited resources, and working at cross-purposes is a waste of those resources,' he warned. Whoever is chosen to head the central bank faces the tough task of supporting a struggling economy facing tepid consumption, high household debt and steep US tariffs, with limited monetary policy room.
