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THB: Baht Remains Under Pressure Amid Concerns Over BoT Independence

THB
GlobalEM BulletBulletAPACEmerging Market NewsRegionThailand

The baht is set to finish the session as the worst performer in the Asia EM basket amid multiple reports suggesting that ex-Finance Minister, ex-Pheu Thai member & BoT critic Kittiratt Na-Ranong will be tapped to become the new central bank chairman. Spot USD/THB trades +427 pips at 34.798, crossing above its 100-DMA, with bulls looking for a move through the 35.0 figure.

  • Although the BoT Board Chairman does not sit on the Monetary Policy Committee (MPC), he has a say over the appointments of Committee members and can assess the performance of the BoT Governor. Earlier rumours surrounding Kittiratt's potential nomination sparked concerns over political interference due to his ties with the ruling Pheu Thai Party (PTP).
  • Kittiratt previously demonstrated his dovish bias, both while serving as Finance Minister in Yingluck Shinawatra's cabinet in 2013 and in his capacity as advisor to then-Prime Minister Srettha Thavisin. In this more recent role, he toed party line in repeatedly calling on the BoT to loosen monetary policy.
  • The nomination negates the earlier impact of talks between the BoT and the MoF in which the central bank managed to persuade the government not to change the current +1%-3% Y/Y inflation target, even as Finance Minister Pichai Chunhavajira demanded that the central bank takes steps to boost price growth to +2% Y/Y.
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The baht is set to finish the session as the worst performer in the Asia EM basket amid multiple reports suggesting that ex-Finance Minister, ex-Pheu Thai member & BoT critic Kittiratt Na-Ranong will be tapped to become the new central bank chairman. Spot USD/THB trades +427 pips at 34.798, crossing above its 100-DMA, with bulls looking for a move through the 35.0 figure.

  • Although the BoT Board Chairman does not sit on the Monetary Policy Committee (MPC), he has a say over the appointments of Committee members and can assess the performance of the BoT Governor. Earlier rumours surrounding Kittiratt's potential nomination sparked concerns over political interference due to his ties with the ruling Pheu Thai Party (PTP).
  • Kittiratt previously demonstrated his dovish bias, both while serving as Finance Minister in Yingluck Shinawatra's cabinet in 2013 and in his capacity as advisor to then-Prime Minister Srettha Thavisin. In this more recent role, he toed party line in repeatedly calling on the BoT to loosen monetary policy.
  • The nomination negates the earlier impact of talks between the BoT and the MoF in which the central bank managed to persuade the government not to change the current +1%-3% Y/Y inflation target, even as Finance Minister Pichai Chunhavajira demanded that the central bank takes steps to boost price growth to +2% Y/Y.