(Bloomberg) — Thailand’s new government is again calling on the central bank to cut borrowing costs, while Prime Minister Paetongtarn Shinawatra’s trade chief is urging policymakers to boost Southeast Asia’s second-largest economy.
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“The central bank may be thinking backwards and too slow,” Trade Minister Pichai Naripthaphan said at a briefing in Bangkok on Monday. “Our economic growth is so slow. BOT should help us to stimulate growth,” said Pichai, who was a key adviser to Paetongtarn’s predecessor Srettha Thavisin.
Bank of Thailand, he said, should manage the baht’s strength, which is already hurting exporters, and also boost liquidity in financial markets. The Thai currency has risen more than 10 percent this quarter, the best performer in Southeast Asia.
The trade chief’s proposal to cut interest rates was the first from Paetongtarn’s cabinet, signaling that the new government will continue to press monetary authorities to reduce borrowing costs, which are currently at their highest since 2013. Pichai backed Srettha’s months-long campaign for lower rates, which had been resisted by central bankers led by BOT Governor Sethaput Suthiwartnarueput.
The Commerce Minister said he will schedule a meeting with Sethaput regarding the issues he raised.
The Thai currency has become “too strong” and has put exporters, especially those with low margins, at risk, Pichai said. The Commerce Department also plans to:
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Support Thai companies that want to expand abroad
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Pursue free trade agreements to boost trade and investment
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Implement measures to prevent cheap imports, particularly from China, from harming local manufacturers
“We will have to work hard amid the global economic slowdown,” Pichai said. “We need to revive the Thai economy.”
–With assistance from Pathom Sangwongwanich.
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