Withayak Ratanakorn, Governor of the Bank of Thailand (BOT), is pushing the central bank to step beyond traditional monetary policy and take a more active role in addressing Thailand's structural economic problems, from household debt and credit access to illegal money. In his first interview with Bloomberg News since taking office in October, he said that stability alone is not sufficient. If the economy deteriorates, people become poorer, and businesses gradually close, the central bank cannot claim these issues are unrelated to its duties. Under this approach, the BOT has set four key agendas: resolving household debt and non-performing loans (NPLs), increasing access to financial services, ensuring fairness in interest rates and fees, and tackling illegal money and corruption. Over the past 10 months, the BOT has implemented 15 projects and plans to launch another 5 in the final quarter, including stricter oversight of cash-heavy gold transactions. Meanwhile, Withayak has cut the policy interest rate by a total of 0.50 percentage points, bringing the current rate to 1%, among the lowest in the world. He denied that the BOT would hold rates at this level for an extended period, stating that it depends on data and a forward-looking approach. The relationship between the BOT and the Ministry of Finance under Withayak and Finance Minister Dr. Ekniti Nitithanprapas, who have been close friends since their university days at Thammasat University, has markedly improved. However, this approach has sparked debate over how much the central bank should involve itself in structural problem-solving. Former monetary policy committee members and former BOT deputy governors have questioned whether the BOT risks overstepping its core mandate. Withayak responded via Facebook that the responsibility for maintaining stability has not changed, but the threats to stability have changed, and asked what good it would do if the BOT achieved its stability goals while the economy continued to worsen, businesses closed, and people grew poorer.
BOT rate cuts and dovish policy lower Thai yields.
