Chatu Mongol prefers sterilisation to rate cut
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To cope with the rapid appreciation of the Thai baht, former central bank chairman MR Chatu Mongol Sonakul on Monday recommended the Bank of Thailand to scale up its sterilisation rather than cutting the policy rate.
He told reporters today that a lower policy rate may spur spending and hence inflation. This may lead to excessive borrowing and bubbles in property prices, he added.
He also commended that the Bank of Thailand's independence has been maintained, reflecting through the performance in the past four months.
Referring to the growing pressure on Bank of Thailand governor Prasarn Trairatvorakul, he said the governor cannot be dismisssed on grounds that the central bank fails to follow the government's orders.
Under the amended Bank of Thailand Act, the governor can be dismissed only because of malpractices.
