Economists hail BOT appointment

At 45, Veerathai is among the youngest governors in the central bank’s 73-year history. Legendary Puey Ungpakorn was the youngest, taking the helm at 43. With degrees from Harvard Business School, Veerathai previously worked for the International Monetary Fund (IMF), Siam Commercial Bank and the Stock Exchange of Thailand. He was appointed last year to the central bank’s court of directors and serves as a member of the Monetary Policy Committee (MPC).

He is also a member of the government’s "superboard" tasked with restructuring state enterprises.

"This is good news and the markets should welcome this appointment," said Prinn Panitchpakdi, country head at CLSA Securities. "There is no need to ask how well qualified he is. He has vast and extensive credentials and his knowledge in macroeconomic issues is the second to none."

Current BOT Governor Prasarn Trairatvorakul’s term will expire at the end of September, and Veerathai was one of five applicants for the top job.

The others were Paiboon Kittisrikangwan, a deputy BOT governor; Tongurai Limpiti, also a deputy central bank governor; Supavud Saicheua, managing director of Phatra Securities; and Kiatchai Sophastienphong, a former BOT official. Veerathai was the youngest of the candidates, posing doubts on how he could handle the demanding job.

"He is a straightforward person and fair. His age should not be a factor and I believe that the central bank people will also welcome him thanks to his philosophy of good governance and credibility at all the places he has worked at," Prinn said.

Veerathai’s qualifications were also assured by Finance Minister Sommai Phasee, who approved his appointment after the selection committee interviewed the five applicants and shortlisted two of them.

"Both of the final two candidates were well qualified and I have been working with both of them for a long time," Sommai said yesterday after the Cabinet put its stamp of approval on the appointment.

Ampon Kittiampon, chairman of the BOT and the Cabinet’s secretary, said Sommai told the Cabinet that age was not the issue and that he was certain Veerathai was up to the job.

"I’m confident that the BOT’s staff is professional and there should be no problem working with Veerathai. He is a capable young man," Ampon said.

Kiatkong Decho, a strategist at CIMB (Thailand), said Veerathai’s experience at the IMF should help him build connections between the BOT and other central banks.

Kobsidthi Silpachai, head of capital-markets research at Kasikornbank, said Veerathai's appointment "should facilitate coherent economic policies between the government and the central bank, which is important during these challenging times".

Somjin Sornpaisarn, chief executive officer of TMB Asset Management, said Veerathai had strong knowledge on the economy, having served the MPC and been involved with the superboard.

"I always have respect for Veerathai and I am happy that the BOT will have a young and well-qualified governor to steer its policies," he said. Veerathai’s appointment came at the time when the Thai economy is at a crossroads. Prasarn, the incumbent governor, has highlighted a lack of competitiveness in the export sector, which has barred it from reaping full benefits from the global economic recovery.

At present, only tourism and public spending are shoring up the economy. However, mega-projects are yet to kick off while business and consumer confidence remains low, obliging the central bank to cut the policy interest rate twice this year.

Volatility in the financial markets is also expected to increase in line with new global developments.

Somjin said the new governor should concentrate on increasing financial literacy as it is almost as important as financial stability.

Prinn suggested that the central bank look at the possibility of financing infrastructure projects with foreign reserves.In determining the policy rate, it should also weigh the economic outlook rather than only inflation.