Not since the dark days of dictatorship
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Time has proved that the central bank can best function in its monetary role [by] remaining independent from government fiscal policy and uninfluenced by the political concerns of any regime.
The IMF gives higher scores in its reviews to an independent central bank than one that is not independent.
The resolution by the Cabinet ordering the central bank to take on responsibility for the Bt1.14 trillion debt can be regarded as half-baked financial discipline. The government’s direct intervention has never been used since Field Marshall Sarit Thanarat. That autocrat coerced the then BOT governor Puey Ungpakorn to loosen the economy. The strong-willed governor declined and was prepared to face unpleasant music. Sarit backed down and reportedly greatly admired that governor. Since then the BOT was hailed, after the judiciary branch, as the most respected and independent agency. The current scenario of the duel between the executive branch (government) and BOT is a repeat, but the result is dissimilar.
Songdej Praditsmanont
Bangkok
