Thank God for Prasarn, and Virabongsa, please step down

I couldn’t agree more with Thanong Khanthong that we are living in the middle of a global currency war.

In Thailand, one has to give credit to Prasarn Trairatvorakul, the governor of the Bank of Thailand, for recently resisting the pressure on him to keep lowering the policy interest rate to stem the appreciation of the baht. Prasarn reasoned that the rate that we had was appropriate for the growth potential of the economy. His reasoning was proved to be correct.

Prasarn also wisely did not succumb to the temptation to intervene in the foreign exchange market to weaken the baht. That decision prevented the BOT from losing big money both ways –during the rise of the baht and its decline – which were totally influenced by external factors.

However, it should be noted that contrary to Prasarn’s success was BOT chairman Virabongsa Ramangura’s failure. Virabongsa was wrong in insisting that the BOT’s Monetary Policy Committee should keep lowering the interest rate every time the Thai currency appreciated. His working style has been proven to be outdated and irrelevant to the BOT of today.

Virabongsa should resign before his term expires – to show some spirit.

Vint Chavala

Lamphun