PM ‘discussed household debt’ situation with central bank chief

Prime Minister Srettha Thavisin discussed economic matters with Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput at Government House over coffee.

The closed-door meeting, which lasted over 30 minutes, came after both sides disagreed over how to implement certain monetary measures to prop up the Thai economy, including the government’s plan to hand out 10,000 baht in digital money to people aged 16 and above.

“The prime minister and the BOT governor discussed tackling debt in the system. The government recently started dealing with debt from illegal lending. The prime minister gave a homework to the central bank governor about how to deal with household debt,” the source said.

Thailand's household debt reached 16.1 trillion baht in the second quarter of last year, accounting for 90.7% of the country's gross domestic product (GDP), according to central bank data.

The source said that the matters discussed between Srettha and Sethaput included updates on monetary policies, policy interest rates, and household debt.

The central bank governor reported to the prime minister about the BOT’s policy interest rates. The source said that PM Srettha, who doubles as the finance minister, did not attempt to intervene in the matter as he was aware of the central bank’s autonomy.

The prime minister told the BOT governor that people he met during provincial trips often complained about their debt, according to the source. “The prime minister shared the information about the debt problem, as the central bank may not have met with the people,” the source said.

During his meeting with the prime minister, Sethaput asked the government to consider adopting the central bank’s recommendations based on study findings, particularly regarding measures to increase incomes of farmers and fragile groups, according to the source. The prime minister agreed to the governor’s suggestion and told him that he would visit the BOT headquarters to inspect its study projects.

“The prime minister is interested in information the central bank has on many matters, such as a map with data on the debt owed by farmers who are customers of the Bank for Agriculture and Agricultural Cooperatives. Such information can be used to tackle the debt problem involving farmers,” said the source.

After the meeting, PM Srettha told the media that he discussed with the central bank chief the current market situation and its impacts on the private sector and public members. Also, he was updated by the governor about what the central bank was doing.

The prime minister also said that he would invite the central bank governor to “have coffee together” with him every week. He may also visit the central bank for a similar meeting.

In a move viewed as an attempt to put pressure on the governor, PM Srettha said earlier this week that the central bank should lower interest rates following a three-month streak of negative inflation rates. He argued that high interest rates were hurting the economy and those most affected were small businesses and low-income groups.

The Thai central bank’s Monetary Policy Committee hinted at an extended pause to avert any potential shocks to the economy and the financial system amid an uncertain outlook. In November, the central bank left its policy interest rate unchanged at 2.50% after eight consecutive increases.