The addition of two new members to the Bank of Thailand’s interest-rate-setting panel promises to bring a fresh perspective to the central bank, traditionally known for its unanimous decisions.
Roongrote Rangsiyopash, the chief executive of Siam Cement Plc, and Santitarn Sathirathai, the former chief economist at Sea Ltd, joined the BoT’s seven-member Monetary Policy Committee this month, at a time when discontent over rate hikes is brewing within the government.
While the MPC is comprised of three central bank officials and four external members, one of the latest entrants represents the voice of the real economy, a term that refers to non-financial sectors. Roongrote brings extensive industry knowledge, given his experience managing Siam Cement, a Thai conglomerate with businesses across segments.
“We value independence and integrity,” BoT governor Sethaput Suthiwartnarueput said in an interview. “Our members vote on what they think, without any influence from others.”
A laggard in raising borrowing costs last year, the BoT has since moved by a quarter-point each for eight straight meetings. Seven of those decisions were unanimous, and were preceded by two meetings that saw dissent among policymakers. With dissents typically signaling a change in the Thai monetary policy, those tracking the central bank will be paying close attention to how the new members vote.
“The two new members will be able to bring fresh views from the business and digital economy perspectives,” said Erica Tay, an economist at Maybank Investment Banking Group. “But fresh does not necessarily mean dissenting.”
Japan’s experience shows changes to the monetary committee can alter the voting pattern. After nearly five years of split decisions, Bank of Japan’s meeting outcomes turned unanimous since September 2022 after Goushi Kataoka, one of the dissenters, left the board following the July meeting that year. (continues below)
Santitarn Sathirathai.
Although dissents have had little impact on Japan’s policy direction, in Thailand a 4-3 vote in June paved the way for a tightening at the next meeting. In August, one member favored a larger 50 basis-point move, and that split was followed by a string of rate hikes, albeit at a measured pace of 25 basis points.
“The MPC job always comes down to seeking a balance between growth and inflation, so the variety of views is quite important,” said Santitarn, the youngest MPC member at 42 years.
Prior to his stint at Singapore-based Sea, which owns e-commerce brand Shopee, he served as an economist at Credit Suisse. The BoT is scheduled to review rates next on Nov 29. With inflation still drifting below the central bank’s 1%-3% target and economic growth gaining traction, the authority has already signaled that the current rate is appropriate to ensure price stability as well as support business and consumption activity.
“We do not expect the two new members to swing or change the policy direction, as recent MPC votes have been unanimous in their decisions,” said Chua Hak Bin, senior economist at Maybank.
No action by the BoT later this month would club it with central banks in Singapore and Malaysia that opted to pause, while peers in Indonesia and the Philippines resorted to tightening. “Our rate decision process has been evolved over decades with positive developments,” said Sethaput, who has been an MPC member since 2014 before assuming charge as head of BoT in 2020.
“We now have more extended quality of discussion among members and more forward-looking.”
