July 29 (Reuters) - Thailand selected an economic advisor to the prime minister and former World Bank economist on Wednesday as its new central bank governor, with the task of navigating the country through the economic fallout of the coronavirus pandemic.
Sethaput Suthiwart-Narueput, 55, a member of the central bank’s Monetary Policy Committee (MPC) and holder of an economics doctorate from Yale University, will replace Veerathai Santiprabhob from Oct. 1.
The following is reaction to his appointment.
KOBSIDTHI SILPACHAI, HEAD OF CAPITAL MARKETS RESEARCH OF KASIKORNBANK:
“The selection of Dr. Sethaput helps to soothe market concerns as he is well known and respected by the financial markets in his capacity as an MPC member along with the multitude of past roles in the financial private and public sector.”
Kobsidthi said the new BOT chief should work smoothly with a new finance minister as both are “seasoned bankers so there are cultural parallels”.
“He is sticking to the textbooks to some extent, similar to Veerathai. He is likely to look at economic data before reacting. If the economy gets worse or there is a lockdown or a second wave of coronavirus, there is a chance of further rate cuts”.
“We see limited monetary policy implications from the appointment of Sethaput as the new governor, given that he has been an MPC member since 2014.”
“Despite his last-minute application and his role as an economic advisor to the prime minister, we do not think that his appointment raises any concerns about central bank independence and expect it to be maintained under his leadership, given his track record of credibility during his extensive roles in both public and private sectors, which is also similar to the incumbent governor.”
“Being a former MPC member and World Bank economist, he should have as good a grip on the policymaking as his predecessor.
“As the BOT has almost run out the of tools to further support the economy in this ongoing slump, I think the markets will all the more be anxious to know if the new governor would steer the policy towards quantitative easing. I remain sceptical about that being an option just yet, not in the near term.” (Reporting by Orathai Sriring and Satawasin Staporncharnchai, complied by Martin Petty Editing by Ed Davies)