(Bloomberg) -- Thailand is set to appoint a former bureaucrat as the new chairman of the Bank of Thailand, capping a contentious selection process that saw the government fail in a bid to push through the candidacy of a controversial former minister.
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Somchai Sujjapongse, 63, will be the new chairman of the BOT’s 12-member board, according to a person familiar with the matter. Somchai, proposed by the Ministry of Finance, will assume office once his appointment is approved by the cabinet and the king, said the person who declined to be identified since details of the matter are private.
Sathit Limpongpan, who headed an independent selection panel, told reporters that the group made a decision on Friday but declined to divulge its choice. Pornchai Thiraveja, a spokesman for Finance Ministry, declined to comment. Krungthep Turakij newspaper reported Somchai’s selection earlier.
The 63-year-old Somchai was a compromise candidate after government’s first pick, ex-Finance Minister Kittiratt Na-Ranong, was publicly opposed by former governors and economists, and ultimately deemed unfit due to his links to the ruling Pheu Thai Party. The BOT nominated Surapon Nitikraipot, an academic, for the job.
While the chairman doesn’t decide on monetary policy, they have a say in who joins the rate-setting panel and committees on financial institutions and the payment system, and Kittirat’s candidacy was widely seen as a bid by Prime Minister Paetongtarn Shinawatra’s administration for greater sway over the central bank.
The BOT surprised markets this week by cutting borrowing costs just days after a direct appeal by the prime minister to reduce rates to help stimulate Southeast Asia’s second largest economy.
While the government failed with its nomination of Kittiratt, a critic of the BOT’s hawkish monetary policy, it may still seek influence through the appointment of Somchai, who from 2015 to 2018 was the top bureaucrat in the finance ministry. The new chair can give his views on broad economic conditions to the rate panel for their consideration, Finance Minister Pichai Chunhavajira said earlier this year, describing Somchai as fully qualified for the job.
Paetongtarn’s administration will also get an opportunity to pick the successor to incumbent Governor Sethaput Suthiwartnarueput, a staunch advocate for the central bank’s independence who has only cut rates twice in the past year despite relentless pressure from the government. Sethaput’s five-year term ends at the end of September and he’s ineligible for reappointment under central bank rules as he turned 60 earlier this year.