Virabongsa airs doubts about Prasarn
Sarun Kijvasin
The Nation
Virabongsa Ramangkura
BANGKOK: -- Virabongsa Ramangkura, chairman of the central bank's board of directors, expressed his dissatisfaction with the performance of the Bank of Thailand governor but refused to reveal whether the board itself on Wednesday night approved of Prasarn Trairatvorakul's record.
"I cannot reveal that, but I want the central bank to be a pillar of economic sciences in relation to monetary policy and be able to explain to the public what it does," Virabongsa said in response to reporters who wanted to know about the outcome of the annual review of BOT Governor Prasarn.
Since monetary policies have advantages and disadvantages and also side effects, the central bank has to weigh the pros and cons of its actions, Virabongsa said. It must be able to explain to the public why it chose to implement a particular policy.
Differences of opinion are normal, as everyone has a reason for his or her judgement, he said.
Virabongsa had earlier spoken out against the inflation-targeting policy implemented by the BOT. He shared Finance Minister Kittiratt Na-Ranong's idea that the central bank should not be concerned too much with the threat of inflation.
The two had called for an interest-rate cut to boost economic growth. Prasarn and senior BOT executives argued that inflation targeting had also accommodated economic growth.
The row reached the International Monetary Fund, which threw its support behind Prasarn and warned against political intervention in the functioning of the central bank. The IMF praised the BOT for its ability to achieve price stability while implementing its inflation-targeting policies.
Regarding banking supervision, Virabongsa said he was quite satisfied with the central bank's performance.
However, some bankers have complained about the distant relationship between the regulator and those who are regulated. They want the central bank to have more informal channels for contact.
"For me, it is understandable that the central bank's supervision officials would not want to have an informal relationship with bankers. It is a custom. However, it could be flexible as more communication could lead to more understanding of the industry's insight," Virabongsa said.
Three other board members joined him at Wednesday's meeting - Siri Karncharoendee, Borwornsak Uwanno and Kanit Sangsuban. This is the first review of the BOT governor's performance this year, to be followed by a second round.
The latest review of Prasarn's performance was by former central bank chairman MR Chatu Mongol Sonakul, who gave the BOT chief a high grade of 85 points out of 100.
-- The Nation 2012-09-14
