Thailand’s military-led government on Tuesday selected Veerathai Santiprabhob, a former International Monetary Fund economist, to be the governor of the Bank of Thailand for five years, starting Oct. 1.
He will replace Prasarn Trairatvorakul, who ends his tenure at the end of September. Veerahai, a 45-year-old economics Ph.D. from Harvard University, last month emerged as the front-runner to lead the central bank, which oversees monetary policy.
The new chief will face the tough task of helping boost Southeast Asia’s second-largest economy, which is still stumbling a year after the army seized power to end political unrest.
Veerathai is currently a member of a “super board” appointed by the junta to oversee state firms and one of four outside experts on the central bank’s seven-member Monetary Policy Committee.
On Tuesday, the cabinet endorsed Finance Minister Sommai Phasee’s choice of Veerathai. The other short-listed candidate was Supavud Saicheua, managing director of Phatra Securities.
Reaction to Veerathai’s approval was positive.
“He is capable and has experience from working with the IMF. He should have a good relationship with other countries,” said strategist Kiatkong Decho of CIMB (Thailand)
Veerathai was formerly an executive at the Stock Exchange of Thailand and Siam Commercial Bank. During the Asian financial crisis, he worked with the Finance Ministry’s policy research institute.
Sommai said earlier the new governor “must be a person who can withstand political friction”, a nod to the political strife faced by some previous governors.
Kobsidthi Silpachai, head of capital markets research at Kasikornbank, said Veerathai’s appointment “should facilitate coherent economic policies between the government and the central bank, which is important during these challenging times”.
Charnon Boonnuch, an economist from Tisco Securities, said he expects “no big changes” at the central bank, as its policy is not set by an individual.
“I think he will be neutral but leaning towards a dovish stance” as the economy is stagnating, he said.
The Monetary Policy Committee left the benchmark interest rate steady at 1.50 percent in June after two surprise consecutive cuts to try to lift an economy suffering from weak exports and domestic demand.. It next reviews policy on Aug. 5.
The economy grew only 0.9 percent last year, with political crisis bringing it to the brink of recession in the first half.
The central bank recently cut its 2015 economic growth forecast to 3.0 percent from 3.8 percent.