After hitting a four-year low, political uncertainties and reports of potential government intervention at the Bank of Thailand have cast shadows over Thailand’s Stock Exchange. The SET index teetered close to 1,300 points following a sharp decline to 1,328.41 post news that the Srettha Thavisin coalition government is exploring ways to assert influence within the central bank.
Speculations have emerged that individuals like Kittiratt Na-Ranong and Supavud Saicheua might be considered for the central bank’s board chairman position once it becomes vacant in September. This move signifies a shift in power dynamics within the regulatory body, raising concerns about the government’s intentions and its impact on economic stability.
The brewing tensions between the government and central bank officials, particularly Governor Sethaput Suthiwartnarueput, highlight differing views on economic strategies. While the government is eager to spur economic growth, individuals like Jitipol Puksamatanan caution that moves to politicize the central bank’s leadership could hinder investor confidence, despite the chairman’s limited direct influence on monetary policy.
Amidst an environment of uncertainty, experts like Apaporn Sawangpak anticipate further market volatility, with the SET index potentially slipping below 1,300 points. Foreign fund outflows could persist as investors await clarifications on political and economic directions, with the looming court decision on the government’s status adding to the apprehension.
Faced with lackluster economic performance compared to global counterparts, including the US and China, Thailand seeks avenues for rejuvenating growth. Factors like the implementation of a digital wallet scheme or resurgence in long-term equity funds could potentially steer the index towards stability, offering a glimmer of hope amidst the prevailing challenges.
