FRIDAY BUG
MPC members scarce
Storms have ravaged East Asia, making people in inundated areas struggle and those working in air-conditioned rooms feel a bit chilly, but the members of the Bank of Thailand's Monetary Policy Committee are likely to suffer frostbite.
Its seven members always meet to make economic forecasts and the crucial decision on whether to adjust the key policy interest rate or leave it alone.Each meeting makes is historicaly, but the next meeting, on October 18, will come off quite odd. That's not because the MPC will raise the rate as inflation subsides and the economy slows, but because only four members will be in attendance. MR Pridiyathorn Devakula has been picked to head the government's economic team, which will inevitably result in the MPC losing its chairman. But that is not the end of the story. Two other members are following the chairman. Krirk-krai Jiraphaet on Thursday admitted that he would take a political post. He is expected to take the portfolio at the Commerce Ministry, where he has worked for a long time and will end his civil-service career as its permanent secretary. And the permanent secretary of industry, Chakramon Phasukavanich, is also widely expected to move up to be its minister. In theory and practice, monetary policy committee members are not allowed to be politicians because decision-making could reflect political interests rather than economic fundamentals. On the positive side, the central bank should be proud that its MPC members are regarded so highly that they are in demand to serve the nation during this critical period. No doubt the members left in the cool meeting room will be able to make the right judgement for the country. They could keep the key interest rate unchanged, rather than hike it, which would not make things worse for flood victims. But they will not be able to make themselves comfortable until the missing members are replaced.
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