Surapong says no rift with central bank

He insisted he would give the central bank independence in running monetary policy. His comment came after his deputy, Suchart Tadatamrongvech, indicated that Tarisa Watanagase, central bank governor, might be removed.

Surapong said yesterday that he would give the central bank's Monetary Policy Committee a free hand to decide on whether the key policy rate should be raised.

"I will not intervene, but let the MPC consider the policy rate. I will, however, make a comment after their meeting," said Surapong. He went further and said that if he did not express his opinion the public might assume that he approved the MPC's decision.

"I did not raise my voice about the introduction of the two- and three-digit lotteries, so I have faced a legal suit," Surapong lamented.

Meanwhile, Virabongsa Ramangkura, chief economic adviser to the prime minister, yesterday also denied a rumour that he planned to have Prime Minister Samak Sundaravej sack the central bank governor. He admitted that he had criticised the governor, but as the adviser, he "had a different responsibility".

On apparent conflicts between the Finance Ministry and the Bank of Thailand, the advisory team is ready to seek a compromise. He was also confident that the team could work closely with both institutions.

"I will be less critical now that I wear a new hat. My role is just to present proposals to the PM," Virabongsa said.

Surapong also referred to a memorable line from a Spider-Man movie:

"With great power comes great responsibility". He dismissed the report that the two organisations have conflicts over interest-rate policy. He said it was only a difference of opinion about the previous interest-rate increase of 0.25 per cent while the two institutions still coordinate on macro-economic polices.

"Don't worry about unity of policy, a different view is aimed at preventing us falling into a deep valley," he said. Surapong said he believed that a rate increase would not be effective in tackling high inflation.

Those countries that raised interest rates have recently faced economic downturns while the United States, which kept the rate unchanged, is doing better, said Surapong.

 As oil prices recently fell, Surapong believed that headline inflation would be about 7 to 8 per cent - not reaching double digits as many fear - while the country could achieve economic growth close to 6 per cent.

He was confident that politics would be more stable from now on as street protests would not rock government stability. He said he was not sure about reports suggesting ex-prime Thaksin Shinawatra would seek political asylum aboard. He does not expect a dissolution of Parliament or another coup.  

Surapong is optimistic about investment, as the government this year will start to implement mega-projects worth Bt200 billion for the 2009 fiscal year.

The projects included mass transit, double rail, irrigation, expansion of the new international airport, investment in public health and education.