Sunday, August 10, 2008

Surapong shows off his 'spider sense'


Central bank governor Tarisa Watanagase as Spiderman? So suggests Finance Minister Surapong Suebwonglee.

Asked yesterday about a growing feud between the Finance Ministry and the Bank of Thailand over interest rate policy, the minister played down any conflict.

But he followed his comments with an enigmatic quote borrowed from the hit movie Spiderman: ''With great power comes great responsibility.''

More seriously, Dr Surapong said he respected the central bank's independence in conducting monetary policy and firmly denied reports that he would push for a change in governors.

''It's not something that will happen because of a difference of opinion. If that was the case, then many people would have to leave office,'' he said.

''As the finance minister, I will not interfere in interest rate policies set by the Monetary Policy Committee. But once they decide, the minister does have the right to comment on the decision.''

The central bank maintains that interest rates must rise in light of inflationary pressure from higher oil and food prices. Its Monetary Policy Committee (MPC) last month raised short-term rates for the first time in 13 months by a quarter-point to 3.5%, and most analysts expect additional rate hikes in the months ahead.

But ministry policymakers and government economic advisers have been critical of hiking rates when economic sentiment remains weak and households and companies face higher expenses.

Dr Surapong noted that Europe had raised rates to curb inflation, and economic activity had slowed. The US, on the other hand, had been slower to raise rates, resulting in growth continuing.

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