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Former IMF economist emerges as favourite to head Thai central bank

[BANGKOK] Veerathai Santiprabhob, a former International Monetary Fund economist, emerged on Tuesday as the front runner to takeover as governor of the Bank of Thailand once the current central bank chief steps down in September.

Whoever replaces Prasarn Trairatvorakul will face the task of helping stimulate an economy still sputtering one year after the army seized power to end political unrest.

Finance Minister Sommai Phasee disclosed that Mr Veerathai, currently a member of a "super board" appointed by the junta to oversee state firms and a member of the central bank's monetary policy committee, was on a short list of two.

The other contender is Supavud Saicheua, the managing director of Phatra Securities, as three other candidates, including two deputy governors, appear to have lost out.

"Supavud has never worked with the central bank, while Veerathai used to work with me and the NCPO," the minister told reporters. He was referring to the National Council for Peace and Order, as the junta calls itself since last May's coup.

Mr Veerathai was formerly an executive at the Stock Exchange of Thailand and Siam Commercial Bank. Earlier, he had worked for the IMF in Washington and the Thai Finance Ministry's policy research institute. He holds a doctorate in economics from Harvard University.

Mr Sommai said he would need another two weeks to make his choice, which will then need the approval of both the cabinet and Thailand's king. Mr Veerathai, however appeared to be favourite for the job.

"Most people I talked to seem to suggest Veerathai," said Santitarn Sathirathai, economist of Credit Suisse in Singapore. "I think he's very progressive in his thinking."

Thailand's Monetary Policy Committee has seven members, comprising the central bank governor and two deputies, along with four outside experts.

The MPC left the benchmark interest rate steady at 1.50 per cent this month after two surprise cuts in a row to try to spur an economy suffering from weak exports and domestic demand.

On Monday, Mr Sommai said the new governor "must be a person who can withstand political friction", in a nod to the decade of political strife encountered by previous governors. "It is important for the central bank to maintain its independence," said Tim Leelahaphan, economist at Maybank Kim Eng.

"The BOT is often criticized for its monetary policy decisions and we often hear that there are direct orders or pressures from the government."