SET Index Faces Potential Decline Amid Bank of Thailand Dispute

The Stock Exchange of Thailand (SET) index is at risk of slipping below 1,300 points following a recent plunge to a four-year low. The uncertainty surrounding the political landscape is contributing to this potential decline, with rumors circulating about the Srettha Thavisin coalition government’s efforts to increase its influence at the Bank of Thailand.

According to reports, the government is considering appointing an ally as the central bank board chairman once the position becomes available in September. This move has raised concerns among investors and experts, who fear that such a decision could impact investor confidence and the overall performance of the central bank.

The current chairman of the Bank of Thailand, Porametee Vimolsiri, is set to complete his term in September, opening up the opportunity for a new appointment. Names like Kittiratt Na-Ranong and Supavud Saicheua have been thrown into the mix as potential candidates for the chairman position.

The ongoing dispute between the government and the central bank reflects broader concerns about the country’s economic growth. With the economy expanding by only 1.5% in the first quarter, there is a pressing need for effective measures to stimulate growth and boost investor confidence.

Experts warn that the SET index could see further decline, potentially dropping below 1,300 points, as investors remain cautious in light of the political uncertainties and lack of economic momentum. Foreign fund outflows are also expected to continue, adding to the challenges facing the Thai economy.

Despite these challenges, there is hope for a potential rebound in the Thai index. Initiatives like the digital wallet scheme and the revival of long-term equity funds could help bolster domestic consumption and attract investors back to the market.

As the situation unfolds, all eyes are on the SET index and the decisions being made regarding the leadership of the Bank of Thailand. The outcome of these developments will have significant implications for Thailand’s economic outlook and investor sentiment in the months ahead.