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Central bank chief asked to quit


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Thailand’s fight against inflation:
Central bank chief asked to quit

Thailand's deputy finance minister called on the central bank governor to resign on Friday because of her insistence on raising interest rates to beat inflation rather than promoting economic growth, as the government wants, Reuters quoted the newly-appointed minister as telling FM 98 Business Radio, a local broadcaster.

"In the past, when a central bank governor disagreed with the government he (or she) resigned," Suchart Thadathamrongvej said, firing the strongest salvo yet in the fight between the government and monetary authorities over decade-high inflation.

"This government's policy is growth-targeting, not inflation-targeting," Suchart, a former economics professor and adviser to Finance Minister Surapong Suebwonglee, said.

The central bank, which raised rates last month for the first time in two years and hinted at more to come if inflation stayed high, has been at odds with the government, which fears higher rates will hit economic growth and its sagging popularity.

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Suchart's radio comments reinforced reported remarks made during an economic seminar on Thursday.

He said he would soon meet central bank chief Tarisa Watanagase, who has not made any major public comments since the interest rate brouhaha erupted around two weeks ago.

Suchart said that if Thailand got its monetary and fiscal policies "pointing in the same direction", the economy could grow at 8 percent. The government's current 2008 growth forecast is 6 percent.

The country's fiscal, monetary, and energy policies are key to addressing the ongoing economic woes. Such policies must be implemented in a coordinated manner, the Thai News Agency (TNA) quoted Suchart Thadadamrongwej , the newly-appointed deputy finance minister as saying Thursday.

Surapong, who has criticised the central bank's currency policy but stopped short of calling for Tarisa's head, is due to speak at an economic seminar on Friday morning.

On Thursday, deputy central bank governor Atchana Waiquamdee said the bank still needed to tackle inflation to ensure sustainable economic growth in the long term, signalling another possible rate rise at its next meeting on Aug. 27.

She also said the bank was ready to consult the government about economic policy, but asked for independent monetary policy.

The central bank raised rates by 25 basis points to 3.50 percent last month to quell inflation running at a 10-year high of 9.2 percent in July.

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