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Daughter of Thai heavyweight Thaksin calls c.bank independence an 'obstacle'

Paetongtarn has been tipped as a potential leader of Thailand

BANGKOK (Reuters) - The politician daughter of Thailand's influential former premier Thaksin Shinawatra on Friday said the central bank's independence was an "obstacle" in resolving economic problems, the latest salvo in an ongoing row over interest rates.

Paetongtarn Shinawatra, the leader of the ruling Pheu Thai party, was weighing in on a disagreement since last year between Prime Minister Srettha Thavisin and the central bank, which has refused to bow to his constant pressure to cut rates.

"The law that keeps the Bank of Thailand (BOT) independent from the government ... is a problem and a significant obstacle in fixing economic problems," Paetongtarn told party members.

Srettha maintains an interest rate at a decade high of 2.50% was hurting small businesses and hamstringing government efforts to jumpstart an economy he says is in crisis. Srettha insists he respects the BOT's independence.

Paetongtarn, who has been tipped as a potential leader of Thailand, said the BOT's monetary policy "refuses to understand and cooperate" and would hamper efforts to reduce high levels of debt.

The central bank declined to comment on Paetongtarn's remarks when contacted by Reuters.

Its governor on Monday said the BOT would not bow to pressure. He told CNBC the current interest rate was appropriate for the economy and any short-term boost a rate cut could give was "not an efficient trade-off" when weighed against longer-term unintended consequences.

Comments from Paetongtarn carry weight in Thailand, with her father Thaksin the billionaire figurehead of a party that has long dominated politics, winning all but one election in the past two decades.

In his first term in office, Thaksin sacked the central bank governor over monetary policy disagreements.

He is still a towering figure in Thailand and made a dramatic return home in August after 15 years in self-exile to face a jail sentence for conflicts of interest and abuse of power. He was released in February on parole after six months in detention and maintains he has retired from politics.

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