nigelforbes

THB is not a rapidly rising currency, USD has weakened in recent days from a DI level of 114% to its current 104%. That may have made it feel like THB is strengthening, in fact, USD has weakened. THB has been broadly flat.

This is a story about the competitiveness of Central Bank interest rates, which attract or repel foreign capital investment, along with a desire to reduce inflation, BOT has almost no choice in this matter.

The US equities market is the biggest, it accounts for about 50% of the planets investments in equities and investment markets. USD is the major reserve currency, over 60% of global exports are denominated in USD, oil is priced in USD. Whatever happens to US equities, whatever happens to the value of USD, the contagion effect ensures that the impact is transmitted around the world, to every economy, within days if not hours. If the US hikes interest rates, countries with lower rates see capital outflows as investors go to the US mainland and invest in USD based assets. No this is not coincidence, this is the reality of the US being the dominant market in the world and USD being the dominant currency. Finally, Central Banks don't act entirely on their own initiative, they are custodians of the country's currency and they act within the fiscal policy framework set by government, all of which vary from country to country. The US Fed has increased interest rates to 4.5%, BOT rate is 1.25%, Thailand has seen capital outflows as a result and must play catch up for the sake of its own economy and to keep inflation down. Those things are basic economics, not coordinated efforts.

Which would you like to do, reduce exports or reduce tourism because those are the only two things that will reduce the value of THB?

That's Consumer Debt, not Government Debt. Consumer Debt is too high and is a problem, Government Debt remains low by comparison to many other countries.

BIS is a settlements bank, as the name implies, it complete the actions and instructions undertaken by Central Banks, not the other way around! It is also safe custody on behalf of Central Banks, BOT's foreign currency reserves are held by BIS, not by BOT. It would be virtually impossible for any Central Bank to operate if it was not a member of BIS.

I forgot to add that I agree with your sentiment here, finding a fully trained, good quality doctor who also has ethics and morals is not always easy, far too many are motivated by greed more than anything else. There's another layer of competence which has to do with doctors in the same town, ones who were born in the town, went to University there, became doctors and practiced there. All those doctors will have been trained by the same people, all doctors in one particular specialty will have been trained by the same person and all remain very close for years. I've seen this in action a couple of times. Now, when choosing a doctor I consider why they are where they are. Did they move to Chiang Mai to develop their career or have they never left, I try to avoid the latter. And I do note that specialists each have their own money making tests that they like to push, I think of them as high earner tests. Gastroenterologists like to recommend gastroscopy/endoscopy (35k), cardiologists like to recommend angiograms (50k), Orthopedics love MRI's (20K+) and skin doctors like biopsies (various). It is a minefield, no question.

Nonsense, all central banks are not owned by one center or by the man in the moon.

I forgot to add.....the Dual Tax Agreement (DTA) doesn't exclude the UK State Pension from tax, only government/Civil Service Pensions.

There are many problems but one of the biggest my friend is this: The population is 70 million, the workforce is 39 million, unemployed, very young, very old, unable to work because of health is 31 million. Only 9.6 million people are registered in the tax system. Of the 9.6 million, 3.3 million earned 25k Baht per month or more, the threshold for paying tax. This means, only 12% of the population is registered for and pays tax, that's almost 75% of the workforce that isn't registered for tax and doesn't pay tax. Is this because they are all so poor or is it because they don't want to declare their income and pay tax? The answer, without any doubt whatsoever, is because everyone hides their income and refuses to pay tax. Is this because the 88% who don't pay tax are too poor? Noooo, just dishonest! It's difficult to have a sensible discussion about poverty under these conditions when so few people pay into the tax system but everyone wants to take money out. Your complaint about the 5% who make too much money, they are the businesses who are supporting everyone else. If 1789 does repeat itself and those business owners are sent to Madame Guillotine's equivalent, the population will have it's work cut out, they are going to have work and pay tax otherwise who is going to support the country!

I'm not going to discuss the rights and wrongs of stimulus and the options. I just wanted to make some posters aware of the framework and context within which they were making comments that were coming out of places where the sun don't shine!

The reason for sending the money is not the issue, the issue is that the friend is sending money to an account in a different name from their own, that's why the bank is interested.

Only use Western Union if you have absolutely no other options, it is expensive. I've never heard of a UK bank doing that before but I suppose it might be because your friend is transferring funds to an account with a different name than their own. I suggest your friend goes into a branch to discuss the problem, ask them what they need (paperwork/ID/etc) to make them feel more comfortable with the transaction.

1.5% or 2% thereabouts, the base rate here is much lower at present than in the US plus banks have not passed along all the interest rate rises to consumers.

This is a double edged sword. It's easy enough to reclaim tax paid on earned bank interest, just ask your bank for a statement of interest earned and tax paid. Take that to The local Revenue Office and they will help you complete a tax return and the money will be refunded to you, in accordance with the tax rules. BUT When you complete the tax return you are declaring your income in Thailand. If you receive UK State pension during the same year it was earned, that is also considered to be income which should be declared. Some people will tell you that UK State Pension is already taxed in the UK or is not taxable in Thailand, both of those statements are untrue. The choice is yours, file the tax return and reclaim the tax on bank interest but at the risk of having to declare pension income. In my case, my UK State pension is paid directly into Bangkok Bank in Thailand. But Thai tax deductions are such that I escape virtually all tax, the first 150K baht is zero rated for tax, the personal allowance for over 65 year olds means another 90k is tax free. Further allowances exist for spouse, children, health insurance premiums, life insurance, mortgage payments, etc etc. US Social Security Retirements benefits are not taxable in Thailand so that's excluded income. BTW I know this issue of taxing UK pensions here in Thailand is very emotional for some posters so I'm not going to enter into any debate on the subject. If you don't believe what I have written, please go ask any Revenue office in Thailand, they are extremely helpful and very approachable.

"If you do not count the unemployed, and then count the stimulus measures in as far as giving people money to help the economy, are you really assisting the inflation downward or is it still the same and climbing". You seem confused about what question you want to ask, you've included a number of issues here which when linked into a question, don't make sense. Perhaps ask your question a different way, try rephrasing it. "Why raise energy rates, why raise gas prices", Oil and gas are imports denominated in USD, the oil stabilization fund is deeply in debt and needs to be replenished. Consumer prices have been kept artificially low for a long time and this has been costly. Now that the economy is starting to recover, it's time to recoup some of that expenditure.

"BTW how are 10 million tourists, very few of which are using USD assisting the baht in staying so strong against the USD?" Arriving foreign tourists exchange their home currency for THB in Thailand, that currency is then sold to BOT in exchange for THB which tourists then spend here. The foreign currency that was received, then become part of BOT's Foreign Currency Reserves which grow in volume and are accounted for in USD. Part I of the answer is that the income from those 10 million tourists results in the Current Account being in surplus, which is one of the key factors that causes currency strengthening. Part II of the answer is that the Foreign Currency Reserves are seen to grow, which is also a key factor that causes currency strengthening. Put the two parts together and foreign currency exchange dealers are presented with a robust picture of the Thai economy, which causes THB to increase or at least maintain value.

This is not a case of 30% or 0%, other lower, economically less damaging numbers exist that are a decent compromise, 5% and 10% spring to mind! But to be clear, this is not a matter of choosing a number that suits your personal idea of how much poorer people should earn, just because you have lived in economies where the standard of living is much higher and the population on average earns more. Plus Thailand is not a socialist's economy like so many in the West, including France which has significant social protection and elaborate social programs. One of the reasons why Thailand has been so successful in dragging such a large portion of its population out of poverty is because it hasn't had to finance such things. If you could go back and see Thailand as it was only 25 years ago and compare it to what exists today, you can't begin to imagine the difference.

If it is applied for as a tax deduction and you file a tax return, yes.

Well, you need to go take a refresher course because no sane economist is ever going to advocate giving 30% wage increases to over 50% of the workforce, it would decimate the economy! Supply side inflation of 30% is not tenable in any economy, it would instantly erase profitability of most Thai businesses, increase consumer prices by a similar amount and create mass unemployment that the state would have to subsidize.

You don't understand inflation

The devil you know and all that.

Do you have any idea what that would to inflation, prices, competitiveness of Thai industry and exports. An increase is one thing, a near doubling of minimum wage is something else entirely. Anyway, I haven't come across anyone who works for that sort of wage in years

Only in your conspiracy theory mind is that true, lots of governments in lots of countries gave hand outs to citizens on humanitarian grounds, Thailand was no different.

What monthly salaries are you talking, who, where, they only exist for 5% of the population! Cash payments are made because so many people don't even have bank accounts, have you forgotten where you are!!