Thailand's record current-account surplus adds muscle to baht

[webfact]

Thailand's record current-account surplus adds muscle to baht

Currency shrugs off prospects for tighter US money as exporters fret

HIROSHI KOTANI, Nikkei staff writer

 

BANGKOK -- The baht is at its highest point against the dollar in about two and half years, as Thailand's policymakers and exporters worry that the strong currency could hurt industry.

 

The baht, unlike other Asian currencies, also appears immune to speculation that tighter U.S. monetary policy will weaken it.

 

Thailand's large current-account surplus, which is running in excess of $40 billion annually, is contributing to the currency's might. The baht has been rising steadily against the dollar and now trades at around 33 to the greenback, up about 7% from the beginning of the year, outperforming the New Taiwan dollar and Singapore dollar, both of which have risen by more than 6%.

 

Full story: https://asia.nikkei.com/Markets/Currencies/Thailand-s-record-current-account-surplus-adds-muscle-to-baht

 

-- NIKKEI ASIAN REVIEW 2017-10-16

[ukrules]

They seem pleased at this, considering Thailand is a producer and exporter of goods this is far from good news for every sector of industry in Thailand.

 

This article talks about it like it's time to celebrate. If this keeps up exports will be decimated within a few years.

 

 

[GAZZPA]

1 hour ago, ukrules said:

They seem pleased at this, considering Thailand is a producer and exporter of goods this is far from good news for every sector of industry in Thailand.

 

This article talks about it like it's time to celebrate. If this keeps up exports will be decimated within a few years.

 

 

I agree. I also heard somewhere that the Thai Government had empty coffers, not a surplus, hence the sharp tax rises in alcohol and cigarettes (Cigarettes have increased by around 80% in the past couple of years, 15% ish in the last few weeks). Anway, whatever the scenario if it is not controlled soon your prediction I believe is entirely accurate.

[yimlitnoy]

[lannarebirth]

3 hours ago, ukrules said:

They seem pleased at this, considering Thailand is a producer and exporter of goods this is far from good news for every sector of industry in Thailand.

 

This article talks about it like it's time to celebrate. If this keeps up exports will be decimated within a few years.

 

 

It's been working for Germany for a long long time. Of course they've got the devalued Euro to fuel it.

 

[mfd101]

2 hours ago, GAZZPA said:

also heard somewhere that the Thai Government had empty coffers, not a surplus, hence the sharp tax rises in alcohol and cigarettes (Cigarettes have increased by around 80% in the past couple of years, 15% ish in the last few weeks).

The Government's budget deficit and the trade surplus & current account balance are entirely different and unrelated matters.

 

The budget deficit comes from extravagant spending by the government combined with antiquated (and no doubt corrupt) tax collection. The trade and current account surpluses come from real-world exchanges between Thailand and all other countries.

[Curmudgeon1]

1 hour ago, mfd101 said:

The Government's budget deficit and the trade surplus & current account balance are entirely different and unrelated matters.

 

The budget deficit comes from extravagant spending by the government combined with antiquated (and no doubt corrupt) tax collection. The trade and current account surpluses come from real-world exchanges between Thailand and all other countries.

Agreed... the author of this article must of had a point hi liting an interim surplus but has little you do with b$ strength.

[Ricardo]

1 hour ago, mfd101 said:

The Government's budget deficit and the trade surplus & current account balance are entirely different and unrelated matters.

 

The budget deficit comes from extravagant spending by the government combined with antiquated (and no doubt corrupt) tax collection. The trade and current account surpluses come from real-world exchanges between Thailand and all other countries.

 

Exactly !

 

The country is trading strongly which explains the strong Baht, also perhaps held up slightly by local interest-rates (?)  but successive governments have been running a budget-deficit for the past decade or more, spending more than they take-in in tax.

 

Every year they threaten to raise VAT, and every year this increase is deferred, once again.

[RichardColeman]

5 hours ago, webfact said:

The baht, unlike other Asian currencies, also appears immune to speculation that tighter U.S. monetary policy will weaken it.

Sub immune for ignorant. It is not going to end well.

[Eric Loh]

9 minutes ago, Ricardo said:

The country is trading strongly which explains the strong Baht, also perhaps held up slightly by local interest-rates (?

The strong Baht is due to the low oil price. Thailand is a big oil importer importing 80% of its oil consumption. Trade has been drag for last 3 years and only improve this year as world demands improve. 

[Srikcir]

30 minutes ago, Eric Loh said:

The strong Baht is due to the low oil price.

One of Thailand's main exports are petroleum-based products made from crude oil imports. Low oil prices also means low cost of product production and higher net revenues. Higher oil prices will have a double impact on GDP growth.

[Coconut007]

Strong baht makes sense... stable democratic government, no corruption, excellent security for foreign investors, skilled labor, etc

 

And with stronger baht it also makes sense how imported groceries and other stuff is becoming more expensive.

[Grumpy Duck]

2 hours ago, Coconut007 said:

Strong baht makes sense... stable democratic government, no corruption, excellent security for foreign investors, skilled labor, etc

 

And with stronger baht it also makes sense how imported groceries and other stuff is becoming more expensive.

Must be joking, a military junta that overthrew a democratically elected government is not considered democratic at all. 

But yes I also have noticed higher prices for groceries 

[Eric Loh]

4 hours ago, Srikcir said:

One of Thailand's main exports are petroleum-based products made from crude oil imports. Low oil prices also means low cost of product production and higher net revenues. Higher oil prices will have a double impact on GDP growth.

Sweet spot Thailand is in. Low oil price help to achieve current account surplus and better trading and profits for the refineries. 

[ExpatOilWorker]

On 10/16/2017 at 9:07 AM, yimlitnoy said:

In the years leading up to the Nikkei 225 collapse in December 29th 1989, the Yen was also getting stronger. Similar or just a coincident, I am not sure?

The Yuan has also gained in recent years.

[Kieran00001]

On 16/10/2017 at 9:10 AM, lannarebirth said:

It's been working for Germany for a long long time. Of course they've got the devalued Euro to fuel it.

 

 

 

[ExpatOilWorker]

2 minutes ago, Kieran00001 said:

 

 

What are we looking at here? Average daily rainfall in Nakhonnowhere in inches?

[lannarebirth]

6 minutes ago, Kieran00001 said:

 

 

 

You don't think the Euro trades lower than where the Deutsch Mark would if they had retained that currency?

 

[lannarebirth]

2 minutes ago, ExpatOilWorker said:

What are we looking at here? Average daily rainfall in Nakhonnowhere in inches?

I think he's trying to show that contrary to my post the Euro is not devalued as it is up 17% in a year. I was speaking of Germany specifically and I think the Euro is trading well below where the DM would be trading if it had remained.

[Kieran00001]

Just now, ExpatOilWorker said:

What are we looking at here? Average daily rainfall in Nakhonnowhere in inches?

 

It was in reply to...

"Of course they've got the devalued Euro to fuel it."

Do the maths.

 

And Nakhon nowhere?  Nakhon Ratchasima is the second largest city in Thailand, repeating that tired nonsense can only make you sound ignorant, perhaps that was the plan of the person who started it, to see who would blindly repeat it, which would only be those who had been nowhere in this county.

[Kieran00001]

11 minutes ago, lannarebirth said:

 

You don't think the Euro trades lower than where the Deutsch Mark would if they had retained that currency?

 

 

You can still trade marks in and even many shops accept them today, there are over 13 billion still in circulation, they are trading at 1.96 marks to the Euro, but is a little different anyway.

 

You shouldn't worry yourself about such speculations, Germany has chosen to be a charitable nation with an agenda to ending European wealth disparity, there is no reason to assume that they would not have done something similar without the Euro.

[OldSiamHand]

On 10/16/2017 at 11:30 AM, Curmudgeon1 said:

Agreed... the author of this article must of had a point hi liting an interim surplus but has little you do with b$ strength.

interim surplus?  the current account has been in surplus for a long time now, and has a lot to do with the strength of the baht.  this board really hits new lows whenever basic economics becomes a topic.

[overherebc]

12 minutes ago, Kieran00001 said:

 

It was in reply to...

"Of course they've got the devalued Euro to fuel it."

Do the maths.

 

And Nakhon nowhere?  Nakhon Ratchasima is the second largest city in Thailand, repeating that tired nonsense can only make you sound ignorant, perhaps that was the plan of the person who started it, to see who would blindly repeat it, which would only be those who had been nowhere in this county.

You can blame a guy called Roger Crutchley. He had a 'weekly comedy bit' in a well known newspaper and always wrote about his maid as Miss Yasothin from Nakon-nowhere.

It doesn't refer to anywhere in particular, just the north-east in general.

[lannarebirth]

5 minutes ago, Kieran00001 said:

 

You can still trade marks in and even many shops accept them today, there are over 13 billion still in circulation, they are trading at 1.96 marks to the Euro, but is a little different anyway.

 

You shouldn't worry yourself about such speculations, Germany has chosen to be a charitable nation with an agenda to ending European wealth disparity, there is no reason to assume that they would not have done something similar without the Euro.

You may be the only person who believes that. Most think, and I agree, the Euro was adopted to keep their currency weak enough and to create a common currency with European trading partners whose curriencies fluctuated tremendously.

. 

[Kieran00001]

Just now, overherebc said:

You can blame a guy called Roger Crutchley. He had a 'weekly comedy bit' in a well known newspaper and always wrote about his maid as Miss Yasothin from Nakon-nowhere.

It doesn't refer to anywhere in particular, just the north-east in general.

 

Thanks, I didn't know where it originated, but how do you know it refers to the North East and not to Nakhon Si Thamarat, Nakhon Sri Ayuthaya, Nakhon Sawan or any of the other Nakhons not in the North East?  Seeing as Nakhon means capital it seems a little ridiculous to use it with nowhere.

[MyFriend You]

18 hours ago, Grumpy Duck said:

Must be joking, a military junta that overthrew a democratically elected government is not considered democratic at all. 

But yes I also have noticed higher prices for groceries 

" takes a hint like a hunk of wood" comes to mind here, I am sure he was being sarcastic, thats why so many are laughing.

[Kieran00001]

6 minutes ago, lannarebirth said:

You may be the only person who believes that. Most think, and I agree, the Euro was adopted to keep their currency weak enough and to create a common currency with European trading partners whose curriencies fluctuated tremendously.

. 

 

Seeing as I mentioned no reason for the adoption of the currency I find your argument a little one sided, keep at it though.

[theguyfromanotherforum]

Oh look....pages and pages of whine coming up.

 

I don't understand one thing, though.

 

Since everyone has given up on their "nanny state" the logical thing to do would have been to exchange all your currencies to baht.

 

Why the hesitation?

[ExpatOilWorker]

 

11 minutes ago, Kieran00001 said:

 

Thanks, I didn't know where it originated, but how do you know it refers to the North East and not to Nakhon Si Thamarat, Nakhon Sri Ayuthaya, Nakhon Sawan or any of the other Nakhons not in the North East?  Seeing as Nakhon means capital it seems a little ridiculous to use it with nowhere.

I would have thought a guy with a handle that translate to "running stool" would have a bit more humor.

[overherebc]

36 minutes ago, Kieran00001 said:

 

Thanks, I didn't know where it originated, but how do you know it refers to the North East and not to Nakhon Si Thamarat, Nakhon Sri Ayuthaya, Nakhon Sawan or any of the other Nakhons not in the North East?  Seeing as Nakhon means capital it seems a little ridiculous to use it with nowhere.

Probably many times in the beginning was 'up in Nakon Nowhere', I've also heard Udon-Nakon Nowhere.