Thailand Denies Baht Manipulation Ahead of U.S. Currency Report

[webfact]

Thailand Denies Baht Manipulation Ahead of U.S. Currency Report

By Sunil Jagtiani

 

-- Thai commerce minister says trade ties with U.S. are healthy

-- Country at risk of meeting U.S. criteria on unfair practices

 

Thailand rejected claims that it engages in unfair currency practices to gain a trade advantage, even as the nation appears close to meeting U.S. criteria on exchange-rate manipulation.

 

In fact, the central bank faces criticism for doing too little to curb gains in the baht, the strongest performer in Asia this year, according to Commerce Minister Apiradi Tantraporn. Countries that aim to boost overseas sales normally prefer weak currencies to make their goods cheaper.

 

"I don’t think manipulation is what we have been doing, what we have been practicing," Apiradi said in an interview at her office near Bangkok.

 

Full story: https://www.bloomberg.com/news/articles/2017-10-17/thailand-denies-baht-manipulation-ahead-of-u-s-currency-report

 

-- Bloomberg 2017-10-18

[Somtamnication]

This will be interesting. 

[Ricardo]

Isn't  "criticism for doing too little to curb gains in the baht"  suggesting that the BoT is & should indeed be manipulating the currency to some extent, and then  "Countries that aim to boost overseas sales normally prefer weak currencies to make their goods cheaper"  suggesting that their efforts aren't very well carried-out, or effective ?

 

The question in my mind is more, why do Thai exporters do so well, despite the relatively-strong Baht ?  Are there perhaps hidden exports, or more demand from tourist-spending, which somehow aren't reflected in official-figures ? 

 

And why does the BoT not reduce domestic interest-rates, to weaken the Baht against the world's main trading-currency, more readily  ...  it's a mystery !  What are their reasons, fear of a domestic credit-crisis, domestic political-considerations or what ?

 

I've watched the strong Baht for over a decade, and wondered what are the factors influencing it, since the late-90s spending-bubble & crash but must confess that I'm still puzzled.

[Cadbury]

44 minutes ago, Ricardo said:

Isn't  "criticism for doing too little to curb gains in the baht"  suggesting that the BoT is & should indeed be manipulating the currency to some extent, and then  "Countries that aim to boost overseas sales normally prefer weak currencies to make their goods cheaper"  suggesting that their efforts aren't very well carried-out, or effective ?

 

The question in my mind is more, why do Thai exporters do so well, despite the relatively-strong Baht ?  Are there perhaps hidden exports, or more demand from tourist-spending, which somehow aren't reflected in official-figures ? 

 

And why does the BoT not reduce domestic interest-rates, to weaken the Baht against the world's main trading-currency, more readily  ...  it's a mystery !  What are their reasons, fear of a domestic credit-crisis, domestic political-considerations or what ?

 

I've watched the strong Baht for over a decade, and wondered what are the factors influencing it, since the late-90s spending-bubble & crash but must confess that I'm still puzzled.

Yes indeed, a mystery! High finance movers and shakers might well have some underground manipulative influence over the baht. To their financial advantage of course.

Also with a strong baht does it follow that if exports become more expensive for overseas buyers then imports become cheaper for Thailand buyers? Like buyers of military equipment such as submarines, miscellaneous armament, tanks, naval missile systems, APC's, helicopters, jet fighters etc. If so, then that would be convenient for a shrewd (tricky) government. 

 

[DPKANKAN]

24 minutes ago, Cadbury said:

Yes indeed, a mystery! High finance movers and shakers might well have some underground manipulative influence over the baht. To their financial advantage of course.

Also with a strong baht does it follow that if exports become more expensive for overseas buyers then imports become cheaper for Thailand buyers? Like buyers of military equipment such as submarines, miscellaneous armament, tanks, naval missile systems, APC's, helicopters, jet fighters etc. If so, then that would be convenient for a shrewd (tricky) government. 

 

Baht should be through the floor, but it is not a traded currency so has escaped so far!

[Ricardo]

55 minutes ago, Cadbury said:

Yes indeed, a mystery! High finance movers and shakers might well have some underground manipulative influence over the baht. To their financial advantage of course.

Yes, I suspect this went on, during the 1997 currency-crisis for example.

 

55 minutes ago, Cadbury said:

Also with a strong baht does it follow that if exports become more expensive for overseas buyers then imports become cheaper for Thailand buyers?

Yet no sign of this happening, as others have said in similar recent threads, when it ought to be making imported-goods cheaper on supermarket-shelves !  So someone in the supply-chain simply improves their margins, at the customers' expense, who'd have thunk it here in Thailand !

 

55 minutes ago, Cadbury said:

Like buyers of military equipment such as submarines, miscellaneous armament, tanks, naval missile systems, APC's, helicopters, jet fighters etc. If so, then that would be convenient for a shrewd (tricky) government.

But total military-spending, running-budgets as well as new-equipment, are reportedly only 1.5% of GDP and 7% of total government-expenditure, so are in fact relatively-low. Therefore that doesn't explain it.  Nice theory, but  ...

 

https://thediplomat.com/2016/09/the-truth-about-thailands-2017-defense-budget-hike/

 

So there are probably other much-more-significant reasons for the long-standing strength, one of course being the relative weakness of major currencies, since the early/mid-2000s boom stuttered & ended, and Thailand's own domestic-boom with it.

 

Hopefully one of TV's resident-experts might have a better idea ?

[mikebell]

So if imports are cheaper, how can Tesco Lotus justify a 35 baht rise on All Bran?  They've just lost my 3000 a week custom.

[janclaes47]

For those that haven't figured it out yet, the US accuses Thailand of manipulating their currency to the downside, to improve exports.

 

If this is true, and they would stop the currency manipulation as many posters are confident they are doing, you will get even less Baht for you home currency

[JAG]

13 minutes ago, mikebell said:

So if imports are cheaper, how can Tesco Lotus justify a 35 baht rise on All Bran?  They've just lost my 3000 a week custom.

You spent ThB3000 a week on All Bran?

 

Golly - you really must have been a "regular customer"!

 

[mikebell]

1 minute ago, JAG said:

You spent ThB3000 a week on All Bran?

 

Golly - you really must have been a "regular customer"!

 

I move my bowels regular as clockwork - every morning at 7.15am.  My problem is I don't get up till 8am.

[JAG]

 

"Thailand Denies Baht Manipulation" 

 

Edited October 18, 2017 by JAG

[robblok]

Come on everyone is moaning here how the baht is strong, if Thailand manipulated the baht to get a trading advantage they would have lowered it to sell more. That is what they are talking about and that has certainly not happened. (how i wish and most expats too).

[ExpatOilWorker]

2 hours ago, Ricardo said:

Isn't  "criticism for doing too little to curb gains in the baht"  suggesting that the BoT is & should indeed be manipulating the currency to some extent, and then  "Countries that aim to boost overseas sales normally prefer weak currencies to make their goods cheaper"  suggesting that their efforts aren't very well carried-out, or effective ?

 

The question in my mind is more, why do Thai exporters do so well, despite the relatively-strong Baht ?  Are there perhaps hidden exports, or more demand from tourist-spending, which somehow aren't reflected in official-figures ? 

 

And why does the BoT not reduce domestic interest-rates, to weaken the Baht against the world's main trading-currency, more readily  ...  it's a mystery !  What are their reasons, fear of a domestic credit-crisis, domestic political-considerations or what ?

 

I've watched the strong Baht for over a decade, and wondered what are the factors influencing it, since the late-90s spending-bubble & crash but must confess that I'm still puzzled.

 

The BoT is actually doing an excellent job of being an independent central bank. They have so far resisted pressure from the finance minister to lower interest rate. The BoT's mandate is to manage inflation and create financial stability. A tall order when the political winds have been blowing in all kind of directions the past 10 years.

The strong baht is probably a combination of $4 billion per month inflow from tourist and less imports because of sluggish domestic consumption. The Thai export machine is kind of caught is the crossfire.

[joecoolfrog]

I think that Thailand is innocent of this particular charge. Trump has thrown this accusation around a lot , especially in regard to China , probably just further evidence of his highly refined diplomatic skills !

[joecoolfrog]

13 minutes ago, robblok said:

Come on everyone is moaning here how the baht is strong, if Thailand manipulated the baht to get a trading advantage they would have lowered it to sell more. That is what they are talking about and that has certainly not happened. (how i wish and most expats too).

Yes it seems nonsensical and easily disproven by a few basic charts. 

[Srikcir]

4 hours ago, webfact said:

"I don’t think manipulation is what we have been doing, what we have been practicing,"

Then Prayut won't mind the US "practicing" with removing Thailand from most favored nation status.

[Eric Loh]

12 minutes ago, joecoolfrog said:

I think that Thailand is innocent of this particular charge. Trump has thrown this accusation around a lot , especially in regard to China , probably just further evidence of his highly refined diplomatic skills !

I wouldn't be worry that much. Trump will not be around long. He will either be impeached or the 25th amendment will get him out before his term ends. 

[Berkshire]

22 minutes ago, robblok said:

Come on everyone is moaning here how the baht is strong, if Thailand manipulated the baht to get a trading advantage they would have lowered it to sell more. That is what they are talking about and that has certainly not happened. (how i wish and most expats too).

Exactly.  That thread headline is going to get a bunch of expats' panties in a twist, but it's saying the exact opposite.  True manipulation would be a gain for foreigners in Thailand as the BOT would weaken the baht to help exports.  That's not happening...unless they're already trying to do that and the baht keeps bouncing back.  Speaking of the USD in particular, it just seems that the dollar is weak, not that the THB is strong.  I'll bet if Trump were impeached tomorrow, the USD would skyrocket.  Just wishful thinking on both counts.   

[idman]

Not manipulating the precious Baht????  The Bank of Thailand have been getting away with this B.S. for the past year.  The Baht was nearly at 36 to the U.S. dollar and suddenly it fell like a rock to 33 within less than a year depite all legitimate economic indicators.  When the big shots in the export business complain loudly that this is hurting the Thai economy and nothing is done you know strings are being pulled to protect the very rich in Thailand.  Every week you read about another worrysome economic indicator, bad loans on the increase, houshold debt at record highs,  increased taxes to prop up the government, proposal to increase the VAT, stagnant spending by the average consumer and constant worry by the average Thai about their economic wll being.  Yet the almighty Bank of Thailand ignores all this, they get their minions to issue B.S. reports contradicting anything negative about the economy to save face and try and convince the world that the Baht is strongervthan ever.  A house of cards that will fall and fall hard, not if but only when.

[John Richards]

1 hour ago, mikebell said:

So if imports are cheaper, how can Tesco Lotus justify a 35 baht rise on All Bran?  They've just lost my 3000 a week custom.

I envisage a run on the Tesco share price - in "man abandons global giant in All Bran fit of pique" scoop 

[worgeordie]

2 hours ago, mikebell said:

So if imports are cheaper, how can Tesco Lotus justify a 35 baht rise on All Bran?  They've just lost my 3000 a week custom.

Maybe you should blame Kelloggs,the price of cereal's here are

very expensive,I thought when Kellogg's opened up a manufacturing

plant here prices would fall,local produced against imported,but no

they stayed the same.

regards worgeordie

[JAG]

1 hour ago, John Richards said:

I envisage a run on the Tesco share price - in "man abandons global giant in All Bran fit of pique" scoop 

You would need more than a scoop to clear the fall out from a dietary change (particularly involving All Bran) of this magnitude....

[JAG]

I know very little about money - when I have got it I spend it and when I haven't got it I manage without; but I am sure that I would be right in speculating that the "interests" behind keeping the Baht so strong are unlikely to be those of the vast majority of the Thai people.

[JAG]

1 hour ago, worgeordie said:

Maybe you should blame Kelloggs,the price of cereal's here are

very expensive,I thought when Kellogg's opened up a manufacturing

plant here prices would fall,local produced against imported,but no

they stayed the same.

regards worgeordie

Serial profiteering?

[thedivezone]

2 hours ago, Eric Loh said:

I wouldn't be worry that much. Trump will not be around long. He will either be impeached or the 25th amendment will get him out before his term ends. 

Maybe, just as likely he will stick around for a second term and after that there's another Trump ready to step into his shoes . . . and another.

Better learn to live with it.

[dick dasterdly]

26 minutes ago, JAG said:

I know very little about money - when I have got it I spend it and when I haven't got it I manage without; but I am sure that I would be right in speculating that the "interests" behind keeping the Baht so strong are unlikely to be those of the vast majority of the Thai people.

I too know very little about 'money' and have frequently wondered why the bht is so (comparatively) strong.

 

But the quoted article mentions that Thailand has "near $20 billion bilateral trade surplus, a robust current-account balance and rising foreign-exchange reserves."

 

Assuming this is true (and I've no reason to doubt it), the strength of the bht compared to other currencies makes sense.

[ExpatOilWorker]

1 hour ago, worgeordie said:

Maybe you should blame Kelloggs,the price of cereal's here are

very expensive,I thought when Kellogg's opened up a manufacturing

plant here prices would fall,local produced against imported,but no

they stayed the same.

regards worgeordie

Another reason to sleep in and skip breakfast.

[mfd101]

If the Americans were to produce more of the things that a country like Thailand and its people actually want and can afford, they wouldn't have a large balance of trade deficit (with Thailand or any other country). But they are so blind & ignorant of the world that they think the only reason a country like Thailand could have a large trade surplus with them is because they are 'manipulating' their currency.

 

To take just one obvious example: When was the last time the Americans produced a motor vehicle of any quality (at ANY price)? [I had a ride in an American-manufactured Cadillac in Canada in 2004. It was laughably awful. Nothing to compare with a Mazda or Toyota or Honda. And I don't suppose anything's changed in that regard since.]

 

The Americans' complaints are like a 4-year-old throwing a tantrum because he got caught with his hand in the cooky jar. As has been noted, if the Thais were manipulating their currency to increase their exports, the Baht would be falling, not rising!

 

The fact is that, despite its inefficiencies & widespread corruption, the Thai economy is doing remarkably well - healthy trade balance & healthy current & capital accounts. Anyone expecting the Baht to fall any time soon so that they can improve their expat standard of living is in cloud cuckoo land.

Edited October 18, 2017 by mfd101

[Srikcir]

18 minutes ago, mfd101 said:

its people actually want and can afford ...

... to pay much higher prices ... that's the dilemma for Trump who also promised lower consumer prices.

[Baerboxer]

5 hours ago, robblok said:

Come on everyone is moaning here how the baht is strong, if Thailand manipulated the baht to get a trading advantage they would have lowered it to sell more. That is what they are talking about and that has certainly not happened. (how i wish and most expats too).

 

Not necessarily. The people capable of influencing such manipulations may be wanting to invest overseas - buying companies, property, bonds, stocks and shares etc. Or they may be moving currency off shore and into other currencies so that a strong baht favors them at the moment.

 

Not always as it seems!