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

[Jonmarleesco]

7 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.

'I've watched the strong Baht for over a decade, and wondered what are the factors influencing it ...'

 

As have I, and I'm damned sure there has been ongoing manipulation, in favour of strengthening the Baht rather than weakening it. A weak currency helps exports but impacts imports. It also has a detrimental effect on foreign-currency-denominated loans.

[Berkshire]

8 hours ago, idman said:

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.

Another guy that just doesn't get it.  "Protect the very rich"...?  What in freaks name are you talking about?  If 70% of the Thai economy is tied to exports, it stands to reason that quite a few of these rich Thais would be involved in this sector and would prefer a weaker baht.  So if there were corruption to that extent, the powers that be would be manipulating the baht to make it weaker.  But the opposite is happening.  I'm sorry that your measly pension is taking a hit, but blame it on your home country currency.   

[wakeupplease]

How a country with so much in your face corruption can make its claim to be a safe bet I will never know, it must built on BullSh>> and lies of the monster TAT proportions, just need to get the tourist cash seems to be the answer.

 

I Hope Trump does have an idea and does something about it

[wakeupplease]

Second thoughts

Why deny anything if you have not been named as a scammer before a report come s out

 

That means you know what you have been doing so try to soften the impact.

[JGV]

Just take a look at the bank accounts of senior govt officials and i am sure they will have bought up a lot of cheap pounds and dollars in anticipation of a large profit when exchanged later

[Ricardo]

10 hours ago, JGV said:

Just take a look at the bank accounts of senior govt officials and i am sure they will have bought up a lot of cheap pounds and dollars in anticipation of a large profit when exchanged later

 

I share your cynicism, but one thing which led to the 1997-crisis was surely that the BoT-reserves were all spent, trying to maintain an artificially-strong Baht, whereas currently reserves are high & stable/growing ?

 

The BoT appears to have learned a lesson from that experience.

 

Advance-knowledge of the coming crisis undoubtedly enabled many of those in-the-know to double the Thai-value of their assets last time round. But is that true now, or is it just that many influential Thais like to keep substantial assets offshore, these days ?

Edited October 19, 2017 by Ricardo

[Srikcir]

On 10/18/2017 at 5:50 AM, webfact said:

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

But it does have a positive effect:

• lower inflation
• lower costs for some exporters, ie., petroleum products
• foreign acquisition opportunities
• lower government funding costs
• wealthy get more wealth, ie., vis a vis stock market

https://www.dailyfx.com/forex/fundamental/article/guest_commentary/2012/12/19/Guest_Commentary_5_Advantages_of_a_Strong_Currency.html

 

[Watchful]

19 hours ago, mfd101 said:

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.

 

Mfd, you are looking at trade imbalances and assuming they are the result of ONLY currency valuations. Not so!  This is a multi-dimensional problem.

 

For example what are Thailand's border "adjustment" taxes on bourbon, Kentucky whiskey, cigarettes, California wine etc.??

 

These taxes also can play a huge role in trade balances. Thailand's exports come into the US duty free with no border adjustment taxes. Trump is correct to say this situation needs to be looked at.

 

I believe in reciprocity!  That is, if you hit our products with 20% to 40% taxes, so shall yours be hit at our borders.

 

Earlier I mentioned multi-dimensional and even taxes are only a single component. Countries can also introduce barriers to foreign imports via legislation around supposedly safety, environmental, etc.  That is, only "junk" made here can pass these tests. Chinese are notorious for "gaming" the system, especially when the local "junk" is made at government owned/runned factories. 

 

 

[mfd101]

35 minutes ago, Watchful said:

Mfd, you are looking at trade imbalances and assuming they are the result of ONLY currency valuations. Not so!  This is a multi-dimensional problem.

 

For example what are Thailand's border "adjustment" taxes on bourbon, Kentucky whiskey, cigarettes, California wine etc.??

 

These taxes also can play a huge role in trade balances. Thailand's exports come into the US duty free with no border adjustment taxes. Trump is correct to say this situation needs to be looked at.

 

I believe in reciprocity!  That is, if you hit our products with 20% to 40% taxes, so shall yours be hit at our borders.

 

Earlier I mentioned multi-dimensional and even taxes are only a single component. Countries can also introduce barriers to foreign imports via legislation around supposedly safety, environmental, etc.  That is, only "junk" made here can pass these tests. Chinese are notorious for "gaming" the system, especially when the local "junk" is made at government owned/runned factories. 

 

 

Yes, I agree with all of that. Fair points well made.

[MaeJoMTB]

The western governments currently seem to think weak currency is good.

When I was growing up, Britain most certainly though weak currency was bad.

 

Assuming Thailand thinks the same as the west ......... not a good idea.

Most Thais put pride before profit.

Edited October 22, 2017 by MaeJoMTB