7.49am Bot Intervenes To Rescue The Baht

[topfield]

As the writer anticipated, following similar moves over the last few weeks and days, K.Tarisa intervened the moment the BOT staff opened their doors !

See below high and low in last ten minutes (copied and pasted from forex live website)

36.01 34.93

Evidence of massive BOT intervention

Opinion :Why do they not lower interest rates drastically as K.Sontee Limtongkun suggested. ie to 2%pa. ?

No need then to intervene and just about everyone in the country would benefit (except savers).

This has to be K.Tarisa's next move, as tonight after the BOT closes, the baht will again rise to 34.90.

NB Above writer's own interpretation of events ......nothing confirmed officially yet !

OOPS....sorry in fact .the baht fell 110 satang did not rise 110 satang, the aim being for the baht to fall !

Edited January 19, 2007 by topfield

[JacknDanny]

As the writer anticipated, following similar moves over the last few weeks and days, K.Tarisa intervened the moment the BOT staff opened their doors !

See below high and low in last ten minutes (copied and pasted from forex live website)

36.01 34.93

Evidence of massive BOT intervention

Opinion :Why do they not lower interest rates drastically as K.Sontee Limtongkun suggested. ie to 2%pa. ?

No need then to intervene and just about everyone in the country would benefit (except savers).

This has to be K.Tarisa's next move, as tonight after the BOT closes, the baht will again rise to 34.90.

NB Above writer's own interpretation of events ......nothing confirmed officially yet !

OOPS....sorry in fact .the baht fell 110 satang did not rise 110 satang, the aim being for the baht to fall !

Is it just me ?

With the greatest of respect, you seem to endlessly post scaremongering s#ite on a daily basis.

Yesterday you were telling everybody to BUY baht to save 3%. Yet this morning you are stating BOT have intervened and the baht goes 34.93 to 36.01 in your words "as the writer anticipated"

Well if you anticipated this why advise everyone yesterday to BUY baht.??????

You havent got a clue whether its New York or New Year. Please stop this nonsensical drivel, its really NOT helping anyone

[Lil_Jon]

As the writer anticipated, following similar moves over the last few weeks and days, K.Tarisa intervened the moment the BOT staff opened their doors !

See below high and low in last ten minutes (copied and pasted from forex live website)

36.01 34.93

Evidence of massive BOT intervention

Opinion :Why do they not lower interest rates drastically as K.Sontee Limtongkun suggested. ie to 2%pa. ?

No need then to intervene and just about everyone in the country would benefit (except savers).

This has to be K.Tarisa's next move, as tonight after the BOT closes, the baht will again rise to 34.90.

NB Above writer's own interpretation of events ......nothing confirmed officially yet !

OOPS....sorry in fact .the baht fell 110 satang did not rise 110 satang, the aim being for the baht to fall !

what's up with you and the Exchange Rates , You seem to be obsessed with it

Just a thought ,

[Meerkat]

Opinion :Why do they not lower interest rates drastically as K.Sontee Limtongkun suggested. ie to 2%pa. ?

No need then to intervene and just about everyone in the country would benefit (except savers).

This has to be K.Tarisa's next move, as tonight after the BOT closes, the baht will again rise to 34.90.

The short answer is inflation. Cutting rates to 2% (ie to a negative real rate) to dampen the currency would be like chopping off your dog's legs to stop him running away.

Hmm...considering the BOT's recent record of financial mismanagement, you never know...

[samran]

Opinion :Why do they not lower interest rates drastically as K.Sontee Limtongkun suggested. ie to 2%pa. ?

No need then to intervene and just about everyone in the country would benefit (except savers).

Topfield, a hint mate. If you know nothing about something, refrain from sprouting off, lest you look stupid as you have done here.

Why don't try lower interest rates? Well, to stop inflationary pressures thats why. Interest rate (ie monetary) policy is designed to prevent/control inflation, resulting from over consumption and lack of investment. The purpose isn't to control exchange rates.

If you think that people will 'benefit' from hyper inflation, and the boom and bust cycles that result, you need a new pair of reading glasses mate, cause you've totally ignored the lessons of the past 40 years.

[jumbo2]

Opinion :Why do they not lower interest rates drastically as K.Sontee Limtongkun suggested. ie to 2%pa. ?

No need then to intervene and just about everyone in the country would benefit (except savers).

This has to be K.Tarisa's next move, as tonight after the BOT closes, the baht will again rise to 34.90.

The short answer is inflation. Cutting rates to 2% (ie to a negative real rate) to dampen the currency would be like chopping off your dog's legs to stop him running away.

Hmm...considering the BOT's recent record of financial mismanagement, you never know...

i agree mate..however spot traded as lower as 35-05 today..no intervention but 35-00 is the BOT line in the sand...if it breaks that then there maybe be even more draconian measures bought in.....then all the posts wondering why people watch the FX might sit up and take interest themselves....35-00 is very very important

[andy1308]

http://newsvote.bbc.co.uk/2/shared/fds/hi/...78/intraday.stm

According to that graph the 35.00 rate has already been broken a couple of times this morning. I am certainly no expert on this so will refrain from giving an opinion about what it means.

[sfokevin]

I wish Ms Tarisa would stay at her desk...

[bendix]

awwww, let topfield alone guys.

he is, after all, thaivisa's self-appointed financial guardian, selflessly dedicating his days to monitoring the currency markets for the faintest whisper of a buying opportunity.

[Briggsy]

Wow there's some bizarre fluctuating. 3% change 5 times in the space of 2 hours.

[Briggsy]

Who thinks this is a good environment in which to conduct business?

By intervening in the currency markets is the govt creating the result it wishes to achieve?

Do they know what they're doing?

[JimmyGreaves]

Something odds going on.

Late Last night I saw 71.24 = 1 UK Pound

Now 69.21. 2 baht in 10 hours. That's a big swing!

[Meerkat]

My favourite quote from Khun Tarisa recently was in an article on Bloomberg earlier this week:

"Now investors see more uncertainty, I think we'll see less volatility in the currency.''

Er...um...okay...

http://www.bloomberg.com/apps/news?pid=new...id=aXJE5EgfTlEM

[DFCarlson]

It's an interesting topic, what's the baht going to do? What's the BOT going to do? What's Ms. Tarisa going to do?

But all we can really do is sit back and watch and hope that the baht's meanderings don't affect our lives or our ability to stay in LOS to any significant degree. The baht will go where it will go and we have to go along - and you'd better have already set up a worst case scenario if you have to buy baht with dollars, as I do.

I hope we will see the levels of a year or so ago, at least, but who knows! Would be nice!

[jumbo2]

It's an interesting topic, what's the baht going to do? What's the BOT going to do? What's Ms. Tarisa going to do?

But all we can really do is sit back and watch and hope that the baht's meanderings don't affect our lives or our ability to stay in LOS to any significant degree. The baht will go where it will go and we have to go along - and you'd better have already set up a worst case scenario if you have to buy baht with dollars, as I do.

I hope we will see the levels of a year or so ago, at least, but who knows! Would be nice!

Thats the whole point...it will affect alot of people living,investing etc etc in Thailand as the BOT will try agin to bring in some sort of crazy measures to weaken the baht.After the last attempt Im dreading what sort of plan they might come up..stay long Sterling ..if you are holding dollars then im sorry..Dollar is going to weaken more yet against the major currencies this year the yen being the exception

[PeaceBlondie]

topfield, I thought you knew more about currency exchange than I know. But if you can't keep track of rising rates versus falling rates (in the same post), why not let the folks who understand it better, say it?

Briggsy's hour-by-hour chart of the sterling versus the baht shows several 3% swings. Is that an obvious sign of instability? And isn't fluctuation often caused by uncertainty? Is there anything certain about what Dr. Tarisa and the BOT will do next? Or are those 3% swings indication that her staff are wasting currency reserves trying to keep the number above 35 or 36?

I could still live here at 27 baht per dollar, but I'd surely go on a crash diet.

[DFCarlson]

Briggsy's hour-by-hour chart of the sterling versus the baht shows several 3% swings. Is that an obvious sign of instability? And isn't fluctuation often caused by uncertainty? Is there anything certain about what Dr. Tarisa and the BOT will do next? Or are those 3% swings indication that her staff are wasting currency reserves trying to keep the number above 35 or 36?

I could still live here at 27 baht per dollar, but I'd surely go on a crash diet.

Any astute observer would have to agree that there's instability, but so far Tarisa /BOT have been able to keep the baht per dollar rate between 35 and 36. I think they'll do what they have to do, as long as they are able, to maintain the line in the sand at 35. I don't see any signs that it'll go below 30 but who knows?

Hope for the best and plan for the worst. Personally, if the rate went much below 30 I could still make it here but I would start thinking seriously about bailing out.

[Briggsy]

This is silliness. As they found out in 1997, you can't buck the market.

[mouse]

I remember years back a South Americna nation (Venezuela I think) having the same type of problems and they merely switched their currency to be the U.S. Dollar. What would be the effect if Thailand made such a move, not to mention the savings from printing the ever needed new currency. Is this a viable solution for Thailand? I know it will never happen, but, the quesiton is valid.

[andy1308]

When you have agreements with American companies and deals in US$ (like my company does) then it's not exactly comforting to see such dramatic swings. It makes business planning somewhat tricky to say the least. However, the same kind of percentage swings were happening in the days leading up to Christmas, especially with the British pound versus the Thai baht.

[DFCarlson]

I remember years back a South Americna nation (Venezuela I think) having the same type of problems and they merely switched their currency to be the U.S. Dollar. What would be the effect if Thailand made such a move, not to mention the savings from printing the ever needed new currency. Is this a viable solution for Thailand? I know it will never happen, but, the quesiton is valid.

I'm no expert in currency finance, but wouldn't that be exactly the same as establishing a fixed exchange rate between the baht and the dollar?

If they wanted to go that route I would think that would be simpler.

[sfokevin]

I think you are referring to the concept of "Dollarizing"... This would be an affront to independence of the Thai people... Better to leave it in a shambles...

Edited January 19, 2007 by sfokevin

[Mid]

This is silliness. As they found out in 1997, you can't buck the market.

lot of testing the waters ........................

[JimsKnight]

Who thinks this is a good environment in which to conduct business?

By intervening in the currency markets is the govt creating the result it wishes to achieve?

Do they know what they're doing?

How do we know they are intervening? What does it mean when they 'are' intervening? Are they buying up / selling dollars or just changing the numbers as they feels like it???

Are these currency spikes a game the bored money men like to watch go up and down

OT but my head always gets in a whirlwind when I hear how if 'Governemnt buys up xy amount of dollars with yx amount of baht this will cause the baht to appreciate / depreciate by zz.xx. How the hel_l does it change the rate??? Does having lots less baht around in Thailand (due to buying dollars) cause the baht to be weaker? And lots more baht lying around (due to selling dollars) make the baht stronger. Or is it the other way round? Either way the riddles always cooked my goose when I try to work out which one!

Topfield where are you?

[steveromagnino]

Can we see volumes as well, because otherwise trades without volumes is not a full piccy piccy poo?

AS for dollarising, I do not see why Thailand would want to tie itself now to a country with completely different economic conditions, halfway around the world and going into meltdown at the moment. (not that we might not be going into meltdown, just that our meltdown is different, a Thai meltdown is eastcyde; a USA meltdown is westcyde aiiiiiiiiiiiiiiiiiiiight).

Topfield...

even though others may give you stick, I think you are providing a helpful service. So far I have earned significant profits on the basis of your advice; they others are jealous, but to date I am now probably 1000b ahead in my currency transactions.

I am investing heavily at the moment in the National property truss, and i have found their support to be emminantly reasonable.

[PeaceBlondie]

Normally, currency trades are overwhelmingly executed by speculators who profit on correct guesses as to the fluctuations. I'm told that speculation has little if any relation to fundamentals such as the inherent worth of relative currencies. Is this what's happening, or has the BOT outlawed such speculation? Against whom is the esteemed Doctor Tarisa gambling?

[steveromagnino]

Normally, currency trades are overwhelmingly executed by speculators who profit on correct guesses as to the fluctuations. I'm told that speculation has little if any relation to fundamentals such as the inherent worth of relative currencies. Is this what's happening, or has the BOT outlawed such speculation? Against whom is the esteemed Doctor Tarisa gambling?

at a guess a bunch of hedge funds?

[PeaceBlondie]

Normally, currency trades are overwhelmingly executed by speculators who profit on correct guesses as to the fluctuations. I'm told that speculation has little if any relation to fundamentals such as the inherent worth of relative currencies. Is this what's happening, or has the BOT outlawed such speculation? Against whom is the esteemed Doctor Tarisa gambling?

at a guess a bunch of hedge funds?

Those hedge funds have deep pockets! Isn't this how George Soros beat the Bank of England?

[pumpuiman]

Bangkok bank is trading at the same rate offered three days ago(35.67). I just sent cash over.

No major fluctuations there.

Edited January 19, 2007 by pumpuiman

[Meerkat]

How do we know they are intervening? What does it mean when they 'are' intervening? Are they buying up / selling dollars or just changing the numbers as they feels like it???

Are these currency spikes a game the bored money men like to watch go up and down

OT but my head always gets in a whirlwind when I hear how if 'Governemnt buys up xy amount of dollars with yx amount of baht this will cause the baht to appreciate / depreciate by zz.xx. How the hel_l does it change the rate??? Does having lots less baht around in Thailand (due to buying dollars) cause the baht to be weaker? And lots more baht lying around (due to selling dollars) make the baht stronger. Or is it the other way round? Either way the riddles always cooked my goose when I try to work out which one!

Topfield where are you?

The easiest way to get your head around why currencies move is to think of them simply as any other commodity; if everyone wants to buy houses, then the price will go up. If everyone wants to sell something, then of course the opposite occurs.

The BOT has been intervening via agent banks (rather than directly entering the market) to sell THB in the offshore market in the hope that such sales will push the market down. With all that extra baht sloshing around in the offshore market a corollary is that interbank interest rates get pushed down too. Again, think of it as another commodity; if there are thousands of houses empty, then it's cheap to rent one – if there's tons of baht lying around, it's cheaper to borrow some. This lowering of interest rates in turn makes owning baht less desirable (let's use the house analogy again – if you're getting less rent because there's such a large supply in the rental market, it reduces your desire to buy houses to rent out), and so (in theory) the baht will fall further.

That virtuous circle is what the BOT have been trying to implement. It's not happening though – the market still seems to be putting a higher fundamental value on the baht and that's why you're seeing the graphs with all that volatility.

It's not quite that simple, and I doubt I'd ever get a job as a teacher, but I hope that gives you an idea of how it all works.