BOT boss warns of possible stormy seas ahead

[webfact]

BOT boss warns of possible stormy seas ahead

By The Nation

 

Bank of Thailand governor Veerathai Santiprabhob has warned there is a risk of bigger market corrections ahead, saying global rate hikes could adversely affect Thai firms.

 

He was speaking on Thursday at a seminar hosted by S&P Global Ratings and TRIS Rating Co.

 

Market correction over the past month indicates investors are more worried about the risk of faster interest-rate hikes and rising inflation than previously thought, Veerathai said.

 

There is a risk of greater market correction ahead, possibly arising from a mismatch of market expectations and complexity in the way economic factors interact, he warned, citing a recent sharp fall in global stocks.

 

The US Federal Reserve might raise its policy rates faster, which would lead to higher interest rates globally. Firms could become overly dependent on foreign borrowing, Veerathai said.

 

Thailand, however, doesn’t need to mimic US rate hikes, he said, because of its ample liquidity owing to a large current-account surplus, which last year represented 10.8 per cent of GDP.

 

Source: http://www.nationmultimedia.com/detail/breakingnews/30339444

 

-- © Copyright The Nation 2018-02-22

[RichardColeman]

1 hour ago, webfact said:

Bank of Thailand governor Veerathai Santiprabhob has warned there is a risk of bigger market corrections ahead, saying global rate hikes could adversely affect Thai firms.

Should be more worried about the impending explosion of unpaid loans to all of my neighbours with pick-ups, motorbikes, best phones, playstations and their mountain of take out refuse !

[toybits]

It's okey! Don't worry. Financial Reserves are healthy. Never mind the spending on those hardware from China....

[scorecard]

So what does all this mean in terms of the near term / longer-term exchange rate - Baht to US$?

[CGW]

So, the Thai baht will once again for no fathomable reason strengthen yet again?

[Cadbury]

3 hours ago, webfact said:

BOT boss warns of possible stormy seas ahead

Bank of Thailand Governor Veerathai Santiprabhob is walking a fine line here with his predictions of "stormy seas ahead". This could almost be likened to the  astrologer who was "ordered" to stop predicting government gloom. 

But Governor Veerathai slips the noose nicely by painting a glowing picture of Thailand's ample liquidity owing to a large current-account surplus. Phew!....that was close.

 

Edited February 22, 2018 by Cadbury

[NCC1701A]

it always seems many comments here on TV are negative about Thailand's economy. 

 

Things are booming here in Hua Hin and most places I go in Thailand there are huge construction projects, people shopping in giant malls, markets are packed, eating dinner out every night. New cars everywhere. on and on.

 

 

 

[saakura]

8 minutes ago, NCC1701A said:

it always seems many comments here on TV are negative about Thailand's economy. 

 

Things are booming here in Hua Hin and most places I go in Thailand there are huge construction projects, people shopping in giant malls, markets are packed, eating dinner out every night. New cars everywhere. on and on.

 

 

 

Most of those posters are jealous and bitter about Thailand's rapid development and the consequent reduction in their own spending power and stature. They would rather wish there was another financial crisis here and the Baht devalues like in 1997. We (me included) could all fantasize about it, but not going to happen anyytime soon.

[Chris Lawrence]

10 minutes ago, NCC1701A said:

it always seems many comments here on TV are negative about Thailand's economy. 

 

Things are booming here in Hua Hin and most places I go in Thailand there are huge construction projects, people shopping in giant malls, markets are packed, eating dinner out every night. New cars everywhere. on and on.

 

 

 

Same with a lot of countries at the moment.

 

The storm has already begun in the stock market, but that is old news. 

 

The wait and see is if Thailand will get hit hard; they have a lot of irons in the fire with proposed development projects. The added costs will be the rise of interest rates.

 

Hope you new car is paid for NCC, and running on little debt with retirement funds secured.

[BigBadGeordie]

11 hours ago, webfact said:

Thailand, however, doesn’t need to mimic US rate hikes, he said, because of its ample liquidity owing to a large current-account surplus, which last year represented 10.8 per cent of GDP.

Polytetrafluoroethylene.

 

 

[janclaes47]

5 hours ago, NCC1701A said:

it always seems many comments here on TV are negative about Thailand's economy. 

 

Things are booming here in Hua Hin and most places I go in Thailand there are huge construction projects, people shopping in giant malls, markets are packed, eating dinner out every night. New cars everywhere. on and on.

 

 

 

 

I also see lots and lots of construction projects, mainly rows of shophouses and moobaans, going on for the past 3 - 4 years.

 

But I also notice that 3-4 years after those projects are completed they are still 90% unoccupied.

 

See a lot of people in shopping malls eating, but see plenty high end stores that don't see 5 customers a day.

 

I have in mind shops like Chic republic in Pattaya, and then there was that other store opposite Thai Watsadu that has since closed already.

 

But also Thai watsadu or the new baan and beyond have many more employees than customers at any time given time.

 

Walk into Boonthavorn or the new home pro on sukhumvit at any time of the day, and if you can catch 15 customers inside I buy you lunch.

 

Between Nonprue and Pattaya Nua along highway 7, which I estimate is about 7-8 km, they have built large villa complexes and other luxury housing ove the full distance and they are all empty for years already.

 

Some of the projects still have the scaffolding installed, and are overgrown by creepers.

 

Near the junction highway 36 and 331 they have been building Ampio, a huge project of Toscana style houses, for the past 6 years and not a single house has been occupied since.

 

Within a radius of about 15 km of where I live I can take you to more than 2000 empty new buildings that were finished more than 3 years ago.

 

I talk with Thai people running construction related companies that were doing well for many years in the Pattaya area, and they tell me business is very bad, and that their friends who run hotels and other businesses are telling them the same.

 

They all blame some self appointed bunch for the current situation.

 

Thailand lives on borrowed time, or should I say borrowed money, because you will notice that those people you see in the restaurants mostly pay with plastic money.

 

If we should take the cars that are bought on finance off the road, it would look like traffic free days are on again.

 

Car loans are still easily obtained, but mortgages are a completely different story.

 

I had a dentist working at Bangkok Pattaya hospital wanting to buy my house, but however bangkok bank valued my house 3 years ago at around the amount she needed to borrow, she could not find  bank interested .

 

 

 

 

[simoh1490]

9 hours ago, scorecard said:

So what does all this mean in terms of the near term / longer-term exchange rate - Baht to US$?

BOT is suggesting the USD will increase interest rates which will cause equities to fall and USD to strengthen, currency up, equities down - if that were to happen USD would strengthen and the exchange rate would improve for expats. BUT, the US deficit is huge and a strong dollar hurts exports so don't hold your breath. And whilst the Thai economy is far smaller than the US it is structurally in far better shape, the US economy with its debt overload is, exaggerated,  like an oil tanker at sea that requires three days notice to change direction! Bottom line - something really wonderful has to happen to the US dent and its economy and/or something really bad has to happen to Thailands exports and tourist industry before THB weakens against the majors, a nuclear war or a new US president might do the trick!

[janclaes47]

4 minutes ago, simoh1490 said:

something really bad has to happen to Thailands exports and tourist industry before THB weakens against the majors, a nuclear war or a new US president might do the trick!

 

I guess Thailand publishing real figures would also do the trick.

 

There are recently a few articles from renowned financial publications starting to doubt the figures this government releases.

 

Other posters have posted links to the articles in the past few days.

[simoh1490]

2 hours ago, janclaes47 said:

 

I guess Thailand publishing real figures would also do the trick.

 

There are recently a few articles from renowned financial publications starting to doubt the figures this government releases.

 

Other posters have posted links to the articles in the past few days.

I've been hearing such stories for the past ten years yet the Thai economy and the Baht has gone from strength to strength during that time, those stories are usually conspiracy theories put out by penniless whingers who hope the exchange rate will fall overnight or renowned financial publications having a slow news day!

 

If the number were suspicious the IMF would have commented, they haven't; the World Bank would have said something also, they haven't; Wall Street/markets would have shorted Thai stock, they haven't; an offshore exchange rate would have emerged, it hasn't; the rating agencies would have downgraded Thailand's credit rating, they haven't; the foreign currency reserves would have been plundered by now, they haven't! It looks like you may have to redefine your idea of, "real figures", but go ahead and link to some of those articles you mention anyway, humour is always good, first thing in the morning!

 

EDIT TO ADD: Here's a page of Thailand economic news reports https://tradingeconomics.com/thailand/news

Edited February 22, 2018 by simoh1490

[Happyman58]

13 hours ago, NCC1701A said:

it always seems many comments here on TV are negative about Thailand's economy. 

 

Things are booming here in Hua Hin and most places I go in Thailand there are huge construction projects, people shopping in giant malls, markets are packed, eating dinner out every night. New cars everywhere. on and on.

 

 

 

That what i like about you NCC1701A You are such an optimist 

[simoh1490]

7 hours ago, janclaes47 said:

 

I also see lots and lots of construction projects, mainly rows of shophouses and moobaans, going on for the past 3 - 4 years.

 

But I also notice that 3-4 years after those projects are completed they are still 90% unoccupied.

 

See a lot of people in shopping malls eating, but see plenty high end stores that don't see 5 customers a day.

 

I have in mind shops like Chic republic in Pattaya, and then there was that other store opposite Thai Watsadu that has since closed already.

 

But also Thai watsadu or the new baan and beyond have many more employees than customers at any time given time.

 

Walk into Boonthavorn or the new home pro on sukhumvit at any time of the day, and if you can catch 15 customers inside I buy you lunch.

 

Between Nonprue and Pattaya Nua along highway 7, which I estimate is about 7-8 km, they have built large villa complexes and other luxury housing ove the full distance and they are all empty for years already.

 

Some of the projects still have the scaffolding installed, and are overgrown by creepers.

 

Near the junction highway 36 and 331 they have been building Ampio, a huge project of Toscana style houses, for the past 6 years and not a single house has been occupied since.

 

Within a radius of about 15 km of where I live I can take you to more than 2000 empty new buildings that were finished more than 3 years ago.

 

I talk with Thai people running construction related companies that were doing well for many years in the Pattaya area, and they tell me business is very bad, and that their friends who run hotels and other businesses are telling them the same.

 

They all blame some self appointed bunch for the current situation.

 

Thailand lives on borrowed time, or should I say borrowed money, because you will notice that those people you see in the restaurants mostly pay with plastic money.

 

If we should take the cars that are bought on finance off the road, it would look like traffic free days are on again.

 

Car loans are still easily obtained, but mortgages are a completely different story.

 

I had a dentist working at Bangkok Pattaya hospital wanting to buy my house, but however bangkok bank valued my house 3 years ago at around the amount she needed to borrow, she could not find  bank interested .

 

 

 

 

In Chiang Mai I see many of the same things you see. People have long been constructing rows of shop houses that don't sell, anyone who has land near a main road thinks it's a money maker and indeed sometimes it can be. My SiL and her husband own land near a main road and they were approached by a Bangkok investor to joint venture in the build of a small row of shophouses and it worked out well, lots don't. The investor was just an everyday Bangkok guy looking for an investment project, not seriously wealthy by any means, much more of a speculator.

 

New housing estates: I'm guessing, off the top of my head, maybe one in twenty is a failure around here, just based on what I've seen, the vast majority are doing well.

 

Shopping centres/malls: the country as a whole went through a period where loads were built, far too many in fact. CM has seen three new major malls built in the past few years as well as a bunch of lesser shopping centres, none of them is ever crowded and it's always been that way, sometimes some of them are almost deserted yet they still continue to exist. From a consumer perspective that's a pleasant shopping experience, long may it continue.

 

 

.

[NCC1701A]

many comments here on TV are from a somewhat arrogant western perspective with western bias.

 

meaning when USA/EU/UK economies finally have a major correction Thailand will also follow suit. I just don't think that is going to be the case to the degree TV people think.

 

For personal reasons I hope the BOT is broke and the baht corrects but I am not holding my breath. 

 

Edited February 23, 2018 by NCC1701A

[simoh1490]

1 minute ago, NCC1701A said:

many comments here on TV are from a western perspective with western bias.

 

meaning when USA/EU/UK economies finally have a major correction Thailand will also follow suit. I just don't think that is going to be the case to the degree TV people think.

 

For personal reasons I hope the BOT is broke and the baht corrects but I am not holding my breath. 

 

On that point, western and Far Eastern markets corrected by 10% or more this month, the Thai SET fell by 2.4%.

https://www.investing.com/indices/major-indices

[Happyman58]

Of coarse i do mate need to get out more just as u need to open your eyes at the shops down  infrastruture falling down  hospitals struggling   Roads falling apart  Then again some gullible people like you are easy lead  In the union movement we call them the true believers Hey true believer welcome to the real world

[metisdead]

An inflammatory baiting post has been removed as well as the inflammatory replies. 

[Skeptic7]

On 2/22/2018 at 7:00 AM, saakura said:

Most of those posters are jealous and bitter about Thailand's rapid development and the consequent reduction in their own spending power and stature. They would rather wish there was another financial crisis here and the Baht devalues like in 1997. We (me included) could all fantasize about it, but not going to happen anyytime soon.

HEY...Get outta my head! 555  

Been waiting for that bit of history to repeat itself for a LONG while now, but sadly...seems you are correct. 

[Chris Lawrence]

14 hours ago, NCC1701A said:

many comments here on TV are from a somewhat arrogant western perspective with western bias.

 

meaning when USA/EU/UK economies finally have a major correction Thailand will also follow suit. I just don't think that is going to be the case to the degree TV people think.

 

For personal reasons I hope the BOT is broke and the baht corrects but I am not holding my breath. 

 

https://au.news.yahoo.com/world/a/39300657/kylie-jenner-tweets-snapchat-share-price-nosedives/

 

Jenner wrote $2.17 billion by posting a tweet. Go Figure.

 

So who controls the markets.

 

The Thai market may be controlled by the rich and famous, but a misplaced comment can cause havoc. That's not a western perspective, it happens all over the world.

[Henrik Andersen]

On 2/22/2018 at 6:47 PM, NCC1701A said:

it always seems many comments here on TV are negative about Thailand's economy. 

 

Things are booming here in Hua Hin and most places I go in Thailand there are huge construction projects, people shopping in giant malls, markets are packed, eating dinner out every night. New cars everywhere. on and on.

 

 

 

Sorry Thai people live on borrow money and soon they have to pay back 

Thailand is on the limit just wait and see it going to happen again as in 1997

[simoh1490]

1 hour ago, Henrik Andersen said:

Sorry Thai people live on borrow money and soon they have to pay back 

Thailand is on the limit just wait and see it going to happen again as in 1997

There's no relationship between the economics of 1997 and today, none whatsoever.

[Henrik Andersen]

11 hours ago, simoh1490 said:

There's no relationship between the economics of 1997 and today, none whatsoever.

Ofcores there are similarities to 1997

But you have your opinion I have my opinion thank you 

[Eric Loh]

13 minutes ago, Henrik Andersen said:

Ofcores there are similarities to 1997

But you have your opinion I have my opinion thank you 

Probably the similarity is an over built of real estate and the dissimilarity is that Thailand now has a huge foreign reserve war chest. 

[simoh1490]

On 24/02/2018 at 1:35 PM, Henrik Andersen said:

Ofcores there are similarities to 1997

But you have your opinion I have my opinion thank you 

The crash of 1997 was the result of Thai companies borrowing offshore in USD, when the peg was released out of necessity THB went from 25 to over 45 - BOT couldn't help because all the foreign currency reserves had been invested in long-dated instruments hence THB was allowed to float. Consumer debt was not a factor at all in 1997, it was solely commercial loans.

 

Today, the BOT foreign currency reserves are in excess of USD 210 billion, one of the highest foreign currency reserves in the world. The peg to USD has been removed and now BOT operates a managed currency peg, commercial borrowings are now done onshore rather than offshore and BOT has implemented long-standing currency controls to prevent a reoccurrence of 1997. Exactly how anyone could possibly look at the current economic picture in Thailand and think that it has similarities to 1997 escapes me completely!

Edited February 26, 2018 by simoh1490