Thailand’s Not Worried About Cash Flowing Out of the Country

By Suttinee Yuvejwattana

 

-- Bank of Thailand official Don says outflows may be beneficial

-- Don says politics of trade are most important economic risk

 

Sitting on a hefty cushion of foreign-exchange reserves, Thailand’s central bank is unafraid of capital outflows as it grapples with the challenge of currency appreciation.

 

“Thailand’s problem now is capital inflows, not capital outflows,” Bank of Thailand Senior Director Don Nakornthab said in an interview in Bangkok on Tuesday. Some outflows would relieve upward pressure on the baht, he said.

 

The central bank is counting on its $213 billion reserves to cushion currency volatility. The Southeast Asian nation also boasts of one of the largest current-account surpluses among emerging markets globally. The baht has appreciated more than 11 percent against the dollar in the past year, the second-best performer in a basket of Asian currencies tracked by Bloomberg.

 

Full story: https://www.bloomberg.com/news/articles/2018-03-07/capital-outflows-don-t-scare-thailand-as-it-wrestles-with-baht

 

-- Bloomberg 2018-03-07

Ok, I will tell that to my bank when they reject my request to send back some of my money that I've sent here over the past 10 years..

 

3 hours ago, kotsak said:

Ok, I will tell that to my bank when they reject my request to send back some of my money that I've sent here over the past 10 years..

 

Same for me, but you beat me to that comment. 

35 minutes ago, Get Real said:

Same for me, but you beat me to that comment. 

It depends on the bank. Bangkok Bank allowed me to send 150k back home 6 months ago without any need to prove anything (the account only ever showed money deposited from overseas however)

Get ready for serious cash to start flowing out of the country...

2 hours ago, Get Real said:

Same for me, but you beat me to that comment. 

same for me ''if and when I sell my condo''

40 minutes ago, timendres said:

Get ready for serious cash to start flowing out of the country...

What reason will money start flowing out then ?

Money has been flowing out of the Country now for some time 

 

Thai investors / large business ,s are seeking to place finances abroad into Soccer Clubs in Europe and also to seeking expansion away from Thailand in the form of Infrastructure projects, and many property developments.

 

I guess that the Golden Goose here is now dying

1 hour ago, timendres said:

Get ready for serious cash to start flowing out of the country...

Why would serious cash start flowing out of the country?? If you have any knowledge of the econimic situation, then you would know that the Thai Baht is one of the currencies that have done well against both dollar, euro and nroweigian, danish and swedish krona. 

Why would people move out serious cash, when they have a big chance on loosing value on that?

all countries get concerned about outflows.

but why move it out  now when it is very strong ???

A lot of rhetoric in some posts

1 hour ago, Get Real said:

Why would serious cash start flowing out of the country?? If you have any knowledge of the econimic situation, then you would know that the Thai Baht is one of the currencies that have done well against both dollar, euro and nroweigian, danish and swedish krona. 

Why would people move out serious cash, when they have a big chance on loosing value on that?

Stronger baht means other currencies are "cheaper" right now. I.e. currency speculators, money market funds, and companies with business interests outside of Thailand may see this as an opportunity to get more bang for their Baht.
E.g. one can buy more USD with fewer THB.
Though, I am fairly certain that money market funds' and currency speculators' purchase of foreign currencies wouldn't contribute to an outflow of cash as that money would remain in Thailand but just in a different denomination which makes up part of the BoT's foreign currency reserve.
The main concern would be the long-term expatriation of THB for foreign business ventures with no foreign re-investment in Thailand as long as the THB remains strong. E.g. football clubs as previously noted or property developments etc. 

Edited March 7, 20188 yr by InfinityandBeyond
Amendment

11 minutes ago, InfinityandBeyond said:

Stronger baht means other currencies are "cheaper" right now. I.e. currency speculators, money market funds, and companies with business interests outside of Thailand may see this as an opportunity to get more bang for their Baht.
E.g. one can buy more USD with fewer THB.
Though, I am fairly certain that money market funds' and currency speculators' purchase of foreign currencies wouldn't contribute to an outflow of cash as that money would remain in Thailand but just in a different denomination which makes up part of the BoT's foreign currency reserve.
The main concern would be the long-term expatriation of THB for foreign business ventures with no foreign re-investment in Thailand as long as the THB remains strong. E.g. football clubs as previously noted or property developments etc. 

You are right. There is a but, though. When the baht is still growing against other currencies, nobody with knowledge will spekulate away that opportunity. They will wait until the first days the baht start to fade against other currencies, before they make their move and still get more bang and be right on the trian up.

40 minutes ago, Get Real said:

You are right. There is a but, though. When the baht is still growing against other currencies, nobody with knowledge will spekulate away that opportunity. They will wait until the first days the baht start to fade against other currencies, before they make their move and still get more bang and be right on the trian up.

Yep. Markets are all timing. I believe K. Don was trying to allay public concerns of a few mega-rich moving boatloads of money overseas recently. Perhaps the 99%s saw this as a sign of lack of confidence in the Thai economy/currency stability. I won't dust off my crystal ball and pretend I know where the THB is going in the near-term, but perhaps some are speculating it will lose value. For those who earn/hold THB and have access to foreign markets/currencies let the good times roll and hope it gets stronger. For those on a foreign fixed income (e.g. pension), they are getting less spending power in Thailand based on their home currency for the time being. 

However, markets tend to reverse. If I had zillions of THB I would be buying as much of the cheapest benchmark currencies as I could right now. And then re-patriate when the time/personal circumstances were right. 

Alas, "I'm just a poor boy from a poor family..." - Queen 

Edited March 7, 20188 yr by InfinityandBeyond
Amendent

9 hours ago, alwaysrainsinUK said:

What reason will money start flowing out then ?

That will become obvious in time. But in my experience, whenever an institution comes out and makes a comment like this, you can bank on the opposite happening.