Bank Of Thailand May Ease Capital Controls If Baht Steadies

[george]

BoT may ease capital controls if baht steadies

BANGKOK: -- The Bank of Thailand said Wednesday that it may consider relaxing capital control rules if authorities are convinced that the Baht would hold steady against the U.S. dollar.

"We're ready to do anything that will not make the Baht fluctuate so much. We're especially ready to do something for money coming in for real investments and not just for hidden speculation," central bank governor Tarisa Watanagase said.

"The bank does not want to impose this measure for a long time and it is ready to ease the measure if the baht's stability would not be affected," she said.

-- AFP 2007-01-24

[Vespa]

BoT may ease capital controls if baht steadies

BANGKOK: -- The Bank of Thailand said Wednesday that it may consider relaxing capital control rules if authorities are convinced that the Baht would hold steady against the U.S. dollar.

"We're ready to do anything that will not make the Baht fluctuate so much. We're especially ready to do something for money coming in for real investments and not just for hidden speculation," central bank governor Tarisa Watanagase said.

"The bank does not want to impose this measure for a long time and it is ready to ease the measure if the baht's stability would not be affected," she said.

-- AFP 2007-01-24

I wonder if they drink at their board meetings

[midas]

BoT may ease capital controls if baht steadies

BANGKOK: -- The Bank of Thailand said Wednesday that it may consider relaxing capital control rules if authorities are convinced that the Baht would hold steady against the U.S. dollar.

"We're ready to do anything that will not make the Baht fluctuate so much. We're especially ready to do something for money coming in for real investments and not just for hidden speculation," central bank governor Tarisa Watanagase said.

"The bank does not want to impose this measure for a long time and it is ready to ease the measure if the baht's stability would not be affected," she said.

-- AFP 2007-01-24

I wonder if they drink at their board meetings

but we will get back to you if we decide

to reimpose them or may be even something different next time!!

[cclub75]

... And another Z-turn from our beloved Miss "doctor" Tarisa : 2 other "exemptions" !

The Bank of Thailand (BOT) confirmed that by early next week, it would revoke the 30-per-cent withholding requirement for foreign borrowing for direct investment of companies in Thailand.

You know what ? I start to think that one day she will say : "we keep the 30 % withholding requirement, however... all the transactions are exempted".

She will drain the cup to the dregs...

http://www.nationmultimedia.com/2007/01/24...es_30024981.php

Edited January 24, 2007 by cclub75

[Steely Dan]

... And another Z-turn from our beloved Miss "doctor" Tarisa : 2 other "exemptions" !

The Bank of Thailand (BOT) confirmed that by early next week, it would revoke the 30-per-cent withholding requirement for foreign borrowing for direct investment of companies in Thailand.

You know what ? I start to think that one day she will say : "we keep the 30 % withholding requirement, however... all the transactions are exempted".

She will drain the cup to the dregs...

http://www.nationmultimedia.com/2007/01/24...es_30024981.php

I guess financial speculators are amusing themselves by trading the flow of consciousness decrees from the BOT, the Baht is 3% up against sterling today

[pumpuiman]

Baht is 34.03 to the dollar mid market right now.

Last panic was at 35.

BOT....what next?

This should be interesting.

[Gaudente]

BOT....what next?

They could just start by sending a fax to Bangkok Bank Pattaya Second Road branch instructing them to ALLOW ME to use my THB account to purchase 19,900 U.S.$ and swift them to Singapore....

[Martin]

Contrary to all the views expressed above, I see no reason not to believe that the BoT are behaving very wisely.

These words " money coming in for real investments and not just for hidden speculation" show they are aware of the big danger of the baht being sloshed right overboard in the huge waves of volatility that can be expected as huge funds look to get out of the US$.

A government of the 'old and wrinkly' generation can be expected to have a different view from the ones that have followed it.

Personally, I am very wary of my children's generation and my grandchildren's generation not doing right by the prospects for my greatgrandchildren.

Born in 1935, I saw the effects that the mid-twenties exuberance and the 1929 crash had had, because (though we were middle-class) my parents made sure that we were exposed to what it was like in the areas of town where the people who had lost their livelihoods lived.

There have, in 2006, been such parallels with the period just before the 1929 crash that I am glad to see the BoT uncouple the baht from the financial sloshings by putting that 30% withhold in the way of baht speculation, whilst welcoming long-term real investment (if anybody can find any attractive openings for it).

[Mid]

[britmaveric]

If they don't drink, I'm sure they drink now at their meetings.

[solo siam]

Real Estate?

[Martin]

With the US dollar turning bottom up, saying "if baht steadies" is the equivalent of saying "if pigs fly".

Nowadays, there is no way that currencies can move in a smooth and orderly manner in parallel with the fundamentals of their national economies.

We are going to see a lot of volatility.

And I expect that we will see a lot of animosities being expressed.

Wax effigies of neocons may sell well.

[ColPyat]

These words " money coming in for real investments and not just for hidden speculation" show they are aware of the big danger of the baht being sloshed right overboard in the huge waves of volatility that can be expected as huge funds look to get out of the US$.

And doing it in a way that frightened off especially long term investment so that many investors now move to other countries, and therefore having created a climate of fear under investors.

It is dubious enough that a military junta grudgingly accepted by the rest of the world passes all sorts of laws via their mostly with cronies staffed parliament, but doing those changes overnight without any warning, just to reverse some of it the next day does not exactly create confidence under investors.

If you care to read the thread about Surayud's speach to the Joint Foreign Chambers of Commerce, you can read that the foreign business community is not exactly enthusiastic about the economic policies of this government.

You may cite the example of Malaysia rejecting the IMF package, and introducing legislations that made it difficult for short term investors, that was also initially warned about by the rest of the world. That though was a different situation. It was after deliberate consideration, not by a government that only recently came to power by a military coup. And, what many people initially disregarded - up to the financial crises Malaysia's economic policy was generally sound with a few exceptions, NPL situation was according to the international standard.

And, Malaysias changes came with special attractions for long term investors that Thailand has so far completely failed to introduce, and will not so, because of mistaken nationalism.

Like it or not, but Thailand is now in stiff competition with countries such as Vietnam and India (where foreigners can own their businesses) in the global market for foreign investment, and any insecurity created under investors will have devastating effects in the future.

Long term investors want stability, long term stability, and not sudden shifts of policy, laws that get introduced over night before they have underwent any normal procedure of parliamentary enquiry, and an national economic policy that does not even fulfill what a theory is defined by, that though cannot be openly criticised, and moves to increased nationalistic enspired protectionism.

Some of the changes might have been inspired by the right intentions, but the way they were handled, the Thai government has definately shot its own foot.

I know that you have a rather gloomy vision of the immediate future, your ideas about the end of the industrial age, that inspires your views. But, your mistake is that you believe that Thailand can be rather autark if it keeps a simple sufficiency lifestyle, but you ignore that even if your predictions come true, Thailand is maybe the least prepared country for such an event because the discrepancy of what is propagated and the reality on the ground - which are tremendous land rights problems and social problems that do not get adressed by this government at all, other than by semi religious arguments that are not accepted by the sectors of society in desperate need of sound policies and necessary long overdue reforms, and looked at with increasing bewilderment by foreign investors and many Thai academics as well.

Facts are not the intentions of the government expressed in their speaches.

Maybe, instead of showing their incompetence by holding speaches that even a blind man can that have nothing to do with realities, introducing over night laws only to reverse them the next day partially, the government should start adressing the by the business community not so unknown problems in their society, and set the stage that the next elected government can actually start solving them.

That would create confidence under foreign investors, and also under their own population.

Right now we have neither.

[Jai Dee]

BoT to exempt offshore loans from controls Feb 1

Companies borrowing from offshore markets will have some relief from capital controls, effective February 1 if they immediately hedge the proceeds via foreign exchange swaps, the Bank of Thailand said Friday.

The central bank imposed a one-year, 30% withholding requirement on many types of capital inflows in mid-December in order to relieve speculative pressure that had driven the baht to a nine-year high.

Source: The Nation - 26 January 2007

For more details, see this thread.

[thedude]

These words " money coming in for real investments and not just for hidden speculation" show they are aware of the big danger of the baht being sloshed right overboard in the huge waves of volatility that can be expected as huge funds look to get out of the US$.

And doing it in a way that frightened off especially long term investment so that many investors now move to other countries, and therefore having created a climate of fear under investors.

It is dubious enough that a military junta grudgingly accepted by the rest of the world passes all sorts of laws via their mostly with cronies staffed parliament, but doing those changes overnight without any warning, just to reverse some of it the next day does not exactly create confidence under investors.

If you care to read the thread about Surayud's speach to the Joint Foreign Chambers of Commerce, you can read that the foreign business community is not exactly enthusiastic about the economic policies of this government.

You may cite the example of Malaysia rejecting the IMF package, and introducing legislations that made it difficult for short term investors, that was also initially warned about by the rest of the world. That though was a different situation. It was after deliberate consideration, not by a government that only recently came to power by a military coup. And, what many people initially disregarded - up to the financial crises Malaysia's economic policy was generally sound with a few exceptions, NPL situation was according to the international standard.

And, Malaysias changes came with special attractions for long term investors that Thailand has so far completely failed to introduce, and will not so, because of mistaken nationalism.

Like it or not, but Thailand is now in stiff competition with countries such as Vietnam and India (where foreigners can own their businesses) in the global market for foreign investment, and any insecurity created under investors will have devastating effects in the future.

Long term investors want stability, long term stability, and not sudden shifts of policy, laws that get introduced over night before they have underwent any normal procedure of parliamentary enquiry, and an national economic policy that does not even fulfill what a theory is defined by, that though cannot be openly criticised, and moves to increased nationalistic enspired protectionism.

Some of the changes might have been inspired by the right intentions, but the way they were handled, the Thai government has definately shot its own foot.

I know that you have a rather gloomy vision of the immediate future, your ideas about the end of the industrial age, that inspires your views. But, your mistake is that you believe that Thailand can be rather autark if it keeps a simple sufficiency lifestyle, but you ignore that even if your predictions come true, Thailand is maybe the least prepared country for such an event because the discrepancy of what is propagated and the reality on the ground - which are tremendous land rights problems and social problems that do not get adressed by this government at all, other than by semi religious arguments that are not accepted by the sectors of society in desperate need of sound policies and necessary long overdue reforms, and looked at with increasing bewilderment by foreign investors and many Thai academics as well.

Facts are not the intentions of the government expressed in their speaches.

Maybe, instead of showing their incompetence by holding speaches that even a blind man can that have nothing to do with realities, introducing over night laws only to reverse them the next day partially, the government should start adressing the by the business community not so unknown problems in their society, and set the stage that the next elected government can actually start solving them.

That would create confidence under foreign investors, and also under their own population.

Right now we have neither.

hear hear. i'd like to add that if the interim government does nothing more in the next several months apart from carry out the budget, they'd have a major accomplishment in their hands.

in this case, doing nothing is better than doing something, better to let an actual elected government carry out a policy platform than to let a bunch of bureacrats play minister.

[Old Man River]

In this case, doing nothing is better than doing something, better to let an actual elected government carry out a policy platform than to let a bunch of bureacrats play minister.

Yes and no. A big time yes, in my opinion almost across the board, but no as it relates to the BOT. The BOT has a real issue to address now, and finding the solution (whatever that is) needs to be done now. They can't wait 8 months down the road for a civilian government to start to study the issue and institute solutions next year some time.

If the THB strengthens to 30 or more, what would that do to the real estate market (your area of expertise)?. Remember, locals would suffer as it relates to crashing exports and offshore purchasers would be faced with a very expensive THB.

Dude, this is a problem now and has to be addressed now. Too many people are yelling there is a problem, but I don't hear the same people offering solutions.

[LivinLOS]

BoT to exempt offshore loans from controls Feb 1

Companies borrowing from offshore markets will have some relief from capital controls, effective February 1 if they immediately hedge the proceeds via foreign exchange swaps, the Bank of Thailand said Friday.

The central bank imposed a one-year, 30% withholding requirement on many types of capital inflows in mid-December in order to relieve speculative pressure that had driven the baht to a nine-year high.

Source: The Nation - 26 January 2007

For more details, see this thread.

Ohh yes.. The DOH SLAP moment when they realize that Thai firms actually need some of that nasty foreign capital too..

Quick write up another exemption on that will you..