Thai central bank chief says not worried about capital outflows

 

FILE PHOTO: Thailand's Central Bank Governor Veerathai Santiprabhob is seen during an interview with Reuters at the Bank of Thailand headquarters in Bangkok, Thailand March 14, 2018. REUTERS/Jorge Silva

 

BANGKOK (Reuters) - Thailand has seen some capital outflows, but that's not a worry yet, thanks to the country's strong external position, the central bank chief said on Thursday.

 

Thailand's low foreign debt, high foreign reserves and a current account surplus are among the buffers, Bank of Thailand Governor Veerathai Santiprabhob told reporters.

 

The central bank recently said economic growth this year could be better than previously projected. In March, it predicted growth of 4.1 percent this year, after 3.9 percent last year, which was the best in five years.

 

-- © Copyright Reuters 2018-5-31

If they loosen a bit on the retirees visa hassles, for those wishing to live full time or half time, much more capital will flow in.

"Thailand has seen some capital outflows"

Does somebody know something ?

regards Worgeordie

13 hours ago, worgeordie said:

"Thailand has seen some capital outflows"

Does somebody know something ?

regards Worgeordie

Last month they stated there was no currency manipulation partly due to capital inflows.

 

So that just switched to net outflows or they are selling porkies?

Is there a offshore generals trust to explain the capitol outflowing?   

i think investors are gradually leaving the s.e.asian market as the western economies start to strengthen.my thoughts only no coressponence shall be entered into

When a banker says "Don't worry"....     worry!

Trust me !

5 hours ago, heybuz said:

i think investors are gradually leaving the s.e.asian market as the western economies start to strengthen.my thoughts only no coressponence shall be entered into

On one side is Asian growth. This is the positive. On the other side is Asian debt a lot of which is designated in USD. If the dollar rises and dollar interest rates increase then pressure on the Asian side. Which way this will tip is still uncertain. However, markets consider that Asian economies generally better prepared than before. Still, some creaks showing as per Thailand CB chief making a statement.

 

23 minutes ago, SheungWan said:

On one side is Asian growth. This is the positive. On the other side is Asian debt a lot of which is designated in USD. If the dollar rises and dollar interest rates increase then pressure on the Asian side. Which way this will tip is still uncertain. However, markets consider that Asian economies generally better prepared than before. Still, some creaks showing as per Thailand CB chief making a statement.

As I recall less than 3% of Thai external debt is denominated in USD, see 3.0 in link below:

 

.http://www.pdmo.go.th/en/popup_money_data.php?m=money&ts2_id=1

 

I also believe that the vast majority of the outflows was from SET funds, the SET having fallen for about one week. EDIT TO ADD: another newsp[aper that cannot be named reported that In the past week, foreign investors sold 18.6 billion baht net of Thai bonds and 8.5 billion baht net of Thai shares.

Edited June 1, 20188 yr by simoh1490

7 hours ago, Bob12345 said:

Last month they stated there was no currency manipulation partly due to capital inflows.

 

So that just switched to net outflows or they are selling porkies?

Currency manipulation and capital inflows don't make sense when put together in a statement, the one is highly unlikely to account for the other or be a part of the reason for it since capital inflows by definition must be in a currency other than THB.

21 hours ago, snoop1130 said:

Thailand has seen some capital outflows, but that's not a worry yet, thanks to the country's strong external position

However in March 2018,

"Thailand’s problem now is capital inflows, not capital outflows" - Bank of Thailand Senior Director Don Nakornthab https://www.bloomberg.com/news/articles/2018-03-07/capital-outflows-don-t-scare-thailand-as-it-wrestles-with-baht  

 

 

 

 

 

5 minutes ago, Srikcir said:

However in March 2018,

"Thailand’s problem now is capital inflows, not capital outflows" - Bank of Thailand Senior Director Don Nakornthab https://www.bloomberg.com/news/articles/2018-03-07/capital-outflows-don-t-scare-thailand-as-it-wrestles-with-baht  

 

 

 

 

 

They are the same beast really, capital inflows are low because bond yields in the West are now higher and the stock markets more likely to give positive returns, over and above the SET - we're seeing capital outflows for similar reasons except Trump's trade war is likely to be another factor which aggravates since Thailand is an export-led economy.

 

I came across another article recently which talked about BOT weakening currency controls in order to weaken THB, the problem is that despite being able to, Thai exporters chose not to invest overseas and prefer the Thai economy, a factor which negates BOT's loosening strategy.

Edited June 1, 20188 yr by simoh1490

1 hour ago, simoh1490 said:

Currency manipulation and capital inflows don't make sense when put together in a statement, the one is highly unlikely to account for the other or be a part of the reason for it since capital inflows by definition must be in a currency other than THB.

The line was that the baht was so strong due to capital inflows.

Capital inflows means more demand for the baht, hence the strong baht (as the capital will be invested here, and only baht is accepted within Thailand).

This as evidence that the strong baht was not due to currency manipulation.

4 minutes ago, Bob12345 said:

The line was that the baht was so strong due to capital inflows.

Capital inflows means more demand for the baht, hence the strong baht (as the capital will be invested here, and only baht is accepted within Thailand).

This as evidence that the strong baht was not due to currency manipulation.

Yes indeed, we can agree on all of that. And now that you've written what you have your previous post makes better sence.