Thai central bank still worried about speculation in baht

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Thai central bank still worried about speculation in baht

 

FILE PHOTO: New baht banknotes featuring Thailand's King Maha Vajiralongkorn are unveiled during a news conference at Bank of Thailand headquarters in Bangkok, Thailand, July 3, 2018. REUTERS/Athit Perawongmetha

 

BANGKOK (Reuters) - Thailand's central bank is still worried about speculation in the baht <THB=TH> and has tools to handle it, a senior official said on Wednesday, as the Thai currency has stayed strong despite recent measures to slow fund inflows from abroad.

 

The central bank, however, will let the baht follow market forces, Don Nakornthab, a senior director of the Bank ofThailand (BOT), told a news briefing.

 

The baht has strengthened about 5.9% against the dollar so far this year, becoming the best performing currency in Asia, driven by capital inflows.

 

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing Jacqueline Wong)

 

 -- © Copyright Reuters 2019-07-31

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[metisdead]

Another related story on CNBC:

 

Thailand’s currency keeps getting stronger and that’s sparking concerns

 

KEY POINTS

• Since the beginning of this year, Thailand’s currency has jumped more than 5% against the dollar. On a year-over-year basis, it has bounded even higher — nearly 8%.
• ”(The) strong currency is worsening the (Thai) economy’s plight by hurting exports further,” Prakash Sakpal, Asia economist at Dutch bank ING, tells CNBC.
• The country’s central bank could give in to pressure and cut rates to curb the rising baht, economists say.

 

 

https://www.cnbc.com/2019/07/31/thai-baht-strength-sparks-concerns-with-thailand-economy-slowing.html

[nkg]

Well, Bank of Thailand .....

 

If you lower interest rates, the Thai baht will be less attractive to currency speculators, who will take their their money elsewhere. The baht will fall 5% or so. Everybody wins.

[RotMahKid]

Till the moment they all want to cash the profit and sell everything.

[hellstens]

Take down the Bath and you maybe will have your turist back, and people can start to live again.

now you destroy for everyone in the tourism industry.

and for us try to live here :(

   

[geoffbezoz]

"Thailand's central bank is still worried about speculation in the baht <THB=TH> and has tools to handle it"

 

So true, so very true, with tools being the operative word especially now that the PM has put  himself in charge of the economy.

[marcusarelus]

16 minutes ago, hellstens said:

Take down the Bath and you maybe will have your turist back, and people can start to live again.

now you destroy for everyone in the tourism industry.

and for us try to live here ????

Do you really think that Thailand can effect UK or USA monetary policy?  From the article above, 

 

"The country’s central bank could give in to pressure and cut rates to curb the rising baht, economists said. Still, they were not optimistic about the effectiveness of such a move.

“The (Bank of Thailand) could consider a rate cut to help reduce the baht’s yield appeal, but it will be no panacea,” DBS analysts said in their note, adding that a cut of 25 basis points would just undo a hike by the central bank last December.

ING’s Sakpal similarly said that any cut would see limited results."

 

The Central bank can't really do anything legal to reduce the value of the baht.  It's not a Thai problem it is a UK problem.  

Edited July 31, 2019 by marcusarelus

[marcusarelus]

17 minutes ago, hellstens said:

Take down the Bath and you maybe will have your turist back, and people can start to live again.

now you destroy for everyone in the tourism industry.

and for us try to live here ????

   

They can't take down the baht.  Ask for something reasonable like don't leave the EU if you want money again.  

[marcusarelus]

1 hour ago, nkg said:

Well, Bank of Thailand .....

 

If you lower interest rates, the Thai baht will be less attractive to currency speculators, who will take their their money elsewhere. The baht will fall 5% or so. Everybody wins.

No one has proposed a method of taking the baht down 5% in relation to the Pound or USD

[BestB]

Bank of Thailand should stop worrying and thinking. With Big P now in charge of economy it will be fixed in no time. 

 

Once riot dispersal vehicles are delivered there will be even less to worry about 

[BestB]

24 minutes ago, hellstens said:

Take down the Bath and you maybe will have your turist back, and people can start to live again.

now you destroy for everyone in the tourism industry.

and for us try to live here ????

   

It is not possible just to take down any currency , it’s called currency manipulation which is a punishable offence.

 

 

[Card]

14 hours ago, nkg said:

Well, Bank of Thailand .....

 

If you lower interest rates, the Thai baht will be less attractive to currency speculators, who will take their their money elsewhere. The baht will fall 5% or so. Everybody wins

........except savers!

[soalbundy]

13 hours ago, hellstens said:

Take down the Bath and you maybe will have your turist back, and people can start to live again.

now you destroy for everyone in the tourism industry.

and for us try to live here ????

   

Rather a simplistic view, the government is also concerned about private household debt, lowering rates wouldn't do much to curb the Baht but would increase household debt even more.

[MartinKal]

13 hours ago, hellstens said:

Take down the Bath and you maybe will have your turist back, and people can start to live again.

now you destroy for everyone in the tourism industry.

and for us try to live here ????

   

The responsibility of the central bank is economic : to ensure a stable currency. It fundamentally follows market forces, the thought is not a fully pegged currency. The central bank is not a tool to manipulate the value of the currency for speculative or political reasons. If it were, why would all these analysts working in the private sector write up all these reports for newspapers and as guidance for government and their clients at retail banks?

Edited August 1, 2019 by MartinKal

[Guest]

30 minutes ago, soalbundy said:

Rather a simplistic view, the government is also concerned about private household debt, lowering rates wouldn't do much to curb the Baht but would increase household debt even more.

I think the lower interest rates would certainly have an effect on the Baht as short term money goes where the best rates are and currently Thailand has the best and household debt should be managed by government policy, the banks and householders not the central bank.

[Guest]

And by the way Thailand has a healthy surplus, which some of which should be spent on the more needy in the country.

[MartinKal]

13 hours ago, marcusarelus said:

No one has proposed a method of taking the baht down 5% in relation to the Pound or USD

The baht is strong because of the realities of its economy. Look at foreign reserves, debt and balance of payments, employment, inflation, interest rates, growth prospects. Mock P if you wish, but he is working a long-term strategy (maybe more attention / flexibility to short-term considerations is needed).

 

Look at all that and compare to the leading economies.

 

The States has just lowered interest rates for the first time since 2008 and money will flow out into the baht and other higher-yielding currencies, as a result. (The baht had been expected to weaken through the rest of the year until December when a US rate hike had been expected.)

[marcusarelus]

5 minutes ago, jewell49 said:

And by the way Thailand has a healthy surplus, which some of which should be spent on the more needy in the country.

This is Thailand.  Any money given to the poor will end up in the village headman's pocket.  Figure out something like education moderated by one of the 3 honest bureaucrats in Thailand.

[marcusarelus]

3 minutes ago, MartinKal said:

The baht is strong because of the realities of its economy. Look at foreign reserves, debt and balance of payments, employment, inflation, interest rates, growth prospects. Mock P if you wish, but he is working a long-term strategy (maybe more attention / flexibility to short-term considerations is needed).

 

Look at all that and compare to the leading economies.

 

The States has just lowered interest rates for the first time since 2008 and money will flow out into the baht and other higher-yielding currencies, as a result. (The baht had been expected to weaken through the rest of the year until December when a US rate hike had been expected.)

Have you looked today?

[helloagain]

15 hours ago, nkg said:

Well, Bank of Thailand .....

 

If you lower interest rates, the Thai baht will be less attractive to currency speculators, who will take their their money elsewhere. The baht will fall 5% or so. Everybody wins.

I want the arse to fall out of it

[marcusarelus]

1 minute ago, helloagain said:

I want the arse to fall out of it

Who cares?

[DPKANKAN]

14 hours ago, geoffbezoz said:

"Thailand's central bank is still worried about speculation in the baht <THB=TH> and has tools to handle it"

 

So true, so very true, with tools being the operative word especially now that the PM has put  himself in charge of the economy.

No bigger tool worth the praise!! 5555????????????????

[MartinKal]

Ive looked up the figures. Thailand is doing well, but of course that are problems.

The country has 218 billion dollars of foreign reserves. Growth last year was 4.2%. Inflation is very low too low 0.9%. Unemployment is below 3%. There is a balance of payments excedent of 6.4%.

 

The troubles in the economy come from lower exports due to these trade disputes and poor receipts from tourism due to the strong baht. (Of course there is much more to it than this, and the government can do a great deal to modulate things under its control, but to just characterise and headline.)

 

If Thailand is selling less abroad, could it sell more at home? Could it invest more? Yes it could.

 

It could let more go from its tax expectations ( because if people spend  it's a good thing and if they repay their debts which is a problem in the private sector that is even better!)

 

It could spend some of its reserves, or do some monetary easing as printing money is called, on improving, even rebuilding, the infrastructure. Take care with PPP public-private Partnerships, as they can be real scams. And the experience in the west of QE is a really big red warning flag.

 

Consider transport. Not inter city or the line from China to the west; but just City level transport, especially in the TAT's top 12 tourist towns. Tramways. And this could tick the ecology box as pollution is a really big problem and a big negative for tourism.

 

As well as ecology, social reform is another box that needs ticking. Fundamental Improvement in the education system.  Thailand 4.0. More investment and opportunity in technology - MICE.

 

The north-south Divide is a real potential vote loser and even potentially cause of civil unrest. Inequality is not tolerated these days. While migrant flows from neighboring countries into the richer economy of Thailand are not wanted, inclusiveness is an issue.

 

 

Edited August 1, 2019 by MartinKal

[MartinKal]

37 minutes ago, marcusarelus said:

Have you looked today?

Yes. 30.77 yesterday to 30.73

[FarFlungFalang]

14 hours ago, BestB said:

Bank of Thailand should stop worrying and thinking. With Big P now in charge of economy it will be fixed in no time. 

 

Once riot dispersal vehicles are delivered there will be even less to worry about 

In seven days no doubt!

[Isaan sailor]

If Bangkok Bank sayes it’s worried, then they’re about a year too late.  Tourists will go elsewhere.  Exports are falling.  And the regime wants another ChiCom sub.  That explains why BoT has no plans to lower interest rates.  Gotta built up cash reserves for Thailand 4.0 (aka ChiComs Belt & Road Initiative).

[marcusarelus]

1 minute ago, Isaan sailor said:

If Bangkok Bank sayes it’s worried, then they’re about a year too late.  Tourists will go elsewhere.  Exports are falling.  And the regime wants another ChiCom sub.  That explains why BoT has no plans to lower interest rates.  Gotta built up cash reserves for Thailand 4.0 (aka ChiComs Belt & Road Initiative).

In the past year tourism is up so tourists are not going somewhere else and money for any infrastructure improvements will be taken out a a current operating fund and not bank reserves.  

[marcusarelus]

13 minutes ago, MartinKal said:

Yes. 30.77 yesterday to 30.73

Didn't seem enough to bother with. 

[Isaan sailor]

4 minutes ago, marcusarelus said:

In the past year tourism is up so tourists are not going somewhere else and money for any infrastructure improvements will be taken out a a current operating fund and not bank reserves.  

We shall see, Marcus, what happens to tourists bookings for the coming high season.  I think you will see a nosedive come November (provided we have same Baht exchange rate).

[Chrisswe]

15 hours ago, geoffbezoz said:

"Thailand's central bank is still worried about speculation in the baht <THB=TH> and has tools to handle it"

 

So true, so very true, with tools being the operative word especially now that the PM has put  himself in charge of the economy.

Yes they know how to sucking money out of the country for there's own profit !!!!