Thai central bank surprisingly cuts key rate, worried by baht strength

[Chelseafan]

"In a Reuters poll, 14 of 15 economists had predicted no rate change on Wednesday while the other forecast a quarter-point cut"

 

So one REAL economist then ????

[legend49]

All too late they have had many flags warning them.

[johnny49r]

19 hours ago, webfact said:

The committee said it was worried about baht strength.

With uncle P in charge of civilian, military, and economic matters, the baht strength won't be a problem. 

 

[alzack]

2 hours ago, soistalker said:

You're going to need to clarify what this means.

It means Thailand is a police state, Papers checks, spying, snooping, following the National socialist model in 1936

[Brunolem]

1 minute ago, alzack said:

It means Thailand is a police state, Papers checks, spying, snooping, following the National socialist model in 1936

Alzack you'd better take your Prozac! 

[alzack]

2 minutes ago, Brunolem said:

Alzack you'd better take your Prozac! 

Thailand , Land of the Free ????

[mikeymike100]

2 hours ago, bbbbooboo said:

Hmmm.... I guess at the end of the day tourists will go where their money has most value. At the moment it’s not Thailand and with the Thai’s homophobic immigration attitudes tourists and falang are looking elsewhere. Som nom na?

Did you mean Xenophobic, instead of homophobic????

[Brunolem]

We are in a typical situation where one (financial investors in this case) has to chose what is called the "cleanest dirty shirt" and Thailand is generally less dirty, financially speaking, than most others. 

 

Imagine that you were forced to chose one lady among a group of ugly ladies. 

 

One, lady Europe, would have no teeth... another one, lady Japan, would have plenty of untreated broken teeth... another one, lady Britain, would expose rows of rotten teeth... and another one, lady Thailand, would have multiple poor quality implants of fake teeth... the latter would probably be your choice, wouldn't she? 

[NightSky]

45 minutes ago, Chelseafan said:

"In a Reuters poll, 14 of 15 economists had predicted no rate change on Wednesday while the other forecast a quarter-point cut"

 

So one REAL economist then ????

When we went to fix our Thai based mortgage a few months ago at the government bank the clerk informed us interest rates would fall in Thailand over the next few years. This may have just been sales spiel since I asked ‘how could you possibly know that?’ They just replied that they know that rates will definately fall.

 

maybe it was just to encourage us to sign but maybe they know something. It was the government bank head office after all, they may have reliable information since they manage the loans - it may be complete speculation on their part although who knows what goes on in this country behind the curtains

Edited August 8, 2019 by NightSky

[Bob12345]

38 minutes ago, legend49 said:

All too late they have had many flags warning them.

The big risks now is that borrowing will become even cheaper and people who are already up to their eyeballs in debt roll over a new loan and buy a new pickup.

 

Great for the economy in the short run but it will be a problem further down the line when they will start to fail on their monthly payments.

[Bob12345]

8 minutes ago, NightSky said:

When we went to fix our Thai based mortgage a few months ago at the government bank the clerk informed us interest rates would fall in Thailand over the next few years. This may have just been sales spiel since I asked ‘how could you possibly know that?’ They just replied that they know that rates will definately fall.

 

maybe it was just to encourage us to sign but maybe they know something. It was the government bank head office after all, they may have reliable information since they manage the loans - it may be complete speculation on their part although who knows what goes on in this country behind the curtains

The Reuters poll asked if the central bank would lower the rates AT THIS MEETING to which 14 out of 15 said no. Main reason would be that central banks often hint at these changes long before time to avoid uncertainty (which financial markets dont like).

 

The guy at your bank indicated rates would go down over a longer period of time. He was just guessing but had an extremely high chance of being right: if the economy goes bad the rates go down to help the economy up. It doesnt take much foresight to see that the Thai economy is not in a good spot, not now, not a year from now, not 3 years from now.

 

Edit: much of his insights might also simply come from the forward rates. So there is barely money to be made with "knowing rates will go down" as everybody knows that already and it has already been incorporated into the prices

Edited August 8, 2019 by Bob12345

[davidst01]

22 minutes ago, NightSky said:

When we went to fix our Thai based mortgage a few months ago at the government bank the clerk informed us interest rates would fall in Thailand over the next few years. This may have just been sales spiel since I asked ‘how could you possibly know that?’ They just replied that they know that rates will definately fall.

 

maybe it was just to encourage us to sign but maybe they know something. It was the government bank head office after all, they may have reliable information since they manage the loans - it may be complete speculation on their part although who knows what goes on in this country behind the curtains

so why would you fix your rate if rates are falling... hope you didnt do it

[jumbo]

40 minutes ago, alzack said:

It means Thailand is a police state, Papers checks, spying, snooping, following the National socialist model in 1936

do we get same color shirts??

[brianbbb]

just hope its early days and is yet to work in lowering the thai baht

[Thaifriends]

After many days there is a subject to discuss in the forum where brain storming is mandatory ????

[hotchilli]

2 hours ago, soalbundy said:

Likewise Euro and pound

Brexit is killing the GBP and my pension.... the high Thai baht just compounds it more.

[pookondee]

19 hours ago, keith101 said:

It will need further cuts if Thailand is to get out of its current financial problems and create more exports and bring back tourists , no good for us Aussies the dollar is sinking fast .

Well you had better brace for more pain mate.

For Aussies, IMO Thailand lowering rates will only serve to keep the $AU level pegging to the baht at what it is now, around 20-21. 

 

Future rate cuts planned for Aus tells you how bad things really are there, as the stealing of savers and retirees money continues. 

If you are planning retiring here and havent yet got the dough in the bank id be doing it now.

 

Having to exchange 800,000baht to put in a Thai bank at exchange rates around 18 or even 15 to the $AU will be big pain.

 

 

[RichardColeman]

20 hours ago, webfact said:

New Zealand's central bank stunned markets by cutting interest rates a steep 50 basis points and even flagged the risk of going nuclear by taking rates below zero.

Be interesting on your untouchable 800,000 baht if the Thais did similarly !

[brokenbone]

2 hours ago, Berkshire said:

Exactly.  Lowering interest rates will hopefully discourage foreign money coming in, which should result in the weakening of the baht over time.  I'm constantly amazed that so many expats buy into the nonsense that the Thais are "manipulating" the THB to make it stronger.  It makes no sense....if one understands anything about international finance and basic economics. 

with an average of 8 years education + senility onset,

maybe its to be expected ?

specially combined with declining currency exchange,

that add a bit of paranoia & desperation in the mix

[worgeordie]

The rates are below inflation,the real inflation,in the real World,

not the figures that  the Government puts out,Cash use to be king,

now it seems been in debt is the way to go,which is why it's so

popular,with Governments ,people,up to the eyes in debt.

 regards Worgeordie

 

[spiroinusa1]

2 hours ago, Berkshire said:

Exactly.  Lowering interest rates will hopefully discourage foreign money coming in, which should result in the weakening of the baht over time.  I'm constantly amazed that so many expats buy into the nonsense that the Thais are "manipulating" the THB to make it stronger.  It makes no sense....if one understands anything about international finance and basic economics. 

As said by Berkshire. Stops money and speculators from dumping more money by buying Baht. Should lead over time to weakening of Baht which helps Thailand. 31.50 t0 32 is great for everyone.

[MartiniMan]

As I have been saying for quiet a while now - recession imminent 

Exports down
autos down
stock market down
tourism down
new house sales down
new house builds down

baht way way up

We are approximately six to 12 months before a major recession that will be uncontrollable by the current management techniques and will result in open free market and complete reversal of pattaya / phuket tourism niches and this time it will be forever to many people have lost their shirts in this nonsense
 

Edited August 8, 2019 by MartiniMan
typos

[keith101]

28 minutes ago, pookondee said:

If you are planning retiring here and havent yet got the dough in the bank id be doing it now.

No , absolutely no plan of retirement here don't have the funds and will be going tourist visa next January when my non o extension finishes and then going back to Aus for good with the dollar forecast to go down to 0.54c US . 

[Mavideol]

2 hours ago, Isaan sailor said:

Fact: Thai Baht fastest growing currency in Asia.

Fact: Thailand holds record USD reserves.

Fact: China holds Trillions of USD debt in short term bonds.

Fact: Thai regime has signed multiple bi-lateral trade deals with ChiComs

Fact: Gen. Prayat claims Thailand 4.0 fits perfectly with ChiComs BRI.

Conjecture: ChiComs made deal to dump their maturing USD bonds into Thai bonds (aka hot money inflows).  This ongoing deal began several years ago.  Now we have high Baht, damaged exports and precarious tourism. China gets safe investments to help fund BRI.

great theories of economics  555

[hobz]

3 hours ago, Berkshire said:

Exactly.  Lowering interest rates will hopefully discourage foreign money coming in, which should result in the weakening of the baht over time.  I'm constantly amazed that so many expats buy into the nonsense that the Thais are "manipulating" the THB to make it stronger.  It makes no sense....if one understands anything about international finance and basic economics. 

I don't think this will weaken the THB in relationship to Western currencies because those Western currencies will probably follow suit and lower their interest rates as well. The usd already did.

[jesimps]

3 hours ago, Berkshire said:

Exactly.  Lowering interest rates will hopefully discourage foreign money coming in, which should result in the weakening of the baht over time.  I'm constantly amazed that so many expats buy into the nonsense that the Thais are "manipulating" the THB to make it stronger.  It makes no sense....if one understands anything about international finance and basic economics. 

It depends where the elites in charge have their own money invested.

[Chivas]

4 hours ago, soalbundy said:

Likewise Euro and pound

Why would it make any impression on the Euro or Sterling lol.  If it didnt against the USD its not going to against any other currency

Someone else who thinks there is a direct exchange rate to the Baht for every currency. Only USD had that priviledge

[Peterbilt]

2 hours ago, alzack said:

It means Thailand is a police state, Papers checks, spying, snooping, following the National socialist model in 1936

I don't agree with you.
Yes, Thailand has become a police state, but the methods of the nazis back in the 1930s weren't that sophisticated like they are today.
I think Thailand is about to follow the model of the big asian brother in the north - China.

[Peterbilt]

47 minutes ago, MartiniMan said:

As I have been saying for quiet a while now - recession imminent 

Exports down
autos down
stock market down
tourism down
new house sales down
new house builds down

baht way way up

We are approximately six to 12 months before a major recession that will be uncontrollable by the current management techniques and will result in open free market and complete reversal of pattaya / phuket tourism niches and this time it will be forever to many people have lost their shirts in this nonsense
 

What do you mean with "complete reversal of pattaya / phuket tourism niches"?

But anyway, I wish that your prediction of a major recession will come true for Thailand. It would be so well deserved....
Somm numm nah, Somchai!

[Stevemercer]

4 hours ago, Runamile said:

The rate cut in itself is not significant but final admission that the Baht rate is too high may possibly represent minds concentrating and concentrating on a range of measures. So potentially good news, but as only a marker, way too late for many collapsing businesses and, of course, the many that have already gone under.

Yes, what is needed now is for the Government to say that they believe the Baht is too strong. However, who can speak with authority for the Government, and does the Government think the high Baht is harming the economy. I suspect not.