BOT plans measures to curb baht’s rapid appreciation

By THE NATION

 

BOT Governor Veerathai Santiprabhob

 

The Bank of Thailand (BOT) plans new measures within a few months to curb the baht’s rise, the central bank’s governor said on Thursday.

 

Among the measures being considered are liberalisation of capital outflows.

 

BOT Governor Veerathai Santiprabhob said the central bank’s Monetary Policy Committee has been worried much about the appreciation of the baht.

 

The BOT is planning additional measures to rein in the rising baht, and it would be ready in one or two months, he told reporters.

 

The new package of measures would cover three key areas, he explained.

 

First, the BOT will liberalise capital outflows by allowing individual investors and institutional investors to take more money out of the country for investment abroad. Exporters will also be allowed to park their money abroad when they earn income overseas. The BOT will also liberalise the currency exchange business and cross-border payment services in order to reduce the cost of cross-border transactions for people and businesses.

 

Second, the central bank will look into the import and export of gold in order to ensure that the gold trade would not move the value of the baht sharply. Veerathai insisted that the central bank would not limit or control the gold trade.

 

Third, the BOT will look into the structure of current account surplus. For example, the bank may encourage more import of capital goods for infrastructure investment, such as more investment to support infrastructure of digital economy.

 

Veerathai, however, clarified that the fast appreciation of the baht over the past few days had been a result of investors bringing in more money to invest in one large company. He did not reveal the name of that company. However, it is widely known in the market that the company being mentioned is Asset World Corp, a leading real estate developer led by billionaire Charoen Sirivadhanabhakdi’s family. The company made its debut in the stock market on Thursday.

 

The baht hit a six-year high on Wednesday and on Thursday it moved at around Bt30.30 per US dollar while some analysts expected it would strengthen to Bt30.

 

Source: https://www.nationthailand.com/business/30377279

 

-- © Copyright The Nation Thailand 2019-10-10

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wowow BOT is soooo reactive and effective

it's really amazing

 

 

 

 

 

 

 

\mode sarcasm off

 

15 minutes ago, snoop1130 said:

plans new measures within a few months 

No rush, na krap. Just wait, and the house of cards collapse.

1 hour ago, snoop1130 said:

result of investors bringing in more money to invest in one large company. He did not reveal the name of that company. However, it is widely known

......B.S

Edited October 10, 20196 yr by mok199

In the mean time prices also steadily rising . Just noticed some food in the supermarket went up in price by 5-7 baht . It’s nothing when you say 5-7 baht but it’s a 10% increase . By the time baht drops prices will be high enough that even with good exchange price would be the same.

 

to make more sense , T-shirts at the market cost 200 baht which is AUD 10,

 

prices keep going up and may well reach 300 baht . By that time baht will drop so AUD will be 30( just example ) now its 20.

 

so 200 baht T-shirt at 20 baht is aud$10, 300 baht T-shirt at 30 baht is same aud$10.

 

in the mean time same quality T-shirt in Australia is $6-$8

The actual overrated THB should be creating deflation in retail, but due to sheer greed, it just gets worse and prices hike and it completly forges the context.

 

Massively flooding the markets with THB will definately lower the rate, but it bears the risk of inflation in that case.

 

They will be trapped either way as they are playing it, spending and borrowing in a world class economy league style, without the adapted financial backbone in the coffers and without the necessary deflation to balance at some point.

Edited October 10, 20196 yr by observer90210

14 minutes ago, observer90210 said:

The actual overrated THB should be creating deflation in retail, but due to sheer greed, it just gets worse and prices hike and it completly forges the context.

 

Massively flooding the markets with THB will definately lower the rate, but it bears the risk of inflation in that case.

 

They will be trapped either way as they are playing it, spending and borrowing in a world class economy league style, without the adapted financial backbone in the coffers and without the necessary deflation to balance at some point.

Prices from push carts remain the same, chicken or pork sticks still same 10 baht , just like watermelon and so on but prices in the supermarkets are going up. 
 

sticky rice still 10 baht from the push cart, retail price of rice up about 5% in the stores 

 

Eggs gone from 80 to 100.

 

Yet 40 baht meals are still 40 baht.

 

it is one big mess which can not end well 

Edited October 10, 20196 yr by BestB

Why wasn't these measure put in a couple of Months ago, and why is it going to take a few more months before they take affect.... 

I alluded to some of the appraches a year back in this forum to ease pressure on Baht but most people are more interested in posting conspiracy theories. 100% capital outflow is a must for a strong currency  that attracts investors for THailand's stable and steady economy. Increased import of capital goods to improve labor produictivity for reducing export cost, allowing expoters options to park their money in foreign banks to meet their demands oversees are all good options. Hope it eases pressure on Baht as it is becoming extremely expensive.

Edited October 10, 20196 yr by onera1961

Rumour has it that George Soros’s Quantum Fund is the culprit. It reminds me of when he broke the Bank of England. Global hedge funds love a challenge they apparently love the Baht too. I expect a lot stronger Baht and increased volatility into the future. 

NOW they are considering actions to keep the Baht from appreciating? Horse, barn door, closed and gone.

8 hours ago, RotBenz8888 said:

 

No rush, na krap. Just wait, and the house of cards collapse.

They only only "planning" it which is entirely different to "doing" it. These things can't be rushed. The elite need time to get their financial affairs in readjusted before any change is made.

57 minutes ago, Cadbury said:

The elite need time to get their financial affairs in readjusted before any change is made.

The elite are making too much money for anything to change soon.  They are parking their baht off-shore in cheap dollars ready to buy back baht at a cut price when/if the baht collapses.

10 hours ago, kingofthemountain said:

wowow BOT is soooo reactive and effective

it's really amazing

 

 

 

 

 

 

 

\mode sarcasm off

within a few months ?????????????????

 

Crisis is now the horse has bolted.

You have been telling stories for months, until your rich friends have speculated enough, nothing will change!

12 hours ago, snoop1130 said:

Exporters will also be allowed to park their money abroad when they earn income overseas.

Bit daft, that. I'd imagine the exporters are using all their money to stay afloat currently

Hey BoT—actions speak louder than words.  How about you lay off the hot money inflows for a few months—then see how your Baht reacts?

13 hours ago, snoop1130 said:

BOT Governor Veerathai Santiprabhob said the central bank’s Monetary Policy Committee has been worried much about the appreciation of the baht.

But doing nothing

 

10 hours ago, Soikhaonoiken said:

Why wasn't these measure put in a couple of Months ago, and why is it going to take a few more months before they take affect.... 

Brainstorming requires a lot of time here

i wonder why..,

Edited October 11, 20196 yr by kingofthemountain

11 hours ago, Soikhaonoiken said:

Why wasn't these measure put in a couple of Months ago, and why is it going to take a few more months before they take affect.... 

of the three measures, the liberalization of capital outflows is the only one the BOT can actually implement on its own, and IMHO will have a modest impact on the exchange rate.

 

it has no authority in regulating the trade of goods (including gold), or adjusting the current account surplus by requiring more imports for infrastructure - these fall under the remit of the government.

15 hours ago, snoop1130 said:

Second, the central bank will look into the import and export of gold in order to ensure that the gold trade would not move the value of the baht sharply.

What is the reasoning behind import and export of gold having an effect on the baht? If you're buying for xxx and selling for the same xxx, how is the baht value changing? 

 

Maybe I'm missing something here.. If you buy something for a penny, and sell again for a penny, there's no value gain.. Gold has a firm worldwide price and continues to gain strength while many international currencies have been fluctuating with a downward trend of late. 

 

Is Thailand stockpiling gold, waiting for a share price gain, and reselling at the new higher price at a profit? 

This is good news.

 

Those capital controls were put in place after the Asian Financial crisis in 1997. They are there to fix that problem. When people rushed to get their money out of Thailand.

 

22 years later he world and Thailand is a very different place. People can invest in Thailand but its a real problem to get your money out. So money is building up and the Baht is strengthening artificially to the extent that it is throttling exports and risking sustainable economic development.

 

22 years later the BOT have recognised this as a problem. BTW global financial institutions don't like capital controls because they cause market distortions like this. They only support them for short term emergencies.

 

22 years of capital controls later. The BOT have recognised this as a problem.

 

Well done.

 

While they are busy removing capital controls they can also remove those import tariffs that also keep the Baht artificially high, imports costs of products (that don't even have competitor producers in Thailand) artificially high and slow down the domestic economy.

What a let down Who published the fact that Hyper Car Tax Revenue has rocketed along side the Bhts fantasy increase. Yes , only that Gang again , not the Nation.⚖️


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12 hours ago, Soikhaonoiken said:

Why wasn't these measure put in a couple of Months ago, and why is it going to take a few more months before they take affect.... 

Right more than many biz related especially with tourism are already collapsing, in few months? probably most ending in graves like mine thought much successful for few years till last June... 

BOT is like a fire truck that shows up after the house is almost burnt down....and the fire station was on the same street as the house.

 

 

15 hours ago, Soikhaonoiken said:

Why wasn't these measure put in a couple of Months ago, and why is it going to take a few more months before they take affect.... 

Because the Generals and the elite haven't got all their money out yet. Why do you think the baht is rising when it should be crashing? Chinese dirty money and even clean money has been leaving China, a few months ago China started putting messured in place to slow/stop this and we seen a massive jump in exports of gold & gems etc China's economy is not doing as well as people think.

17 hours ago, BestB said:

In the mean time prices also steadily rising . Just noticed some food in the supermarket went up in price by 5-7 baht . It’s nothing when you say 5-7 baht but it’s a 10% increase . By the time baht drops prices will be high enough that even with good exchange price would be the same.

 

to make more sense , T-shirts at the market cost 200 baht which is AUD 10,

 

prices keep going up and may well reach 300 baht . By that time baht will drop so AUD will be 30( just example ) now its 20.

 

so 200 baht T-shirt at 20 baht is aud$10, 300 baht T-shirt at 30 baht is same aud$10.

 

in the mean time same quality T-shirt in Australia is $6-$8

A year ago I did the price checking with our shopping at Tops and Big C using tesco UK on line shopping. I was shocked at what I found. Everything I checked was cheaper in the UK even the things that I thought would definitely be cheaper in Thailand pork, chicken and eggs what I found shocked me. The prices were the same or slightly cheaper in the UK. Then the price rises I was seeing of 10 baht on the odd item which were sometimes 30% price jumps. Even 6 years ago when I was looking at cars in Thailand what I found shocked me. All the cars I looked at that were made in Thailand were more expensive than the same vehicle which had been imported to the UK. The captiva was something like £7k more in Thailand. When I went to sell my Everest 3l 4x4 before leaving Thailand which I saw advertised for one million baht I was offered 250,000baht by a dealer who would then go on to sell it for a million. Greed. What has shocked me on returning to the UK after 10 years in Thailand was first the quality in the food for sale far acceded that I found in Thailand and clothes were cheaper in the UK and again better quality. My wife loves shopping here. All she keeps saying is wow, look at how much more this is in Thailand. Its so sad I love Thailand but breaks my hart what the generals have done to the country from 2006 to now. The low wages can no longer be justified, its just the rich getter richer and the poor getting poorer. 

18 hours ago, BestB said:

In the mean time prices also steadily rising . Just noticed some food in the supermarket went up in price by 5-7 baht . It’s nothing when you say 5-7 baht but it’s a 10% increase . By the time baht drops prices will be high enough that even with good exchange price would be the same.

 

to make more sense , T-shirts at the market cost 200 baht which is AUD 10,

 

prices keep going up and may well reach 300 baht . By that time baht will drop so AUD will be 30( just example ) now its 20.

 

so 200 baht T-shirt at 20 baht is aud$10, 300 baht T-shirt at 30 baht is same aud$10.

 

in the mean time same quality T-shirt in Australia is $6-$8

I noticed on my last visit to Macdonalds that the basic hamburger had gone up from 29 to 35 making it more expensive than it is in the UK!! Look at that % rise. There is a lot of trouble brewing and handing out 1000bts to people who don't look as if they need it is only a temporary solution, the economy looks to heading out of control.

21 hours ago, snoop1130 said:

 

The Bank of Thailand (BOT) plans new measures within a few months

for God's sake man, start to move now, implant the new measures now, not tomorrow not next week, now, why wait and make our life more miserable,  some of us already struggling and a couple months more can be a die or survive type situation

19 hours ago, observer90210 said:

The actual overrated THB should be creating deflation in retail, but due to sheer greed, it just gets worse and prices hike and it completly forges the context.

 

Massively flooding the markets with THB will definately lower the rate, but it bears the risk of inflation in that case.

 

They will be trapped either way as they are playing it, spending and borrowing in a world class economy league style, without the adapted financial backbone in the coffers and without the necessary deflation to balance at some point.

... but a little inflation sometimes it's also good, and as you said, sooner or later they will get trapped they don't have the financial power/knowledge to play big leagues