Finance Minister vows more action if baht continues rapid appreciation

[webfact]

Finance Minister vows more action if baht continues rapid appreciation

By The Nation

 

Finance Minister Uttama Savanayana said the central bank and the Finance Ministry had together come up with the measures announced on Wednesday.

 

The baht on Thursday closed at Bt30.32 to the dollar in onshore trade, maintaining Wednesday’s level when the central bank cut its policy rate and issued key measures to rein in the rapid appreciation of the Thai currency.

 

Finance Minister Uttama Savanayana said the central bank and the Finance Ministry had together come up with the measures announced on Wednesday.

“It is the first step, and we will do more in the future,” he said in response to scepticism about the effectiveness of the measures to rein in the rising baht in the long run.

 

The central bank announced several measures including allowing exporters to park more money abroad, allowing retail investors to invest directly in foreign securities, increasing the aggregate investment limit regulated by the Securities and Exchange Commission, facilitating easier transfer of money out of the country for individuals and allowing foreign currency settlement for onshore gold trading.

 

“We don’t believe that the rate cut and the measures to boost capital outflows would be effective in weakening the baht,” said Jitipol Puksamatanan, chief markets strategist at Krung Thai Bank.

 

“Market participants believe the baht is a safe haven asset and hence there is high demand for the Thai currency,” he added.

 

He, however, agreed that it was an important step in increasing liquidity in the foreign exchange market, which may lead to less market intervention by the central bank in the long run. Gold traders will also enter the currency speculation turf, he added.

 

Phacharaphot Nuntramas, senior director at Krungthai Compass research, predicted that the baht may continue to appreciate and even rise to Bt29 to the dollar by early next year. This is because the steady increase in tourist arrivals would bring in more earnings in foreign currencies. It is also the season for exporters to repatriate their earnings back home, he noted.

 

Meanwhile, Visit Limluecha, vice chairman of the Thai National Shippers’ Council -- an exporters’ club -- said that exporters were satisfied with the latest measures to curb the baht’s rise. However, it remains to be seen whether these measures will be effective. “If the baht is going to continue to rise, the central bank may need to impose drastic measures to deter short-term inflows aimed primarily for speculation,” he said. 

 

Somprawin Manprasert, chief economist and executive vice president at Krungsri Bank, said the rate cut and capital outflow measures demonstrated that the central bank was moving in the right direction. The baht is unlikely to appreciate rapidly as it did in the past, he said, adding Thailand could achieve economic growth of 2.9 per cent this year, down from the 3.8 per cent growth forecast early in the year.

 

“The economy will not slide further,” he said, sounding optimistic.

 

He, however, suggested that the Bank of Thailand should communicate more with the market.

 

Source: https://www.nationthailand.com/business/30378166

 

-- © Copyright The Nation Thailand 2019-11-08

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[mikebell]

Vows/promises/committees/fine words - no action.

[davehowden]

Another coup will soon sort things out !!

[Cadbury]

 

2 hours ago, webfact said:

Finance Minister vows more action if baht continues rapid appreciation

Only if rapid appreciation? Gradual appreciation is OK then? Is this gradual enough?

Nov	30.16	29.69-30.59	30.14	-0.1%	-0.1%
Dec	30.14	29.55-30.45	30.00	-0.5%	-0.5%
2020
Jan	30.00	29.15-30.03	29.59	-1.4%	-1.9%
Feb	29.59	29.14-30.02	29.58	-0.0%	-1.9%
Mar	29.58	28.87-29.75	29.31	-0.9%	-2.8%
Apr	29.31	29.09-29.97	29.53	0.8%	-2.1%
May	29.53	28.29-29.53	28.72	-2.7%	-4.8%
Jun	28.72	27.96-28.82	28.39	-1.1%	-5.9%
Jul	28.39	28.12-28.98	28.55	0.6%	-5.3%
Aug	28.55	28.24-29.10	28.67	0.4%	-4.9%
Sep	28.67	28.56-29.42	28.99	1.1%	-3.9%
Oct	28.99	27.70-28.99	28.12	-3.0%	-6.8%
Nov	28.12	27.56-28.40	27.98	-0.5%	-7.2%
Dec	27.98	27.98-29.09	28.66	2.4%	-5.0%

https://longforecast.com/usd-to-bht-today-forecast

The Finance Minister needs to be careful about trying to lower the value of the baht. Some of the wealthy 1% might call it treachery. After all, the no. 1 priority of the Prayut government is to protect and improve the wealth of the elite; even with offshore shopping malls and foreign investment and at the expense of the nation's economy.

"Thailand's top retailer Central Group said on Monday it plans to invest over 20 billion baht in Vienna, Osaka and Turin, capitalising on a strong local currency".

https://www.nasdaq.com/articles/thai-retailer-central-group-plans-%24663-mln-overseas-investment-2019-11-03

 

Edited November 7, 2019 by Cadbury

[legend49]

And pigs may fly at the same time.

[quadperfect]

The guy who said too little too late was spot on. Everyone who was on the fence of where to visit on vacation during high season has shifted to the much higher exchange locations. So the rest of asia. I see a lot of farang in phuket this year though. More than in about 7 years.

I see them in villa market. Thats my farang measuring device.

Chinese are almost invisible compared to past 4 years.

[RotBenz8888]

3 hours ago, webfact said:

baht may continue to appreciate and even rise to Bt29 to the dollar by early next year. This is because the steady increase in tourist arrivals would bring in more earnings in foreign currencies. 

Makes more sense the other way: the more the Baht rises, the more tourists will arrive.

[saengd]

9 minutes ago, quadperfect said:

The guy who said too little too late was spot on. Everyone who was on the fence of where to visit on vacation during high season has shifted to the much higher exchange locations. So the rest of asia. I see a lot of farang in phuket this year though. More than in about 7 years.

I see them in villa market. Thats my farang measuring device.

Chinese are almost invisible compared to past 4 years.

Everyone sees different things in Thailand, only days ago posters in Phuket were complaining the place was dead yet here you are saying there's lots of farang.

 

If you want to see Chinese you have to behave like the Chinese and go where they go, when they go. Here in CM posters were saying the place is dead and there are no Chinese. But go out around Niemen Heiman in the evening and there are thousands of them.

 

Too many westerners still look at the number of tourists in the places they visit, not the places other nationalities visit, so what if the bars are empty, that's not a Chinese scene.

Edited November 8, 2019 by saengd

[alant]

Here is a suggestion;

 

Reduce or eliminate the sums of Thai Baht required to be deposited in Thai banks to qualify for visa and visa extensions.

Make residency more attainable to those that wish to do it.

Imagine just how much currency is in the system for these deposits.

[saengd]

9 minutes ago, alant said:

Here is a suggestion;

 

Reduce or eliminate the sums of Thai Baht required to be deposited in Thai banks to qualify for visa and visa extensions.

Make residency more attainable to those that wish to do it.

Imagine just how much currency is in the system for these deposits.

Peanuts by comparison.

[Assurancetourix]

4 hours ago, webfact said:

“Market participants believe the baht is a safe haven asset and hence there is high demand for the Thai currency,” he added.

 

The Bank of Thailand does  have to do like some Swiss and German banks: negative interest;

The inflow of foreign capital will stop and the speculators will withdraw their billions of dollars or renminbi from Thai banks to see if the grass is greener elsewhere.

 

Is it too much to ask some senior officials to have b.alls?

[soalbundy]

5 minutes ago, Assurancetourix said:

The Bank of Thailand does  have to do like some Swiss and German banks: negative interest;

The inflow of foreign capital will stop and the speculators will withdraw their billions of dollars or renminbi from Thai banks to see if the grass is greener elsewhere.

 

Is it too much to ask some senior officials to have b.alls?

America won't like that, "currency manipulator", the big guys can get away with it but not little Thailand, the US likes to club the little guys.

[Brigand]

Fine words and misdirection there. We all know you and your cohorts are under orders and it won't change till your puppet masters say so.

[saengd]

15 minutes ago, Assurancetourix said:

The Bank of Thailand does  have to do like some Swiss and German banks: negative interest;

The inflow of foreign capital will stop and the speculators will withdraw their billions of dollars or renminbi from Thai banks to see if the grass is greener elsewhere.

 

Is it too much to ask some senior officials to have b.alls?

Most of the capital inflows goes into bonds or into businesses here, almost none of it is here just because of the interest rate!

[kevin612]

Thai baht goes down after interest cut. If you come out prior the interest cut, I believe you. You are saying something already happen in the market.

[FritsSikkink]

3 hours ago, mikebell said:

Vows/promises/committees/fine words - no action.

They cut the interest rate with 0.25, that is action.

[FritsSikkink]

3 hours ago, Cadbury said:

 

Only if rapid appreciation? Gradual appreciation is OK then? Is this gradual enough?

Nov	30.16	29.69-30.59	30.14	-0.1%	-0.1%
Dec	30.14	29.55-30.45	30.00	-0.5%	-0.5%
2020
Jan	30.00	29.15-30.03	29.59	-1.4%	-1.9%
Feb	29.59	29.14-30.02	29.58	-0.0%	-1.9%
Mar	29.58	28.87-29.75	29.31	-0.9%	-2.8%
Apr	29.31	29.09-29.97	29.53	0.8%	-2.1%
May	29.53	28.29-29.53	28.72	-2.7%	-4.8%
Jun	28.72	27.96-28.82	28.39	-1.1%	-5.9%
Jul	28.39	28.12-28.98	28.55	0.6%	-5.3%
Aug	28.55	28.24-29.10	28.67	0.4%	-4.9%
Sep	28.67	28.56-29.42	28.99	1.1%	-3.9%
Oct	28.99	27.70-28.99	28.12	-3.0%	-6.8%
Nov	28.12	27.56-28.40	27.98	-0.5%	-7.2%
Dec	27.98	27.98-29.09	28.66	2.4%	-5.0%

https://longforecast.com/usd-to-bht-today-forecast

The Finance Minister needs to be careful about trying to lower the value of the baht. Some of the wealthy 1% might call it treachery. After all, the no. 1 priority of the Prayut government is to protect and improve the wealth of the elite; even with offshore shopping malls and foreign investment and at the expense of the nation's economy.

"Thailand's top retailer Central Group said on Monday it plans to invest over 20 billion baht in Vienna, Osaka and Turin, capitalising on a strong local currency".

https://www.nasdaq.com/articles/thai-retailer-central-group-plans-%24663-mln-overseas-investment-2019-11-03

 

He is not trying, he did. So you are talking BS with your conspiracy theory.

Edited November 8, 2019 by FritsSikkink

[Isaan sailor]

In the case of USD, Thai Baht today about 200 satang off the 10-year average exchange rate.  So yes, I'd say they need take more drastic measures.

[miamiman123]

Why would he or they want to fix it...the baht appreciation is to their and Thailand’s advantage.....period 

it won’t happen anytime soon 

[Banana7]

3 hours ago, saengd said:

Most of the capital inflows goes into bonds or into businesses here, almost none of it is here just because of the interest rate!

I agree with you. As the Eastern Economic Corridor (EEC) activities increase, billions of Euros and USD are going to pour in, being converted to Baht,  as foreigners buy land, building factories and infrastructure. Foreign capital has already started to arrive, parked mostly in bonds. 

 

BOT has extremely restrictive policies on THB outflows. With all the inflows forecasts, the baht will continue to appreciate against Euro, GBP, USD. BOT is reacting too slowly and we'll see at least 28 THB to USD  before the end of 2020 and as the article said, 29THB to USD in 2 or 3 months.

 

THB to USD has moved only 0.2THB for the 0.25% interest rate cut. Normally, that should have resulted in a minimum of 0.5 THB to 1.0 THB. Lots of FOREX hedging continues influence the exchange rate.

[johnsmith8888]

8 hours ago, saengd said:

Everyone sees different things in Thailand, only days ago posters in Phuket were complaining the place was dead yet here you are saying there's lots of farang.

 

If you want to see Chinese you have to behave like the Chinese and go where they go, when they go. Here in CM posters were saying the place is dead and there are no Chinese. But go out around Niemen Heiman in the evening and there are thousands of them.

 

Too many westerners still look at the number of tourists in the places they visit, not the places other nationalities visit, so what if the bars are empty, that's not a Chinese scene.

Not nearly as many as last year. We will see how loy kratong turns out this yea. 

[saengd]

9 hours ago, Cadbury said:

 

Only if rapid appreciation? Gradual appreciation is OK then? Is this gradual enough?

Nov	30.16	29.69-30.59	30.14	-0.1%	-0.1%
Dec	30.14	29.55-30.45	30.00	-0.5%	-0.5%
2020
Jan	30.00	29.15-30.03	29.59	-1.4%	-1.9%
Feb	29.59	29.14-30.02	29.58	-0.0%	-1.9%
Mar	29.58	28.87-29.75	29.31	-0.9%	-2.8%
Apr	29.31	29.09-29.97	29.53	0.8%	-2.1%
May	29.53	28.29-29.53	28.72	-2.7%	-4.8%
Jun	28.72	27.96-28.82	28.39	-1.1%	-5.9%
Jul	28.39	28.12-28.98	28.55	0.6%	-5.3%
Aug	28.55	28.24-29.10	28.67	0.4%	-4.9%
Sep	28.67	28.56-29.42	28.99	1.1%	-3.9%
Oct	28.99	27.70-28.99	28.12	-3.0%	-6.8%
Nov	28.12	27.56-28.40	27.98	-0.5%	-7.2%
Dec	27.98	27.98-29.09	28.66	2.4%	-5.0%

https://longforecast.com/usd-to-bht-today-forecast

The Finance Minister needs to be careful about trying to lower the value of the baht. Some of the wealthy 1% might call it treachery. After all, the no. 1 priority of the Prayut government is to protect and improve the wealth of the elite; even with offshore shopping malls and foreign investment and at the expense of the nation's economy.

"Thailand's top retailer Central Group said on Monday it plans to invest over 20 billion baht in Vienna, Osaka and Turin, capitalising on a strong local currency".

https://www.nasdaq.com/articles/thai-retailer-central-group-plans-%24663-mln-overseas-investment-2019-11-03

 

That forecast is nonsense, it doesn't take into account any policy changes or geopolitical changes, cases in point:

- USD/THB ex. rate does not consider the impact that BOT might remove outbound currency controls.

- GBP/USD assumes the UK will crash out of the Eu in a hard Brexit. (1.15 in Aug 2021)

 

Central Group: what is it that successful conglomerates do when their home currency is strong...they expand overseas, just like the tens of global brands do from all countries, even the UK. You don't even try to make a case that the current PM  is trying to protect the elite, you just say it, in spite of the facts and despite being able to support the statement with at least a single piece of evidence. 

 

 

 

[Lancelot01]

11 hours ago, alant said:

Here is a suggestion;

 

Reduce or eliminate the sums of Thai Baht required to be deposited in Thai banks to qualify for visa and visa extensions.

Make residency more attainable to those that wish to do it.

Imagine just how much currency is in the system for these deposits.

And who has the benefit of the foreign currency equivalent? Not bad on the balance sheet.

[BestB]

IF? last month baht was above 30 to USD, and they were worried and taking steps to prevent further appreciation, It is now below 30 and they saying IF?

[Dumbastheycome]

The imbalance is  not so much an attraction to the Baht as it is an avoidance of fluctuating other major currencies.

Investment in  Thai Bonds  which  enables  the procurement of  both  local and  offshore investment  assets at a time when speculative opportunities exist via stocks  rather than  cash outflows  which are  regulated .

Positioning. 

Bamboo network versus the  Gnomes.

 

[Benmart]

22 hours ago, soalbundy said:

America won't like that, "currency manipulator", the big guys can get away with it but not little Thailand, the US likes to club the little guys.

Who is this "America" you are refering too? The Federal Reserve Bank, The White House, Walmart, Wall Street?  Please provide specifics and clarify who are the "little guys".

[Tayaout]

24 minutes ago, Benmart said:

Who is this "America" you are refering too? The Federal Reserve Bank, The White House, Walmart, Wall Street?  Please provide specifics and clarify who are the "little guys".

United States Department of the Treasury. 

[WhatsNext]

Those nice predictions are just that, predictions and lets not forget they just project the current trend into the future. However and happily so, NO currency did every appreciate forever, what goes up must go down. 

One political instability later and the baht is 35 to the USD.

 

 

[saengd]

1 hour ago, WhatsNext said:

Those nice predictions are just that, predictions and lets not forget they just project the current trend into the future. However and happily so, NO currency did every appreciate forever, what goes up must go down. 

One political instability later and the baht is 35 to the USD.

 

 

THB rarely moves in line with political instability, even when there was tanks on the streets in Bangkok and snipers were shooting people on Rama IV. Even then, tourists were still arriving visiting the usual places although granted, Patpong was doing great business! Whilst all of that was going on, exporters were still exporting, farmers were still sending their produce to the distributors and tourists were still getting tanned on the islands, the economy has come to tolerate such things. So 35 baht per USD, on the basis of a new government, doubtful, seriously doubtful.

[Banana7]

17 hours ago, saengd said:

That forecast is nonsense, it doesn't take into account any policy changes or geopolitical changes, cases in point:

- USD/THB ex. rate does not consider the impact that BOT might remove outbound currency controls.

- GBP/USD assumes the UK will crash out of the Eu in a hard Brexit. (1.15 in Aug 2021)

 

Central Group: what is it that successful conglomerates do when their home currency is strong...they expand overseas, just like the tens of global brands do from all countries, even the UK. You don't even try to make a case that the current PM  is trying to protect the elite, you just say it, in spite of the facts and despite being able to support the statement with at least a single piece of evidence. 

 

 

 

That forecast seem perfectly reasonable. You don't know what it takes into account.

 

There are many possible BOT policy changes however what the BOT does or doesn't do, is anyone's guess. The BOT has been talking and talking for many months, which only resulted in the baht increasing in strength. The only action the BOT has taken is stated in the article. All the BOT actions, including the 0.25% interest rate drop has resulting in only 0.2 baht increase for a USD, which is insignificant.

 

With high season just starting, that 0.2  baht improvement will quickly disappear. Without more BOT policy changes, and numerous significant changes, USD will be below 30 baht by January 2020.