Thai central bank to ease FX rules due to limited scope on rates

[saengd]

1 hour ago, Isaan sailor said:

What’s really telling: central bank refuses to give details as to where these hot money inflows come from.  All we hear from them is that they keep flowing in, jacking up the Baht, and boosting their USD reserves.

When will they tell us the full details?  This coverup only hurts the Thai economy, and their credibility more and more.

International export bills are typically settled in USD, currently about 65% of Thailand's exports are paid for using USD, the remained are in a range of currencies and also Yuan currency swap agreements.

[saengd]

1 hour ago, Isaan sailor said:

Not an anomaly.  The latest FX move happened last night—FX open and trading. We woke up to this rate.  And it flatlines on Sunday.

Thompsons Reuters takes over responsibility for international FOREX market settlements from 5pm Friday until 07:00 Monday morning, rates during that time are only indicative. 

[Isaan sailor]

48 minutes ago, saengd said:

Thompsons Reuters takes over responsibility for international FOREX market settlements from 5pm Friday until 07:00 Monday morning, rates during that time are only indicative. 

We’re on the same page.  Thank you.

[hottrader77]

9 hours ago, soalbundy said:

Often such talk alone is enough to lower the FX rates, at least temporarily

farlangs are getting ripped off anyway with exchange rates GBP is only about 38 to pound when it should be 60 to pound then thais might get a lot more british coming to Thailand try adjusting this or face the consecences

[Nice Boyd]

4 hours ago, hottrader77 said:

farlangs are getting ripped off anyway with exchange rates GBP is only about 38 to pound when it should be 60 to pound then thais might get a lot more british coming to Thailand try adjusting this or face the consecences

The most selfish society I’ve ever come across, lol

[saengd]

If BOT wants to ease the ex. rate it will have to impose a tax on short term hot money inflows, last time they did that it was 10% for anything less than one year and it was effective although it did cause onshore and offshore rates to diverge. The other option is to move from a managed peg against USD and go for a managed peg against a basket of ASEAN currencies, that would level the playing field and put THB on par with other regional currencies.

[dallen52]

17 hours ago, thaistocks said:

Consider, its such a big deal anytime anybody here wants to send money abroad. It usually takes at least an hour at the bank counter, a long sheet to be filed out, along with their firm request you give them a copy of a foreign bill or other "evidence" why you want to send funds abroad.  Why is there a why? Is this some kind of BOT requirement? Does this make sense? By making it easier, fast, fair convenient would induce more here buying foreign currency so helping weakening the Baht. Vs. this sticky procedure which has the opposite effect. In place by all Thai banks as far as I know.

Oddly enough when I transfer to Thailand from my Australian account it disappears within seconds, but can be up to 2 days before Kasikorn actually shows anything. 

Used to work on the velocity of money and its value when with Ford Treasury.

The velocity certainly slows into a black hole when its coming here.

Its obviously exists somewhere and has some revenue generating ability for someone..

(Less the Australian transfer fee and less a Kasikorn bank fee)

 

I think I mentioned before that "her in doors" is still waiting for the explanation of where the 15,000 baht is going each month, that exchange rates have eroded. 

[steven100]

22 minutes ago, dallen52 said:

Oddly enough when I transfer to Thailand from my Australian account it disappears within seconds, but can be up to 2 days before Kasikorn actually shows anything. 

when I use Citibank Australia, the money shows up in my Thai bank within hours on the same day. No international transfer fee, withdrawal at Citibank ATM free … no fee.

[saengd]

31 minutes ago, dallen52 said:

Oddly enough when I transfer to Thailand from my Australian account it disappears within seconds, but can be up to 2 days before Kasikorn actually shows anything. 

Used to work on the velocity of money and its value when with Ford Treasury.

The velocity certainly slows into a black hole when its coming here.

Its obviously exists somewhere and has some revenue generating ability for someone..

(Less the Australian transfer fee and less a Kasikorn bank fee)

 

I think I mentioned before that "her in doors" is still waiting for the explanation of where the 15,000 baht is going each month, that exchange rates have eroded. 

Transfers usually take longer when there's an intermediary bank involved. If your home bank has a direct relationship with the bank in Thailand and doesn't need to use a middle man, it's a lot quicker and cheaper since the intermediary also takes a fee.

[saengd]

11 hours ago, saengd said:

International export bills are typically settled in USD, currently about 65% of Thailand's exports are paid for using USD, the remained are in a range of currencies and also Yuan currency swap agreements.

Trivia regarding Thailand Foreign Currency Reserves.

 

Thailand's foreign currency reserves comprise 24 different currencies representing the currencies of their largest trading partners and includes significant holdings in THB. Only around 50% of the estimated USD 207 bill. is held in USD. For valuation purposes the foreign currency reserves are always expressed in USD but this can vary substantially as the value of individual currencies rise and fall.

[Fairynuff]

Now that the weekend is over and trading has begun can anyone see any real downside on the THB? No!

As for this theory that the elites are controlling all this, IMO absolutely not. They’ve always had money overseas and sending it out has never been a problem. Back in the late 90s when the THB was worthless they still got their money out and still remained rich.

[saengd]

9 minutes ago, Fairynuff said:

Now that the weekend is over and trading has begun can anyone see any real downside on the THB? No!

As for this theory that the elites are controlling all this, IMO absolutely not. They’ve always had money overseas and sending it out has never been a problem. Back in the late 90s when the THB was worthless they still got their money out and still remained rich.

The trigger for any meaningful change in the value of THB will be seen in the newspaper headlines as policy will have to be changed substantially, intraday changes in the ex. rate will not show anything meaningful.

[Srikcir]

21 hours ago, soalbundy said:

Often such talk alone is enough to lower the FX rates, at least temporarily

Following days later the BOT senior director Don Nakornthab reported that the GDP growth for the third quarter was 2.4% year on year. This was only about a month after BOT trimmed its 2019 GDP growth forecast from 2.8% from 3.3%.

Regarding the BOT's decision to cut the key interest rate to 1.25%, Head of Research at CIMB Thai said that decision was "too small and too late." https://www.nationthailand.com/business/30378128

Any "temporary" BOT temporary monetary policy thus far has been ineffective other than to protect a hot baht to the advantage of inflating Thai stock market value and Thais outflow of capital into foreign assets whose income is not taxable unless returned to Thailand.

[mindfulness]

those bygone days when no matter which ATM machine or bank one went to had a abundance of crispy brand new notes, ???? Now those where the days. 

 

Sheesh ever since this farce of a puppet has been dictating, this place has been going into ruin, for business Thais and Foreign, internal economics is a farce.

 

Not for the elite minority, they’re creaming the benefit on their external out of the country investments, buying land and properties, businesses ventures (and no need to be a 49 % shareholder) etc with the freedom and ease to buy. Is there a picture to be seen ????

 

[Srikcir]

On 11/24/2019 at 8:33 AM, rooster59 said:

Thai central bank to ease FX rules due to limited scope on rates

This might better read 'Thai central bank takes limited and ineffective measures to protect the economy.'

BOT starts 2019 with a rate increase of 25 basis points to 1.75%, but still only 50 basis points above its all-time low! This raise is based on a GDP growth rate forecast of 4% for 2019.

What follows is a history of inadequate action (or 'wealth protectionism' for some Thais) as the economy in terms of GDP growth falters*:

 

• Three months later in April BOT lowers its forecast to 3.8% but takes no monetary action other than reducing mortgage loan to value required for commercial banks.
• Two months later in June BOT again cut its 2019 GDP growth forecast to 3.3% while the baht continues to appreciate against the USD.
• The next month in July BOT drops its forecast to 3.1% but takes no monetary action other than tightening controls on short-term capital INFLOWS. 
• In the next month in August after 0.9% loss of forecast GDP growth for 2019 BOT finally reacts with a 5-2 cut in the interest rate by 25 points to 1.5%.
• The next month in September BOT trimmed its 2019 GDP growth forecast to 2.8% from 3.3% but takes no monetary action other than relaxing mortgage lending rules.
• About two months later in November after relaxing FX rules on capital OUTFLOW, BOT finally cuts its key policy rate by 25 basis points to 1.25%.
• On November 11th the GDP third quarter growth rate was 2.4% year-on-year according to BOT senior director Don Nakaornthab.

In eleven months the GDP growth rate has dropped 1.6% or about 40%. And BOT is still considering more measures to contribute to economic growth? So far not very helpful to 'We the Thai Peoples' but certainly not very injurious to 'We the Elite 1%.'

*  History taken from various articles published in Thai Visa; associated links were not cited for brevity but may be provided on request.

[saengd]

It's an absolute nonsensical fairy story to project that BOT spends all its time avoiding measures to improve the economy and finding ways to improve the overseas wealth of a handful of people.....it's ridiculous beyond belief and not worthy of any debate except amongst impoverished and irrational theorists who have zero understanding of economics.

[dallen52]

14 hours ago, saengd said:

Transfers usually take longer when there's an intermediary bank involved. If your home bank has a direct relationship with the bank in Thailand and doesn't need to use a middle man, it's a lot quicker and cheaper since the intermediary also takes a fee.

ANZ is pretty good $9 international service. 

Its just where it goes after you press the send button. 

Best has been about 30 hours..

 

[thaistocks]

On 11/24/2019 at 12:59 PM, Stevemercer said:

The Thai government has agreed to pay China for the very fast train in US dollars. China insists on being paid in US dollars for most big contracts, including procurements (such as the submarines).

 

It is in the government's interests to keep the baht high to support their capital procurement program.

 

Despite the central banks recent rhetoric (admission that the baht is too high) nothing much will change over the short to medium term. This assumes, of course, that the government can continue to balance an over-valued currency against a deteriorating export sector.

Well, alternatively they surely could spend some of these procurements with US$ they already have. I.e With its way over the top $ reserves -just sitting there.  Use a part of them for these $ purchases!  BOT is every soo stinchy with the FR and so being the Baht strengthens more.