Thai central bank chief says worried about rapid baht gains

 

FILE PHOTO: Thailand's Central Bank Governor Veerathai Santiprabhob speaks during an interview with Reuters at the Bank of Thailand in Bangkok, Thailand, October 4, 2019. REUTERS/Matthew Tostevin

 

BANGKOK (Reuters) - Thailand's central bank is still concerned about the rapid strengthening of the baht <THB=TH> and has steadily taken action to prevent the currency from rising too fast, the governor said.

 

The baht's strength has mainly been driven by the country's hefty current account surplus, not "hot money", or speculative fund inflows, Veerathai Santiprabhob told a seminar late on Wednesday.

 

The baht will remain highly volatile, given external uncertainty and high global liquidity, he said.

 

"Nobody can tell if the baht will go higher or lower, but it's likely to be more volatile," Veerathai said.

 

The baht has gained 7.7% against the U.S. dollar this year, making it Asia's best performing currency, and putting further pressure on Thailand's trade-dependent economy amid global trade tensions.

 

Veerathai also said Thai banks' net interest margins were high -at 2.7-2.8%, double those of banks in Singapore - and should be lower.

 

There are no clear measures on how to reduce them yet, but the central bank may consider allowing more non-banks to compete in the market, he said.

 

-- © Copyright Reuters 2019-11-28

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Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

10 minutes ago, keith101 said:

Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

you are asking a no brainer to use his brain 555

7 hours ago, keith101 said:

Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

keith

They don,t do simple here....a smile and a wai and it,s sorted

36 minutes ago, keith101 said:

Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

Please explain how lowering the bank rate to 0.75% will reduce the value of the Baht and lower the value of the current account surplus?

Only been living here for a year and have come to the conclusion that the place is run by idiots and snake oil salesmen.

Struth, what a joke of a country this place is.

Evidently the governor wants to protect the Thais banks with their high interests, which is increasingly extortion, especially on private personal credit.

32 minutes ago, saengd said:

Please explain how lowering the bank rate to 0.75% will reduce the value of the Baht and lower the value of the current account surplus?

Yes only print more money lowering currency same Venezuela and many other countries.

Faster than a speeding locomotive , able to jump tall buildings in a single bound...its SUPER BAHT

One more that never had to qualify for his job and has no clue what’s going on.

Some off topic posts have been removed. 

11 hours ago, keith101 said:

Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

why dont you just admit you have no relevant economy degree ?

53 minutes ago, brokenbone said:

why dont you just admit you have no relevant economy degree ?

Along with the seven others who voted it a good idea, that's very worrying.

look at the FRED chart for the world’s biggest oil exporter.

Trade Balance: Goods and Services, Balance of Payments Basis (BOPGSTB)

 

running fiscal and trade deficits, which are linked along with endless tax cuts and the biggest military spending on Earth.

 

the twenties... here we are.  we could still go massively lower, even if Thailand’s economy was to shrink.

 

 

2 minutes ago, WeekendRaider said:

look at the FRED chart for the world’s biggest oil exporter.

Trade Balance: Goods and Services, Balance of Payments Basis (BOPGSTB)

 

running fiscal and trade deficits, which are linked along with endless tax cuts and the biggest military spending on Earth.

 

the twenties... here we are.  we could still go massively lower, even if Thailand’s economy was to shrink.

 

 

Whatever are you talking about and what does FRED data have to do with THB strength?

14 hours ago, snoop1130 said:

Thai central bank chief says worried about rapid baht gains

The people that matter are not worried - they are buying lots of cheap $$$$ and salting it away off-shore.

14 hours ago, sherwood said:

Only been living here for a year and have come to the conclusion that the place is run by idiots and snake oil salesmen.

Struth, what a joke of a country this place is.

But you relocated here?

Just asking...

8 minutes ago, hotchilli said:

But you relocated here?

Just asking...

The power of the pussy is stronger than the baht.

 

14 hours ago, ICELANDMAN said:

Evidently the governor wants to protect the Thais banks with their high interests, which is increasingly extortion, especially on private personal credit.

@ICELANDMANEvidently, as now of today the interest rates for personal and business loans are less connected to the central bank interest rates but to high risk surcharges

as he said, and as ive explained before, the issue is basically the current account surplus. this surplus is a combination of high exports such as tourism and agriculture etc plus imports kept low due to xenophobic protectionism and high import taxes. so in a way it boils down to thainess. either fix the thainess or the laws of supply and demand will eventually fix the thainess for you and it wont be in a nice way.

So if hot money inflows (mainly from China) do not drive up Baht appreciation—why not do away with bond sales to Chinese investors altogether?  That would prove or disprove this conjecture.

So much they’re not admitting...

16 hours ago, keith101 said:

Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

yeah, just a load of useless blah blah blah.. whilst the country slips into the <deleted>.... IF u took away all their salaries THEN you would see some action...

18 hours ago, snoop1130 said:

Thai central bank chief says worried about rapid baht gains

It has trickled through...

Next stage is the run-around-like-a-headless-chicken-and-flap-your-wings-phase. That will take about 6 months...

Like all politicians, you too have easy speech and you don't say anything concrete!
It is in your power to do something, the problem is that both you and your rich friends are not yet ready for the breakthrough, there is still too much money to be made with speculation!
Move your butt and do something before the country is totally on the ground!

It takes courage to ask for help.

Strong baht=slowing exports.

Slowing exports+high household debt=slower economy=higher unemployment.

Higher unemployment=more bankruptcies=more social spending=lower tax collections=lower interest rates=lower baht.

 

 

An inflammatory post has been removed. 

18 hours ago, ICELANDMAN said:

Yes only print more money lowering currency same Venezuela and many other countries.

Lowering the interest rate on borrowing creates more investment capital available from commercial banks. That in turn depreciates the baht.

This approach is different from 'printing money.' The so-called printing money is capital created by the government from its national bank through issuance of treasury bonds by the government. These bonds are debt instruments and will add to the government's deficit budget. Such means of borrowing may or may not affect the value of the nation's currency.

It's complicated by a host of economic factors. For example with one factor:

• If the nation has a history of never defaulting on its T-bills (ie., the USA) more national debt is unlikely to affect currency value.
• If the nation has a history of default (ie., Venezuela) more national debt will likely devalue its currency further.

Let’s give Veerathai the benefit of the doubt—not much he can do, except worry about the rising Baht.

That could mean his hands are tied.  Someone above him suggested he sit tight.

Now who could do this?

21 hours ago, keith101 said:

Why don't you just admit you have no idea of how to resolve this problem and maybe someone else can take over or just drop the rate  to 0.75% which is still higher than a lot of other Asian nations and release much more of the surplus for use on infrastructure , its fairly simply really .

Why release money for Infrastructure when it is just wasted.

I witnessed today, a small road that just goes to Cassava and Pineapple fields having a White line put down each side and yellow lines in the middle.

Pathetic !