Currency Manipulation

[Matzzon]

3 hours ago, saengd said:

Thailand is right on the edge of being labelled a currency manipulator because its current account surplus is approaching USD 20 bill., basically that means the value of Thailand exports is far more than its imports. There's no penalty for being included on this list and if they do join they'll be in good company, Malaysia, Vietnam, Singapore and China are also being monitored!

 

So the question is, for all you currency manipulator theorists, are all those countries really manipulating their currencies also, just like Thailand is supposedly doing, is all of SE Asia a currency manipulator?

 

No it has nothing to do with currency manipulation. That list is only something made up by the big home fries country called USA. They must have that so that they can have just another tool to adjust the world economy the way they want other countries to sell and buy products and services. just a pathetic list made up by a country with a big hubris.

[Roy Baht]

And by the way, the US itself is a massive currency manipulator. Ever hear of "quantitative easing"?

[Peterw42]

32 minutes ago, RichardColeman said:

More interested in what nutcases are buying thai products when the baht is daftly high

Most Australians that buy a new car, 4 out of 5 of the top selling cars in Australia come from Thailand.

[sammieuk1]

All I know for sure is the £ fell of mount Everest nearly 4 years ago before plunging into the Mariana trench with me attached it sure is dark down here????    

[saengd]

19 minutes ago, Roy Baht said:

Not on the monitor list. Only if you are branded a currency manipulator (as China was).

 

ADDED: Italy, Ireland, Switzerland are on the monitor list and their reputations don't really seem to have suffered from it.

It's easier to beat up or threaten a third world country than it is a Reserve Currency country such as Switzerland, that speaks volumes in itself.

[henry2109]

Labelled a manipulator by whom? The conman in the White House! You do not have to believe what he tells you, it is mostly not correct. He is confused because Thailand has a stronger export industry then the US.

 

The thai baht is strong, and it is for a reason: a) the trade surplus, b) the foreign currency reserves and c) the relativlely low state debt. I do not see a manipulation take place. The currency market is huge, and I would not know to manipulate it. 

 

However, even the thai officials got surprised by the extend of the strength of the baht, and they are making efforts to bring it back a little down, to more "normal" levels, since the export industries and tourism is suffering. This cannot be done just by talking it down, how some posters on this forum seem to believe. Its done by changes in the BOT policy, and also this might only bring small changes and may use time. As long as the thai baht is a freely convertible and as such tradable worldwide, it is the open market which makes the prize of the currency.

[saengd]

1 minute ago, henry2109 said:

Labelled a manipulator by whom? The conman in the White House! You do not have to believe what he tells you, it is mostly not correct. He is confused because Thailand has a stronger export industry then the US.

 

The thai baht is strong, and it is for a reason: a) the trade surplus, b) the foreign currency reserves and c) the relativlely low state debt. I do not see a manipulation take place. The currency market is huge, and I would not know to manipulate it. 

 

However, even the thai officials got surprised by the extend of the strength of the baht, and they are making efforts to bring it back a little down, to more "normal" levels, since the export industries and tourism is suffering. This cannot be done just by talking it down, how some posters on this forum seem to believe. Its done by changes in the BOT policy, and also this might only bring small changes and may use time. As long as the thai baht is a freely convertible and as such tradable worldwide, it is the open market which makes the prize of the currency.

Except THB is not freely convertible, export of THB is very restricted and the amount that can be held by foreign banks is limited. That said, the FOREX market and the BOT do agree that the daily fixing rate is the same, otherwise an offshore market with a different rate would arise.

[Peterw42]

People need to step back and apply some basic rules of supply and demand, if there is a demand for something, the price goes up.

30 million tourists, anyone who buys a hard drive, anyone who buys a car made in Thailand, all creates a demand for Thai Baht.

 

Its the same principle that applies to bananas, if there is a demand, the price goes up.

[jumbo]

59 minutes ago, Sticky Wicket said:

No, he could put higher tariffs on, like he was going to do a few months ago.

That would mean less sales in the US obviously as people would choose alternatives

And yes I do understand economics!

Thai exports 1-on-1

United States: $27.9 billion (11.2%)

 I guess you are mixing up exports is USD with exports to the US... the latter is a 10% 'impact'

 

[kingdong]

Are all the payments made by farangs  to their"one and only" via western union come into the equation of Thailand's wealth?this is a serious question.

[Roy Baht]

13 minutes ago, kingdong said:

Are all the payments made by farangs  to their"one and only" via western union come into the equation of Thailand's wealth?this is a serious question.

Good question. But I don't think there's as much of that as there used to be. Of course, there are also educated Thais working abroad sending money home. I'd heard that much of the Philippines's economy relies on overseas remittances, and I'm sure that affects the peso. I just don't think there's as much baht coming in that way to make much of a difference here.

Edited January 14, 2020 by Roy Baht

[JonnyF]

1 hour ago, Yinn said:

Hello saengd 

 

maybe I think wrong, you can explain.

 

people like to buy product we make. Popular. And we not need to buy product from other country. Not our problem.

 

Similar, Trump say China must buy more product from USA. But USA product is expensive and low quality, eg Chevrolet, McDonald’s. Should be up to the consumer= free market. 

 

Generally speaking IMO

USA product low quality and expensive. eg Chevrolet 

china product low quality and cheap

europe product high quality and expensive. Eg Benz, BMW 

japan product good quality and not expensive. Toyota, Honda

You have oversimplified it. Lots of Thais would love to buy European products like BMW, Benz, Gucci, Armani etc. but they simply cannot afford to. The reason a lot of USA and European products are so expensive in Thailand is the import tax that the government puts on foreign products to protect the domestic market. For example 1.2 Million for a decent spec Harley Davidson, 3 Million for a low spec BMW, 700 Baht for a decent bottle of French wine. These products are 2 or 3 times the price that they cost in Europe or the USA due to the Thai government taxing them to the point that few ordinary Thais can afford them. It's simple protectionism. Nothing to do with Thai products being great and European/US products being bad.

 

So far Thailand has got away with heavily taxing imports but exporting with very little tax. If Trump suddenly decides he has had enough of this (as he did with China) and decides to reciprocate the taxes that Thailand puts on many US products then Thai exports could drop very quickly indeed. 

 

 

[Traubert]

1 hour ago, JonnyF said:

You have oversimplified it. Lots of Thais would love to buy European products like BMW, Benz, Gucci, Armani etc. but they simply cannot afford to. The reason a lot of USA and European products are so expensive in Thailand is the import tax that the government puts on foreign products to protect the domestic market. For example 1.2 Million for a decent spec Harley Davidson, 3 Million for a low spec BMW, 700 Baht for a decent bottle of French wine. These products are 2 or 3 times the price that they cost in Europe or the USA due to the Thai government taxing them to the point that few ordinary Thais can afford them. It's simple protectionism. Nothing to do with Thai products being great and European/US products being bad.

 

So far Thailand has got away with heavily taxing imports but exporting with very little tax. If Trump suddenly decides he has had enough of this (as he did with China) and decides to reciprocate the taxes that Thailand puts on many US products then Thai exports could drop very quickly indeed. 

 

 

If they completely halted sales to the US, sales would drop by 11.2% as shown above. A good chunk yes, but not a killer blow, plus the US would have to find alternatives pretty quick to satisfy demand. In terms of agricultural produce their likely alternative would be.....China.

 

Donny rarely has a plan B.

[legend49]

4 hours ago, saengd said:

Can I remind that this is about the potential for currency manipulation and not government, the strength of the Baht is under the control of the independent central bank.

Wrong. The BOT monitors the baht but the Finance Minister ( GOVERNMENT) has control over BOT. Watch the Bloomberg video taken 2 days ago with the THai Finance Minister and learn facts.

[Baerboxer]

5 hours ago, deej said:

How can that be classed as Sad

Smell the coffee????

The Thai Baht is over valued by minuim of 20% in  some cases 30% (currencys) and that is Fact????

 

 

Over valued - not according to the Forex traders and professionals it not. Or they'd all be selling and the baht would fall against the dollar and other currencies.

 

Your opinions aren't automatically facts.

[deej]

8 minutes ago, Baerboxer said:

 

Over valued - not according to the Forex traders and professionals it not. Or they'd all be selling and the baht would fall against the dollar and other currencies.

 

Your opinions aren't automatically facts.

When sh#t finally  hits the fan. the Thai Baht will  be dropped like a Hot Potatoe????

[Roy Baht]

11 minutes ago, deej said:

When sh#t finally  hits the fan. the Thai Baht will  be dropped like a Hot Potatoe????

Yes but that is how currencies work. The fact that it will fall in the future doesn't mean it is over-valued now. It is properly valued now based on current economic factors. When those factors change and the currency falls, it will be properly valued at that time too.

[deej]

2 minutes ago, Roy Baht said:

 It is properly valued now based on current economic factors

From my laymans view. Those economic factors are made of Disneyland Stuff or to put it another way Rubber Figures

and in due course the Sh#t will hit the fan . A march was held over the weekend 

perhaps the start 

[Guderian]

6 hours ago, Henryford said:

The only currency manipulators are the Western Governments who are determined to devalue their currencies.

Yes indeed, how is the UK not on the US list of currency manipulators?

[saengd]

4 hours ago, kingdong said:

Are all the payments made by farangs  to their"one and only" via western union come into the equation of Thailand's wealth?this is a serious question.

It depends which currency you're sending that when it's received gets exchanged for Baht. If it's USD then yes, you're selling Dollars and buying Baht so you're causing the BBaht to strengthen. If any other currency then you're simply adding to the GDP under the heading, tourism.

[saengd]

4 hours ago, JonnyF said:

You have oversimplified it. Lots of Thais would love to buy European products like BMW, Benz, Gucci, Armani etc. but they simply cannot afford to. The reason a lot of USA and European products are so expensive in Thailand is the import tax that the government puts on foreign products to protect the domestic market. For example 1.2 Million for a decent spec Harley Davidson, 3 Million for a low spec BMW, 700 Baht for a decent bottle of French wine. These products are 2 or 3 times the price that they cost in Europe or the USA due to the Thai government taxing them to the point that few ordinary Thais can afford them. It's simple protectionism. Nothing to do with Thai products being great and European/US products being bad.

 

So far Thailand has got away with heavily taxing imports but exporting with very little tax. If Trump suddenly decides he has had enough of this (as he did with China) and decides to reciprocate the taxes that Thailand puts on many US products then Thai exports could drop very quickly indeed. 

 

 

Except the US market only represents 12% of Thai exports, as shown earlier hence a part of me says, go ahead and tax what you want, it doesn't really matter.

[saengd]

1 hour ago, legend49 said:

Wrong. The BOT monitors the baht but the Finance Minister ( GOVERNMENT) has control over BOT. Watch the Bloomberg video taken 2 days ago with the THai Finance Minister and learn facts.

Nope, regardless of what BB video's may say! Government makes policy that BOT operationalise, how they operationalise is at their discretion.

 

A few years ago the then government tried to influence the governor of BOT, Warrissa P., and tried to get their hands on the Foreign Currency Reserves. She said no, they said gimme and the highest power in the land came out publicly in support of Warrissa.

[saengd]

56 minutes ago, deej said:

From my laymans view. Those economic factors are made of Disneyland Stuff or to put it another way Rubber Figures

and in due course the Sh#t will hit the fan . A march was held over the weekend 

perhaps the start 

What factors, please demonstrate why and how they are "rubber figures". The trade surplus, the levels of the foreign currency reserves, the FDI, which and why? 

Edited January 14, 2020 by saengd

[deej]

 

I 

31 minutes ago, saengd said:

What factors, please demonstrate why and how they "rubber figures". The trade surplus, the levels of the foreign currency reserves, the FDI, which? 

Without the risk of repeating myself .iam just a layman but my view from  retiring here  near 20 yrs ago  the present Incumbents( in all phrases )are Doctor Of Spin 

even Blind Freddy  is aware how they reached their goal

of power. and the Thai Baht has followed in their footsteps

Edited January 14, 2020 by deej

[Lacessit]

It suits the military's book to have a strong baht so they can buy the tanks, submarines and helicopters they so desperately need. However, I doubt the baht is being manipulated, because currency speculators would be all over it like a rash.

Having said that, the real manipulation comes in the form of tariffs and customs duties. IMO Thailand is the most protectionist country on the planet.

[saengd]

27 minutes ago, deej said:

 

I 

Without the risk of repeating myself .iam just a layman but my view from  retiring here  near 20 yrs ago  the present Incumbents( in all phrases )are Doctor Of Spin 

even Blind Freddy  is aware how they reached their goal

of power. and the Thai Baht has followed in their footsteps

Perhaps if you understood how the exchange rate is calculated and the FOREX market works that may help.

 

Every currency transaction involving the Baht, anywhere in the world, eventually goes through the Bank of Thailand, the same is true of every US dollar transaction, they all go through the Federal Reserve Bank at some point, typically sooner rather than later. Small transaction gets amalgamated upwards until super large transactions end up in the hands of dealers, banks and brokers who transact in deals worth billions of Baht or Dollars. BOT (and the Federal Reserve) gets to see the amount of those transactions so both of them understand fully the extent to which their currency is being bought or sold every day.

 

Every morning BOT looks at the previous days currency transactions and also at the factors that impact the Thai economy. On the basis of those things they fix an exchange rate to start each trading day. If the market, the large dealers, banks and brokers, think the BOT fix rate is wrong they will come up with what they think is the correct rate and the rate will correct, both sides have to agree, BOT and the brokers/banks otherwise a secondary offshore market develops using a different exchange rate.

 

In a nutshell, the entire global FOREX market as well as the BOT have to agree that the exchanges rate is correct and appropriate both by looking at the volume of currency traded and at the factors comprising the Thai economy. This is not, as some might have us believe, a few blokes sitting around a table trying to massage the numbers in their favour or pulling some fictitious number out of a hat!

 

Edited January 14, 2020 by saengd

[Laza 45]

7 hours ago, tonray said:

It's an absurd notion that a country whose currency is at a 6 year high against the global reserve currency, the US Dollar, can be considered a currency manipulator. It just so happens that Thailand has always been more of an export economy than one designed to thrive on services. They export large amounts of agricultural products and also have the #1 auto manufacturing hub in Souteast Asia, exporting to many other nations. This is one of those anomalies like Body Mass Index where a very fit bodybuilder is considered obese by looking at the chart.....to be ignored. 

Well said.. absolutely right.   If they were going to manipulate the Thai currency it would be in the other direction to reduce the value of the Bt against the $US to export even more.. Trump hates the trade imbalance with Thailand and others hence the 'watch list'.. 

[kevin612]

I agree, baht is overvalued and They want more people to come and spend like crazy. Many tourists come here because cheap, tourists will choose somewhere when Thailand is no longer affordable.

[saengd]

11 minutes ago, kevin612 said:

I agree, baht is overvalued and They want more people to come and spend like crazy. Many tourists come here because cheap, tourists will choose somewhere when Thailand is no longer affordable.

You haven't read the thread, we can tell! ????

[Suradit69]

8 hours ago, Berkshire said:

Do you have any idea what you're talking about?  If the US wanted Thailand to eliminate the trade imbalance, they'd want the THB to get even stronger to make Thai exports less competitive.  Is that what you're asking Trump to do?

 

Every time a TV genius mentions the THB and "manipulation," they demonstrate how little they understand basic economics. 

Agree. We've seen many posts about the fabled superior farang logic in other threads, but much of what's written in this thread demonstrates a total lack of logic.

 

It's difficult to try to even argue against the comments made in this thread since they are all over the place.

 

There would be no strategic reason for Thailand to manipulate the baht higher/stronger.   And to say this thread is about currency manipulation so we shouldn't bring trade or trade balances into the conversation boggles the mind.

 

As Lincoln once said: It's better to remain silent and be thought a fool than to speak out and remove all doubt. (or something along those lines).

 

 

 

 

 

Edited January 14, 2020 by Suradit69