Limited room for baht's appreciation due to economic challenges

[rooster59]

Limited room for baht's appreciation due to economic challenges

By The Nation

 

 

The baht this week strengthened against the US dollar although the Covid-19 outbreak put pressure on all Asian currencies.

 

 

The US dollar strengthened against the yuan and euro, but weakened against the yen because the current economic condition still affects investor confidence.

 

The International Monetary Fund (IMF) has forecast that the Covid-19 impact would lead to the worst economic downturn in history since 1929, worse than the Great Depression.

 

A strategist at CIMB Thai Bank expected the baht next week to move between 32.30 and 32.80 per US dollar as the Covid-19 outbreak still pressured the baht and other Asian currencies.

 

The Stock Exchange of Thailand Index closed on Friday (April 17) at 1,239.24, up 39.09 or 3.26 per cent with total transactions worth Bt58.989 billion.

 

A strategist at Trinity Securities expected the index next week to fluctuate as the market has both positive and negative sentiments, such as a news report about a new Covid-19 antiviral drug and governments’ move to reopen cities.

 

“Also, we have to keep an eye on listed companies’ financial statements whether it would be worse than analysts' expectations or not,” the strategist said. “We expect the index to move between 1,150 and 1,250.”

 

The price of gold dropped to US$1,694.96 per ounce, while the price in Thailand was Bt25,950 per baht weight.

 

A strategist at YLG Bullion International said that the price of gold dropped as investors sold the metal to take profit.

 

“However, if the price can maintain its level over the zone between US$1,663 and US$1,682 per ounce, it would have a tendency to rise at the zone between US$1,706 and $1,720 per ounce in the short-term,” the strategist said.

 

Source: https://www.nationthailand.com/business/30386313

 

-- © Copyright The Nation Thailand 2020-04-19

 

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[kevin612]

Yes, this week baht is rising. Print more baht to help the poors and this will lead to baht depreciation.

[Henryford]

The baht will get stronger as the Western nations bankrupt themselves to pay for their shutdowns.

[uli65]

nobody in this Ponzi scheme will go bankrupt, thanks to the printing press.

do you really believe Thailand can survive without the money printing nonsense in this economic depression.

[EricTh]

8 minutes ago, uli65 said:

nobody in this Ponzi scheme will go bankrupt, thanks to the printing press.

do you really believe Thailand can survive without the money printing nonsense in this economic depression.

Doesn't printing money devalue the Baht instead?

[vivananahuahin]

Time for helicopter money!

[OnTheGround]

When the world read about 'Uncle lockdown's plead for the 20 richest families to assist the country, that should open the worlds eyes that Thailands financial situation are in dire need of fresh instant capital. Or so it seems, unless a lot was lost in translation.

 

But, as we all learned the last 20 years, the Baht survive time after time.

Will this time be any different?

 

[smedly]

1 hour ago, OnTheGround said:

When the world read about 'Uncle lockdown's plead for the 20 richest families to assist the country, that should open the worlds eyes that Thailands financial situation are in dire need of fresh instant capital. Or so it seems, unless a lot was lost in translation.

 

But, as we all learned the last 20 years, the Baht survive time after time.

Will this time be any different?

 

The baht is a heavily manipulated currency mostly by their own 20 richest to support their overseas investments - what happens in-country or to the very poor population is of little interest to them - greed wins 

[Isaan sailor]

Finally figured out why most everyone’s currency dipped at the end of trading yesterday.  USD, Euro, Yen, Chinese Yuan, Swiss, etc. all dropped at the last minute, in unison.  I checked all the usual suspects—no clues.

Lastly the Russian Ruble—UP with an inverse pattern that matched everyone else’s drop.

Russia must have dumped some USD, and purchased Baht.  If you can disprove this, let me know.  Welcome to currency wars.

[hotchilli]

The amazing baht... impervious to everything.

[Skeptic7]

8 hours ago, Henryford said:

The baht will get stronger as the Western nations bankrupt themselves to pay for their shutdowns.

Unfortunately, believe this will prove correct. 

[garrya]

42 minutes ago, Skeptic7 said:

Unfortunately, believe this will prove correct. 

Would be wonderful before placing orders to import a couple of things.

[EricTh]

5 hours ago, Isaan sailor said:

Finally figured out why most everyone’s currency dipped at the end of trading yesterday.  USD, Euro, Yen, Chinese Yuan, Swiss, etc. all dropped at the last minute, in unison.  I checked all the usual suspects—no clues.

Lastly the Russian Ruble—UP with an inverse pattern that matched everyone else’s drop.

Russia must have dumped some USD, and purchased Baht.  If you can disprove this, let me know.  Welcome to currency wars.

 

Where do these high volume currency sellers and buyers conduct their business? Do they determine the value of currency each day?

 

 

[Isaan sailor]

21 minutes ago, EricTh said:

 

Where do these high volume currency sellers and buyers conduct their business? Do they determine the value of currency each day?

 

 

Central bankers accumulate reserves through international trade.  Russia has $432. billion.  Thailand has over $200 billion.  They can buy and sell at will, and they probably use secure online trading, similar to individual currency traders.

Too bad Thailand doesn’t part with some of their reserves.

[spidermike007]

I do not think it is that simple for Thailand. They are not capable of just printing money, like they are doing in the US. They seem to require some external loans, and bond programs to finance this bailout. Where that will leave the baht remains to be seen. 

 

The package for South-east Asia's second-largest economy includes a law to borrow one trillion baht plus central bank measures worth another 900 billion baht in soft loans and support for corporate bonds, Mr Uttama told a news conference. Of the one trillion baht borrowing, 600 billion baht will be for public health works and relief measures, and the rest for rebuilding the economy and job creation, Mr Uttama said. The government expects to start borrowing in early May, mainly from domestic sources, he said.

 

https://www.straitstimes.com/asia/se-asia/thailand-announces-825b-plan-to-mitigate-coronavirus-impact

[EricTh]

13 hours ago, Isaan sailor said:

Central bankers accumulate reserves through international trade.  Russia has $432. billion.  Thailand has over $200 billion.  They can buy and sell at will, and they probably use secure online trading, similar to individual currency traders.

Too bad Thailand doesn’t part with some of their reserves.

I am not sure whether my understanding is correct.

 

By 'central banker', do you mean each country has only ONE entity that will determine the rate of their currency by selling and buying on the international market?

 

So it is just an electronic transfer of money?