Thai central bank should ensure baht is competitive for trade - deputy PM

[webfact]

Thai central bank should ensure baht is competitive for trade - deputy PM

 

FILE PHOTO: A Thailand Baht note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

 

BANGKOK (Reuters) - Thailand's central bank should ensure the baht <THB=TH> is competitive and has trade advantage, Deputy Prime Minister Somkid Jatusripitak said on Wednesday, as the coronavirus outbreak hits the economy.

 

The baht traded at 32.47 per U.S. dollar at 0430 GMT, hovering near three-week highs. But it has weakened by 7.9% against the greenback so far this year.

 

(Reporting by Kitiphong Thaichareon, Writing by Orathai Sriring; Editing by Muralikumar Anantharaman)

 

-- © Copyright Reuters 2020-04-22

 

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[kevin612]

Thai currency is still overvalued, print money for the poor Thai people and the currency depreciates at no time.

Edited April 22, 2020 by kevin612

[smedly]

1 hour ago, webfact said:

The baht traded at 32.47 per U.S. dollar at 0430 GMT, hovering near three-week highs. But it has weakened by 7.9% against the greenback so far this year.

not correct - the US dollar has strengthened - the Thai baht remain gigh against all other currencies

[smedly]

55 minutes ago, kevin612 said:

Thai currency is still overvalued, print money for the poor Thai people and the currency depreciates at no time.

correct - but they have no wish to do so as the super rich want to continue their overseas investments at the cost of international trade and in effect the the bulk of the Thai economy including tourism

 

this is all lip service only

Edited April 22, 2020 by smedly

[Baerboxer]

2 hours ago, kevin612 said:

Thai currency is still overvalued, print money for the poor Thai people and the currency depreciates at no time.

 

This is your view as a greater currency expert than all those involved in the foreign exchange markets, international banking, and various economic journals.

 

Your forex knowledge appears almost as great as your economic wisdom.

[Brickbat]

2 hours ago, smedly said:

correct - but they have no wish to do so as the super rich want to continue their overseas investments at the cost of international trade and in effect the the bulk of the Thai economy including tourism

 

this is all lip service only

My view too. Shameful how they get away with it. 

[Venom]

3 hours ago, kevin612 said:

Thai currency is still overvalued, print money for the poor Thai people and the currency depreciates at no time.

Then inflation kicks in and the 320 THB a day minimum wage becomes even more worthless. 

Edited April 22, 2020 by Venom

[Assurancetourix]

1 hour ago, Baerboxer said:

 

This is your view as a greater currency expert than all those involved in the foreign exchange markets, international banking, and various economic journals.

 

Your forex knowledge appears almost as great as your economic wisdom.

I think you don't understand very well.
If you want to be competitive to export worldwide, you have to know how to make sacrifices.

Many countries that did not need it had to devalue their currencies in order to sell their products.
Thailand, not Thailand, The ruling junta has chosen to make the baht strong against the dollar and the euro so that, as other members write, they can continue to buy property and others values in the West; without forgetting their military toys
that's their problem but it prevents Thailand from being competitive at the international level.

[khunken]

1 minute ago, Assurancetourix said:

I think you don't understand very well.
If you want to be competitive to export worldwide, you have to know how to make sacrifices.

Many countries that did not need it had to devalue their currencies in order to sell their products.
Thailand, not Thailand, The ruling junta has chosen to make the baht strong against the dollar and the euro so that, as other members write, they can continue to buy property and others values in the West; without forgetting their military toys
that's their problem but it prevents Thailand from being competitive at the international level.

This is complete rubbish, bordering on conspiracy.

The government, nor the BOT can wave a magic wand to control the exchange rate. The international FOREX market determines  the movement of currencies.

The BOT of course could announce a Baht devaluation and the US, in particular, as well as any country that sells competetive products can legally slap tariffs on Thai goods as per WTO rules. That's shooting yourself in the foot.

With the current lack of tourism money, which normally boosts the Thai Baht, reduced exports and Thai bonds being less attractive to foreign investors, the currency will zig-zag downwards with blips occurring with downward moves in the dollar, Euro & Yen.

[Isaan sailor]

Nice to see someone talking about this.

At this moment, USD/Baht 32.435.

10-year average USD/Baht 32.40.

Sure, the USD look better than it has for the last year or so.

They still have a long way to go, to get competitive.  And you can't hitch your wagon to the Chinese economy.  They will eat you alive (along with bats).

Moody's has just downgraded Thailand's rating to Baa1.  From Positive to Stable.

https://www.moodys.com/research/Moodys-changes-Thailands-rating-outlook-to-stable-from-positive-affirms--PR_422559?cid=HFGG75LYEO30&yptr

 

[Isaan sailor]

Update—USD/Baht now overpriced at 32.35.  And all other western currencies took a nosedive today.  Almost makes you think they don’t want us here...

[Assurancetourix]

1 hour ago, khunken said:

The international FOREX market determines  the movement of currencies.

You have never heard of the many banks that have been caught by the patrol for manipulating the exchange rate.
There’s one that has been in the headlines for some time, it’s HSBC

[khunken]

4 minutes ago, Assurancetourix said:

You have never heard of the many banks that have been caught by the patrol for manipulating the exchange rate.
There’s one that has been in the headlines for some time, it’s HSBC

Yes I've read many articles about banks manipulating INTEREST rates. Those are commercial banks, not central banks. The biggest one took place some years ago when a number of them got together to manipulate the LIBOR rate. That is an interest rate, not a currency exchange rate.

Traders can manipulate rates within banks, which is probably why you refer to HSBC. This happened in 2017, not recently & did not affect the FOREX market.

[bluesofa]

4 hours ago, smedly said:

correct - but they have no wish to do so as the super rich want to continue their overseas investments at the cost of international trade and in effect the the bulk of the Thai economy including tourism

 

this is all lip service only

Very true about the lip service.

So many times in the recent past we kept reading news reports that anyone in the BOT was always quoted as being 'worried' about the strength of the Baht, but never did anything about it.

They must have been told by the real people in charge to leave things as they were, as smedly says above,

[Assurancetourix]

Thailand being an applied pupil of China, there is no need to be a great cleric to understand that she does like her

 

https://www.thebalance.com/how-does-china-influence-the-u-s-dollar-3970466

[Assurancetourix]

For a very long time the Swiss franc was a reference currency but that penalized the exports of this country too much.
The Central Bank of Switzerland took as we say in France "the bull by the horns" and made sure that the rate served becomes negative.
The Central Bank of Thailand has only to follow this example; the Thai currency will return to a level acceptable by the countries which buy the products which it manufactures or produces.

[BuddyPish]

The baht isn't strong; it's our currencies that are weak. 

The Thai baht does not operate on a fix to any currency - it hasn't since 1997.
The forex market decides what it's worth and, for the last year, it's been worth a damned sight more than Western toilet paper.

Why??

Where do we start? How about zero interest rates; how about the Federal Reserve adding the best part of 2 trillion to its balance sheet in the last MONTH alone.

The US government is sending out cheques to people to spend. 

The UK has added another few hundred billion in quantitative easing.
The Bank of England has said it will DIRECTLY finance government spending.

That means the UK Treasury won't even bother trying to borrow the money it needs to pay 80% of everyone's salary from the bond markets - the BoE will just PRINT it (think about that for a second - doesn't it sound like a counterfeit racket?)

 

What has Thailand done by comparison?

It hasn't printed money; it's just borrowing modest sums in the international bond markets.

It's economic future looks daunting but nowhere near as bad as much of the West.

[BuddyPish]

43 minutes ago, Assurancetourix said:

For a very long time the Swiss franc was a reference currency but that penalized the exports of this country too much.
The Central Bank of Switzerland took as we say in France "the bull by the horns" and made sure that the rate served becomes negative.
The Central Bank of Thailand has only to follow this example; the Thai currency will return to a level acceptable by the countries which buy the products which it manufactures or produces.

32.5 to the dollar (the currency in which most global trade is settled) is perfectly OK for Thai exporters.

I don't see a problem here (but then, I'm not bringing monopoly money in from farangland to Thailand)

[khunken]

31 minutes ago, Assurancetourix said:

For a very long time the Swiss franc was a reference currency but that penalized the exports of this country too much.
The Central Bank of Switzerland took as we say in France "the bull by the horns" and made sure that the rate served becomes negative.
The Central Bank of Thailand has only to follow this example; the Thai currency will return to a level acceptable by the countries which buy the products which it manufactures or produces.

What did the Swiss central bank do that Thailand should copy? Right now the Swiss Franc is worth more than the US dollar so your argument about reducing its value is old history.

The BOT has reduced interest rates considerably & relaxed money flow out of Thailand. Both of these are considered a legal method of weakening the currency. So what are you suggesting that Thailand's central bank should do that won't harm the country's exports?

[Assurancetourix]

13 minutes ago, khunken said:

So what are you suggesting that Thailand's central bank should do that won't harm the country's exports?

I wrote it, in words, but you must have zapped it:
serve negative interests so that the baht is no longer considered a safe haven.

[ukrules]

7 hours ago, kevin612 said:

Thai currency is still overvalued, print money for the poor Thai people and the currency depreciates at no time.

You would think that now is the ideal 'excuse' to devalue the currency by printing a <deleted> load of money because they actually need it.

 

But no, they do nothing.....Why?

[khunken]

2 minutes ago, Assurancetourix said:

I wrote it, in words, but you must have zapped it:
serve negative interests so that the baht is no longer considered a safe haven.

I don't have the power to zapp anything you post.

Negative interest rates in Thailand would be a disaster. It would only help Farangs who transfer money into Thailand (which is not what the BOT should or will  pay attention to). Is that you?

So Thais & Thai companies would go even further into debt as they would be paid to borrow. Rich Thais would love it and speculate even more on the SET.

 

Oh is that what the Swiss did before ending up with an even more expensive currency? What you're failing to understand is that drastic measures by the BOT are not needed now. No tourism and other measures that I mentioned already have already weakened the Baht and it will continue to weaken.

 

[Acharn]

3 hours ago, bluesofa said:

Very true about the lip service.

So many times in the recent past we kept reading news reports that anyone in the BOT was always quoted as being 'worried' about the strength of the Baht, but never did anything about it.

They must have been told by the real people in charge to leave things as they were, as smedly says above,

I saw spokesmen for BoT several times explain that they did not dare move too aggressively to lower the baht for fear of being classified as currency manipulators by the U.S. Treasury. This is something real. The Trump administration has issued warnings many times that they are keeping a close eye to prevent other countries from "cheating." I really don't know why the dollar weakened so much against the baht, but I'm glad it's back to normal now, with reason to think the baht will decline further.

Edited April 22, 2020 by Acharn

[exparte]

I worked on the International Trade side of one of the largest Thai Beverage Exporters with P&L responsibility. As the Baht Strengthens against the $USD, profits have gotten worse and exports have shrunk. I can only guess those Thai Companies who have foreign currency loans are the only ones benefitting from the Thai Monetary Policy.

[BeltAndRoad]

On 4/22/2020 at 6:49 PM, Assurancetourix said:

I think you don't understand very well.
If you want to be competitive to export worldwide, you have to know how to make sacrifices.

Many countries that did not need it had to devalue their currencies in order to sell their products.
Thailand, not Thailand, The ruling junta has chosen to make the baht strong against the dollar and the euro so that, as other members write, they can continue to buy property and others values in the West; without forgetting their military toys
that's their problem but it prevents Thailand from being competitive at the international level.

I'm guessing you've never heard of Bretton Woods