Thai central bank worried about strong baht, ready to use necessary measures

By Orathai Sriring

 

FILE PHOTO: A woman displays Thai baht currency notes in Bangkok in this April 21, 2010 file photo. REUTERS/Vivek Prakash

 

BANGKOK (Reuters) - Thailand's central bank is worried that a rapid rise in the baht <THB=TH> may not be in line with economic conditions which remain fragile due to the impact of the coronavirus outbreak, a deputy governor said on Monday.

 

The Bank of Thailand (BOT) is ready to consider necessary measures to prevent strength in the baht from adding to fragility in the economy, Mathee Supapongse said in a statement.

 

The baht has strengthened at a faster pace than most Asian currencies over the past two weeks helped by slowing coronavirus infections and better-than-expected first quarter economic figures, he said.

 

"The BOT is worried that a rapid rise in the baht may not be in line with economic conditions which remain fragile," he said.

 

Several parts of the economy have been hard hit by COVID-19, which will be clearly seen after second-quarter economic data is released, Mathee said.

 

The baht traded at 31.74 per U.S. dollar at 0252 GMT, its strongest in more than two months. The currency, Asia's best performer in 2019, is down 5.8% since the start of the year.

 

Mathee said that as the coronavirus situation improves, investors may park more of their short-term funds in Thailand, a situation that is not wanted.

 

"The BOT is ready to consider necessary steps to prevent the baht's strength from exacerbating fragility in the economy."

 

Recent high gold prices have helped push up the baht and the central bank will investigate gold transactions and consider additional measures to reduce its impact on foreign exchange rates, he said.

 

The baht is likely to be volatile given changing global developments, and also from transactions related to public and private investment, Mathee said.

 

(Reporting by Orathai Sriring; Editing by Jacqueline Wong)

 

-- © Copyright Reuters 2020-06-01

 

- Whatever you're going through, the Samaritans are here for you

- Follow Thaivisa on LINE for breaking COVID-19 updates

weaken the baht, make Thailand cheaper to visit---Gosh --what a good idea ----why didn't anyone else think of that...................

WOW....they are finally waking up to the fact that keeping the baht artificially high is damaging the economy.

Most people have known that for ages, oh well better late than never.

been saying it for months now - the Thai baht is being manipulated because it floats and is basically free to roam 

 

They are right in their assessment that the strength doesn't match the economic climate especially with a 2 trillion bailout loan on the cards which they will never be able to pay

 

I suggest people do some research on 1997 crash - the similarities are obvious

43 minutes ago, sanuk711 said:

weaken the baht, make Thailand cheaper to visit---Gosh --what a good idea ----why didn't anyone else think of that...................

The problem is that if they make a move to weaken the baht (very few options left) it will cause it to crash, it should have been managed over a long period not a sudden knee jerk action 

 

The baht was allowed to rise unabated because it suited certain people as they moved money and invested abroad - we all have a pretty good idea who they are and they have no interest in the economy because that is not how they got their money

40 minutes ago, webfact said:

Thai central bank worried about strong baht, ready to use necessary measures

It's that word 'worried' making yet another appearance in an article about the BOT and the strong Baht.

 

I'm sure it must be four or five times now the governor or anyone designated to speak to the press claims they're 'worried'.

Too much worrying and no action.

It seems obvious to me the higher-ups pulling the BOT's governor's strings must have told him not to interfere with their personal interest in keeping the Baht strong.

 

Tourism industry... as good as ground to a halt

Hospitality sector... in dire straights as a result

Labor force... millions laid off

Agricultural sector... production down due to drought

Inflation... steep price rises across pretty much all products

Local businesses... closed down for months and only now slowly opening again

Exports across the board... in the cellar

Manufacturing sector... heavy losses due to flattening out exports

Government... questionable "democracy" and military-installed parliament and senate

Corruption... getting worse, with Thailand having dropped several points in the ICI

Aviation... Thai Airways bust and country's airports still in lockdown for incoming flights

Economic growth... predicted to be almost nil

 

And yet, the baht keeps strengthening. Can anyone explain to me why?

Wow its only taken 12 months to realize this whos paying these people but unfortunately i think they have left it too late a lot of exports have gone to other countries and tourists not coming because of this and the virus is a double whammy

The easiest way to weaken the Baht is to ask Boris to lend them a bus????

56 minutes ago, colinneil said:

WOW....they are finally waking up to the fact that keeping the baht artificially high is damaging the economy.

Most people have known that for ages, oh well better late than never.

Tell us HOW the baht is being kept "artificially high" if "most people have known that for ages".

Just a little something to back up the barstool economics.

7 minutes ago, Buddha Pist said:

Tell us HOW the baht is being kept "artificially high" if "most people have known that for ages".

Just a little something to back up the barstool economics.

Always better if you think before posting, so you dont make yourself look stupid.

Just a little something to back up bar stool economics, crazy saying that to a none drinking paraplegic.????????????

No tourists, no problem. Thai baht is still rising, Thai Currency is the god.

To The BOT.......STOP " Worrying " Just let the Baht " C-R-A-S-H "....A Lot of Problems will be Solved IMHO !!

4 minutes ago, Nong Khai Man said:

To The BOT.......STOP " Worrying " Just let the Baht " C-R-A-S-H "....A Lot of Problems will be Solved IMHO !!

And how do they crash the baht, oh yeh lets move to negative interest rates like our cousins in Japan, let’s print more money

 

oh gawd my 800,000baht in Kbank no interest and it’s basically got to stay there, what a bummer, they will probably charge me now to keep it there, just when the stock markets are going bull.

so easy right now to turn my 800000baht into a million and it probably next year is going to be worth 792000 when I probably pay a 1% fee to keep it in bank.

29 minutes ago, Nong Khai Man said:

To The BOT.......STOP " Worrying " Just let the Baht " C-R-A-S-H "....A Lot of Problems will be Solved IMHO !!

For sure.

Just like the '97 baht crash solved so many of my problems.

Bring it on.

2 hours ago, Misterwhisper said:

Tourism industry... as good as ground to a halt

Hospitality sector... in dire straights as a result

Labor force... millions laid off

Agricultural sector... production down due to drought

Inflation... steep price rises across pretty much all products

Local businesses... closed down for months and only now slowly opening again

Exports across the board... in the cellar

Manufacturing sector... heavy losses due to flattening out exports

Government... questionable "democracy" and military-installed parliament and senate

Corruption... getting worse, with Thailand having dropped several points in the ICI

Aviation... Thai Airways bust and country's airports still in lockdown for incoming flights

Economic growth... predicted to be almost nil

 

And yet, the baht keeps strengthening. Can anyone explain to me why?

Well, you seem to have covered all the positives, now, how about some negatives?

Teflon Thailand.

 

We all know the establishments that are benefiting from a high THB and they certainly won't be allowing it to fall too much. 

3 hours ago, sanuk711 said:

weaken the baht, make Thailand cheaper to visit---Gosh --what a good idea ----why didn't anyone else think of that...................

 

And just how do you advise doing that genius?

3 hours ago, colinneil said:

WOW....they are finally waking up to the fact that keeping the baht artificially high is damaging the economy.

Most people have known that for ages, oh well better late than never.

 

Colin, with respect, they haven't been keeping the baht artificially high. 

 

How do you imagine they would do that? 

 

They have been trying to stop it rising for some time. But they, in reality, have little control over the forex traders and money markets.

 

Major currencies are weak. Traders look for what they consider better currencies at the moment, As we've seen, the markets can be fickle.

 

 

The people with all the money don't want it devalued. And they seem to be the ones who make the decisions in Thailand.

3 hours ago, smedly said:

been saying it for months now - the Thai baht is being manipulated because it floats and is basically free to roam 

 

They are right in their assessment that the strength doesn't match the economic climate especially with a 2 trillion bailout loan on the cards which they will never be able to pay

 

I suggest people do some research on 1997 crash - the similarities are obvious

THB uses a managed peg to USD which means it must remain within a specific range of values, THB does not float. And there is almost nothing today that's similar to the economy of 1997 other than the fact the Baht was used on both occasions!

Edited June 1, 20206 yr by Trillian

All talk won't happen, hear this every three months. 

So many "experts" here they think it´s easy to bring a currency up or down by the government. Funny!

46 minutes ago, Trillian said:

THB uses a managed peg to USD which means it must remain within a specific range of values, THB does not float. And there is almost nothing today that's similar to the economy of 1997 other than the fact the Baht was used on both occasions!

your whole post is nonsense 

45 minutes ago, CNXexpat said:

So many "experts" here they think it´s easy to bring a currency up or down by the government. Funny!

it isn't which is why it has to be managed over time, it's all about sentiment and how big funds read those in charge - as soon as there is a change in sentiment or intentions it will tank and people in the know will get a nod first - dirty game

54 minutes ago, SteveK said:

The people with all the money don't want it devalued. And they seem to be the ones who make the decisions in Thailand.

correct

4 hours ago, colinneil said:

WOW....they are finally waking up to the fact that keeping the baht artificially high is damaging the economy.

Most people have known that for ages, oh well better late than never.

No problem. The hiso brigade and PM cronies have now invested their ill-gotten gains off shore in property etc., so time to look good to the people.... ????????????????????????????????

3 hours ago, Buddha Pist said:

Tell us HOW the baht is being kept "artificially high" if "most people have known that for ages".

Just a little something to back up the barstool economics.

Well stay at home chap.....????

1 hour ago, CNXexpat said:

So many "experts" here they think it´s easy to bring a currency up or down by the government. Funny!

Well then enlighten us all, but in a nutshell eh... ????

The baht will strengthen further on this news. Everybody knows its just lip service.