Weakening dollar raises questions on baht's direction

[Traubert]

It seems that Biden being confirmed hasn't changed a thing. Another 200k/3k infected/dead wont stop the malaise.  Figures as yesterday.

[JimGant]

19 hours ago, Leaver said:

Thailand is manipulating it's currency.

 

https://thethaiger.com/hot-news/economy/us-treasury-mulls-putting-thailand-on-its-watchlist-as-a-currency-manipulator

OK, listen up. Here's the definition of currency manipulation. It originated with the US Treasury and it is strictly related to giving an unfair trading advantage:

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Currency manipulation is a policy used by governments and central banks of some of America's largest trading partners to artificially lower the value of their currency (in turn lowering the cost of their exports) to gain an unfair competitive advantage.

Note:  It is strictly about DEvaluing the currency, to make one's exports cheaper relative to the imports of one's trading partners. It is NOT about increasing the value of one's currency so that the high so's can buy cheaper dollars.

 

Putting Thailand on a list of currency manipulators, because their trade deficit exceeded an arbitrary number of $20Billion, is zonkers when viewed in isolation, particularly when an appreciating currency completely negates that currency manipulation is occurring. But, the Trump government, of wacko non professionals, will soon be gone, albeit maybe in strait jackets -- and maybe the manipulation label will be viewed more appropriately. This response to the quoted article, above, says it all:

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Veerathai also mentioned that the baht’s progress against the USD in 2019 should show that “no one should consider Thailand as one that has tried to manipulate” the currency to gain an export advantage.

Why the $20B gap? Partly due to import demand down because of the weak Thai economy. And on the export side -- maybe whatever Thailand is exporting is worth an 8% price increase. Or maybe Thai vendors lowered their prices to stay competitive, and in the process increased volume exported. Who knows. But whatever, currency manipulation, by pure definition, has not occurred.

[Isaan sailor]

China sold US Treasuries.  Now why did Baht rise on this?  Did Thailand’s USD reserves rise? 

[Agusts]

You guys are the believers, great for you, foreign investment are pouring into Thailand economy (in such a great scale), hence baht is so strong, yeah, right....! ????????

 

[Leaver]

On 12/17/2020 at 5:30 PM, JimGant said:

Note:  It is strictly about DEvaluing the currency, to make one's exports cheaper relative to the imports of one's trading partners. It is NOT about increasing the value of one's currency so that the high so's can buy cheaper dollars.

I accept the "official" definition of what a currency manipulator is, that is, devaluing a currency, however, Thailand is still under military rule, basically, a dictatorship, and these hiso's will do whatever they want with the Thai baht to enrich themselves, both within Thailand, and offshore.  

 

[Agusts]

Another reason is to show strength of the economy and status here, with covid19 problems worldwide and certain students on the streets - economic & political instability... , and you wonder why investments and investors actually not fleeing Thai market, and baht should be collapsing right now, so maybe that's a worry, hence bring it under 30 to show we are fine, in fact better than fine....!!! ? Also if you're thinking about pulling your fund right now, thing again, you lose like 10% if you brought it in say at 33... ????

 

It's not just economical - devaluing, it's also political ...

 

(By the way, personally I don't think the hi-so have much say or role in this at all, it's far more complex than that..., although they enjoy the ride ...)

 

[Leaver]

On 12/20/2020 at 9:46 PM, Agusts said:

Also if you're thinking about pulling your fund right now, thing again, you lose like 10% if you brought it in say at 33...

Or, leave it in, and you risk losing more.  

[Agusts]

46 minutes ago, Leaver said:

Or, leave it in, and you risk losing more.  

 

Yep, you never know, but looking at last 10 or so years they seem to like 30 or about as the bottom, then move it a up a bit when they feel like it...., but never say never, maybe next year this time it's 25...! ????????

[Leaver]

6 minutes ago, Agusts said:

 

Yep, you never know, but looking at last 10 or so years they seem to like 30 or about as the bottom, then move it a up a bit when they feel like it...., but never say never, maybe next year this time it's 25...! ????????

 

No bother to me.  I keep my assets in my home country and only transfer over month living expenses.  I have nothing in Thailand I can't walk away from.