Prawit stuns the cabinet demanding a ฿35 to the dollar rate and action from the Finance Minister

[webfact]

Acting Prime Minister Prawit Wongsuwan (centre) shocked the cabinet on Tuesday by demanding action by the Minister of Finance Arkhom Termpittayapaisith in relation to the depreciating baht.

 

by manager

Baht’s depreciation is now being driven by a wider difference between interest rates in the United States and Thailand which had gone beyond a critical point at 150 to 175 basis points even before Wednesday’s rise and which could see it grow wider by up to a further 175 basis points by the end of this year if the Federal Reserve maintains its hawkish stance and with projected Thai interest rate rises. The situation ultimately may lead to the Bank of Thailand being forced to raise interest rates higher and faster than it wants given the capital movement we are now witnessing thus supporting the acting PM’s call for action.

Acting Prime Minister Prawit Wongsuwan surprised the cabinet on Tuesday when he warned that the government could not again allow the baht to trade at ฿50 against the US dollar. He called on Minister of Finance Arkhom Termpittayapaisith to work with the Bank of Thailand and Governor Sethaput Suthiwartnarueput to bring about a rate of ฿35 to the US currency. On Wednesday, the baht fell below the ฿37 barrier for the first time since October 2006. The intervention of General Prawit is reported to have drawn a mirthful response from ministers around the cabinet table and was later qualified by a press briefing from temporary government spokesman Anucha Burapachaisri.

 

Despite growing pressure to raise interest rates faster in Thailand, Bank of Thailand Governor Mr Sethaput, whose role is an independent one concerned primarily with financial stability and inflation, has signalled consistently that the bank will pursue its more gradual approach to rising interest rates so as not to torpedo the country’s emerging growth which the Ministry of Finance itself sees as essential this year.

 

Full story: https://www.thaiexaminer.com/thai-news-foreigners/2022/09/21/acting-pm-prawit-targets-35-baht-to-dollar-rate/

 

-- © Copyright Thai Examiner 2022-09-22

 

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[John Drake]

Or Thailand could promote this exchange rate with American tourists. Oops. Forgot. They want to focus on Russians instead.

[arick]

Is he planning a long trip abroad. 

[daveAustin]

Deary me. What a donkey. Stick to checkers mate!

[Fairynuff]

An overvalued USD helps nobody but dollar carrying tourists and expats. In the short to medium term it causes more harm than good to the world economy.

Edited September 21, 2022 by Fairynuff

[madmitch]

Has he actually looked at any other currencies, many of which have fallen further against the dollar than the baht has? 

[sammieuk1]

He must be holding euros and pounds with a massive touch of swiss francs ????

[ozz1]

Isn't that currency manipulation they should look at other currencies besides the US   he is making desicions I thought he was the just care taker pm

[ftpjtm]

Rolex prices are through the roof!

[VinnieK]

Weak  (or strong baht) have both pros and cons.

A weak baht is good for exports and tourism but bad for foreign debt servicing.

So ,I believe Prawit's statement was out of concern that govt and private companies will have to pay more for debt servicing. 

Anyone else sense an economic storm coming btw?

[jabis]

By all means push all the federal foreign reserves into propping the baht, and then watch the system collapse 

[Jonathan Swift]

53 minutes ago, Fairynuff said:

An overvalued USD helps nobody but dollar carrying tourists and expats. In the short to medium term it causes more harm than good to the world economy.

Interfering with the free market carries much worse potential consequences. Exchange rates go up and down in cycles. That's how it works. By the way, the definition of "overvalued USD" - is that YOUR definition? Did you write the book on world economics? If so I'd like to read it and become enlightened like you. And BTW, haven't I been hearing about Thailand wanting the tourists' dollars back? So if this helps "dollar carrying tourists" how is it not a good thing? They'll be spending more and dumping it into the Thai economy anyway. Don't answer, that was a rhetorical question. 

[Jonathan Swift]

It seems the new prime minister may be worse than the last one. Is this his idea of economic common sense, or is he just posing for effect? 

[khunjeff]

22 minutes ago, ozz1 said:

Isn't that currency manipulation

Yes, and he doesn't seem to realize that it's not in Thailand's interests to make public pronouncements that could lead to the country being declared a currency manipulator by other countries - but he's so used to giving orders to subordinates that he can't help himself. 

[Reigntax]

46 minutes ago, sammieuk1 said:

He must be holding euros and pounds with a massive touch of swiss francs ????

Something that originated from the Swiss anyway !!

Edited September 21, 2022 by Reigntax

[Geoffggi]

1 hour ago, arick said:

Is he planning a long trip abroad. 

Maybe his money is ...................LOL

[robsamui]

1 hour ago, madmitch said:

Has he actually looked at any other currencies, many of which have fallen further against the dollar than the baht has? 

Is the buffoon even aware that there are more nations out there than Thailand and the USA?

[tandor]

43 minutes ago, ftpjtm said:

Rolex prices are through the roof!

Time will tell.

[Andycoops]

Clearly Jaba the Hut hasn't a clue about how the global finance industry works, or is his concern the increased price of imports of ingredients for his pies.

Another army Muppet who doesn't have the intellectual capacity to run a bath.

[RichardColeman]

Before doing anything internally and wasting his the country's money he should have  a word with dementia Joe, as the US dollar is surging not because what Thailand is doing but due to Biden's insane throw away money policies. $ will be high for 18-24 months now, take the hit and the export gain. You start trying to keep up with Joe and Thailand will go broke.

 

He should try having my pound  - down both against the dollar AND the baht. Making the baht stronger due to one currency fluctuation is madness

[Srikcir]

9 minutes ago, RichardColeman said:

Before doing anything internally and wasting his the country's money he should have  a word with dementia Joe, as the US dollar is surging not because what Thailand is doing but due to Biden's insane throw away money policies. $ will be high for 18-24 months now, take the hit and the export gain. You start trying to keep up with Joe and Thailand will go broke.

 

He should try having my pound  - down both against the dollar AND the baht. Making the baht stronger due to one currency fluctuation is madness

Maybe you should consider American citizenship and reap the rewards of progressive leadership.

[itsari]

46 minutes ago, Jonathan Swift said:

Interfering with the free market carries much worse potential consequences. Exchange rates go up and down in cycles. That's how it works. By the way, the definition of "overvalued USD" - is that YOUR definition? Did you write the book on world economics? If so I'd like to read it and become enlightened like you. And BTW, haven't I been hearing about Thailand wanting the tourists' dollars back? So if this helps "dollar carrying tourists" how is it not a good thing? They'll be spending more and dumping it into the Thai economy anyway. Don't answer, that was a rhetorical question. 

By the way the strength of the US Dollar is causing many problems around the world and not just Thailand .

The free market is creating problems . Intervention is needed before a collapse occurs . The cycle at the moment is a runaway train .

Sri Lanka was just a beginning .

[mania]

3 hours ago, webfact said:

Prawit stuns the cabinet demanding a ฿35 to the dollar rate and action from the Finance Minister

He then turned around & demanded Health minister to find a cure for cancer NOW !

[2baht]

35 minutes ago, robsamui said:

Is the buffoon even aware that there are more nations out there than Thailand and the USA?

Prawit's response............Oh, are there? ????............Obviously there's something in it for him!

[ThailandRyan]

The man has definitely decided to blame his losses on just one currency. I wonder how Thailand and others would fare if they also raised rates like the US Fed is doing to control it's runaway inflation.  in the US life sure is interesting, but here in the LOS, well its comical. 

 

Prawit....well his proposal is nothing short of true currency manipulation, unless he meant it to be done by raising interest rates here, which would kill the country on a larger scale.  I forsee another meltdown occurring....

Edited September 21, 2022 by ThailandRyan

[mancub]

1 hour ago, Jonathan Swift said:

They'll be spending more and dumping it into the Thai economy

No. just means they'll get more "bang for their buck" and won't need to bring as much into the country.

[phetphet]

1 hour ago, ftpjtm said:

Rolex prices are through the roof!

Adding to his collection must be getting expensive.

[phetphet]

3 hours ago, John Drake said:

They want to focus on Russians instead.

They'll be getting plenty of them soon. Mainly military reservists flying out of Russia to avoid conscription to fight in Ukraine.

[ThailandRyan]

4 minutes ago, phetphet said:

Adding to his collection must be getting expensive.

How? When he gets them free from dead friends.. .

[Swampy999]

It's part of his cunning plan, drop the Baht to dollar, purchase those much needed F-35 fighters and a few high end time pieces from the Waterbury Clock Company and pay in Baht then over inflate the price of the Baht again, as long as it doesn't go pop who's going to notice ????????