Economists Split On Whether Thailand Will Keep Rate Unchanged

[bingobongo]

Economists Split on Whether Thailand Will Keep Rate Unchanged

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

[Irene]

Economists Split on Whether Thailand Will Keep Rate Unchanged

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

I would be surprised if the rate is not reduced further given the present strengthening of the baht. The unimaginable baht strength below 30 (offshore) has now become a reality. They are all now groping for anything to stop its strength in order to save their export industry. If the onshore hits 30, then that would be a crisis. Therefore, the lowering down by another 25 basis points would make sense and help.

[cclub75]

If the onshore hits 30, then that would be a crisis. Therefore, the lowering down by another 25 basis points would make sense and help.

Misjudgement.

They have cut 4 times since january. With absolutly no effect, whatsoever.

You try to apply a traditional pattern to an unconventional situation.

Foreigners don't put money in Thailand to enjoy a differential in interest rates. They have AUD, NZD etc... if they are looking for high yield currency.

Therefore, cutting interest rates with -0.25 or 0.50 would not have a decisive effect.

The only solution -from a theorical point of view- would be the japanese scheme: interest rates at zero in order to create a THB carry trade movement. People would borrow in THB, then sell them against any other currency, leading to a depression of the THB value.

It would add more liquidity to an already insane liquidity situation in the world. But mai pen rai.

[bingobongo]

how nice, first the boys in green trample over civil rights, and now they want to interfere with monetary policy.....well done junta, well done

Thailand's military-backed govt urges central bank to cut rates amid rising baht

http://www.fxstreet.com/news/forex-news/ar...84-5fe630d5406e

[samran]

medling in monetary policy isn't just for junta's.

Give a populist politician half a chance and they'd do the same.

But, if you take the viewpoint that the country is going down the toilet economically, then an interest rate cut may actually be needed. So the junta can urge all they like. There is very little for them to gain out it it is there?

If you are arguing that there shouldn't be a rate cut, then you must be implying that things are better than you like to admit.

Now the latter wouldn't be any fun for posts on TV would it???

[Jimjim]

Ditto Samran. They're the government now so don't you accept them to make at least some effort? Sheesh.

[bingobongo]

Ditto Samran. They're the government now so don't you accept them to make at least some effort? Sheesh.

sheesh? so do you accept "them" as the LEGITIMATE government? the "glorious" coup has made the economy a mess, and their meddling ever since has not enhanced the "gross happiness index"

Edited July 17, 2007 by bingobongo

[sfokevin]

"They're the government now so don't you accept them to make at least some effort? Sheesh."

I would think the Military Junta likes the baht right where it is...

Think of the discount on all those new helicopters, fighter jets and tanks

Edited July 17, 2007 by sfokevin

[SiamSquare123]

why cant they peg the baht?

[Mid]

Thailand Cuts Benchmark Rate for Fifth Time to Boost Growth

By Anuchit Nguyen

July 18 (Bloomberg) -- Thailand's central bank cut its benchmark interest rate for the fifth consecutive time this year to spur the economy.

The Bank of Thailand reduced its one-day bond repurchase rate to 3.25 percent from 3.5 percent. The decision was expected by seven of 17 economists surveyed by Bloomberg News. Nine of the economists predicted the rate to be kept unchanged, while one forecast a half-percentage point reduction.

[samran]

Ditto Samran. They're the government now so don't you accept them to make at least some effort? Sheesh.

sheesh? so do you accept "them" as the LEGITIMATE government? the "glorious" coup has made the economy a mess, and their meddling ever since has not enhanced the "gross happiness index"

it takes longer than a year and more than a coup to sabotage an economy.

[palm]

If you are arguing that there shouldn't be a rate cut, then you must be implying that things are better than you like to admit.

Now the latter wouldn't be any fun for posts on TV would it???

Well spotted and correct on both counts