Bank of Thailand Intervenes to Manage Baht's Exchange Rate

[Srikcir]

7 hours ago, webfact said:

The Bank of Thailand has confirmed its active intervention to manage the value of the baht against the US dollar

So while BoT has talked about dedollarizinIng and joining BRIC as the foundation currencies  for international transactions, it has yet to actually dedollarize. That makes sense not to do so especially if Thailand wants to be a "Currency Hub" for Southeast Asia.

Looking at the currencies of BRIC nations  (Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates), what do any of them aside from China's yuan have any trade relevance in Southeast Asia?

[chiang mai]

14 minutes ago, koolkarl said:

Bank of Thailand intervenes all the time, this is not an exception.  The baht is a controlled currency.  One cannot buy or sell as much as they like and I am referring to hundreds of thousands of dollars or millions worth.  It makes extensive use of a USD swap line  they have in place with the federal reserve printing press.  All currencies are monopoly money with nothing behind them except the sheep's confidence.  I am surprised this Ponzi scheme has lasted as long as it has. 

There are no USD swaps with the US Fed but BOT does make extensive use of USD futures. It has been estimated that the value of those future operations equal up to 50% of the FCR's which adds to the picture of currency manipulation. But with commodities such as oil priced in USD, and Thailand being a  net importer of oil, USD futures make huge sence.

[johng]

3 minutes ago, Jiggo said:

So they can go home earlier 

Well of course the best tourists  would not even leave their home (pod)  just visit virtually and send the money via a government Central Bank Digital Currency  transfer ...so quick and convenient  don't even have to get up off the sofa I'm just loving it 🤢

 

 

[ravip]

5 hours ago, chiang mai said:

You don't go to a social network forum expecting to read expert financial or economics advice, you come hear to read opinions. If you want expert advice, you're altogether in the wrong place. Try Bloomberg as a start and see where that takes you.

Extremely sorry to have burst your bubble and offended you.

The subject is here,so why hunt elsewhere. 

Good for everyone to know the correct version instead of reading thrash on these important subject. 

Where did I go wrong? Other than bursting your bubble? 

[pub2022]

6 hours ago, JonnyF said:

 

Did she really say that? 

 

Surely it's a misquote? 😃

 

Why are you surprised?

 

Haven't you heard Kamala Harris talking yet?

 

[chiang mai]

3 minutes ago, ravip said:

Extremely sorry to have burst your bubble and offended you.

The subject is here,so why hunt elsewhere. 

Good for everyone to know the correct version instead of reading thrash on these important subject. 

Where did I go wrong? Other than bursting your bubble? 

I do not understand  your question but really don't need to, so don't bother trying to explain whatever it is you're trying to ask.

[harryviking]

9 hours ago, johng said:

Tourists appreciate getting less for their holiday money with a firmer Baht as it helps them spend less 5555

LMAO! Who the heck is that man?? That is the dumbest I have ever heard! 

[rckmc]

Quote

They got it all wrong....this is not about a strong baht or any other currency....it is all about a weak dollar.

 

More to the point a deliberate weak dollar which both candidates want to have so they wont have to confront the Deep State that controls the dollar keeping it afloat the only way they know how, printing.

[rckmc]

 

Quote

 

They got it all wrong....this is not about a strong baht or any other currency....it is all about a weak dollar.

What about the pound or euro it's not just the dollar.

 

 

The central banks are both in lock step.

[sikishrory]

This is the second time I've seen this in the news in last few years.

Let me get this straight. Maybe I'm misunderstanding. 

Anytime the Thai baht begins to progress and get more valuable people freak out and step in to stifle and put a stop to it?

Isn't this something that most countries celebrate?

To me that would seem to suggest that Thailand purposefully limits itself and it's priority is more of being a cheap hub for cheap tourists rather than aspiring to progress to be a stronger country financially (eg. Singapore) ?

[ravip]

9 minutes ago, sikishrory said:

This is the second time I've seen this in the news in last few years.

Let me get this straight. Maybe I'm misunderstanding. 

Anytime the Thai baht begins to progress and get more valuable people freak out and step in to stifle and put a stop to it?

Isn't this something that most countries celebrate?

To me that would seem to suggest that Thailand purposefully limits itself and it's priority is more of being a cheap hub for cheap tourists rather than aspiring to progress to be a stronger country financially (eg. Singapore) ?

Absolutely true. But many here thinks it's bad - of course, us foreigners will get less Bahts to our currency.

[fresher]

8 hours ago, KannikaP said:

So will the price of Wine, Guinness and Volkswagens go down?

No, the profits on them will go up

[chickenslegs]

15 minutes ago, sikishrory said:

This is the second time I've seen this in the news in last few years.

Let me get this straight. Maybe I'm misunderstanding. 

Anytime the Thai baht begins to progress and get more valuable people freak out and step in to stifle and put a stop to it?

Isn't this something that most countries celebrate?

To me that would seem to suggest that Thailand purposefully limits itself and it's priority is more of being a cheap hub for cheap tourists rather than aspiring to progress to be a stronger country financially (eg. Singapore) ?

When the currency is strong, exported goods (and tourism is an export) become less attractive.

[chiang mai]

27 minutes ago, sikishrory said:

This is the second time I've seen this in the news in last few years.

Let me get this straight. Maybe I'm misunderstanding. 

Anytime the Thai baht begins to progress and get more valuable people freak out and step in to stifle and put a stop to it?

Isn't this something that most countries celebrate?

To me that would seem to suggest that Thailand purposefully limits itself and it's priority is more of being a cheap hub for cheap tourists rather than aspiring to progress to be a stronger country financially (eg. Singapore) ?

 

It's a balancing act to some degree.

 

The strength or weakness of a currency needs to match the strength of the country's  economy. There's no point having a weak currency that attracts tourists and makes exports attractive if the cost of importing oil and other goods isn't evenly matched. Conversely, a strong currency that makes imports relatively inexpensive is pointless unless exports or the remainder of the economic output can function well at the same level. 

 

Thailand's issue is that it likes a weak Baht because it aids exports and tourism whilst minimising imports because of the high costs. That leaves them with a current account surplus and a balance of trade surplus, which means a stronger Baht. If the country were to open up and import more, the trade surplus would evaporate and the currency would cease to strengthen so much. This is what the US Fed refers to when it accuses Thailand of currency manipulation which primarily is really a trade issue, not an exchange rate issue.

[ukrules]

10 hours ago, webfact said:

However, Ms. Chayawadee emphasized that the stronger baht is unlikely to impact the tourism sector adversely in the final quarter of this year. "International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand," she said.

 

Absolute insanity from someone who should be fired immediately.

[Lamphen]

Is she suffering from oxygen deprivation?

[sikishrory]

Great explanations. Thank you

[Presnock]

9 hours ago, JonnyF said:

 

Did she really say that? 

 

Surely it's a misquote? 😃

I can blv that she did say that and that she believes it is correct,,,not a clue as to western thinking,

[black tabby12345]

BOT's  intervention to lower THB.

It means the cental bank sold their currency THB in the currency market.

Does anyone ever know the rough amount they actually sold?

 

According to yesterday's BKK Post, amount of Thailand's Foreign Exchange Reserve in August this year was:$262 billion. 

 

Bangkok Post - Central bank intervenes in baht's exchange rate

 

That is one of the reasons behind strong Bahts.

 

Regarding foreign exchange reserve, This kingdom is ranked 15th of  the world(in July 31 this year).

US was the No.13.

 

Edited 6 hours ago by black tabby12345

[chiang mai]

1 minute ago, black tabby12345 said:

BOT's  intervention to lower THB.

It means the cental bank sold their currency THB in the currency market.

Does anyone ever know the rough amount they actually sold?

 

According to yesterday's BKK Post, amount of Thailand's Foreign Exchange Reserve in August this year was:$262 billion. 

That is one of the reasons behind strong Bahts.

 

Bangkok Post - Central bank intervenes in baht's exchange rate

 

This kingdom is ranked 15th of  the world(in July 31 this year).

US was the No.13.

 

The reserves are held in lots of different currencies and gold etc etc but are accounted for in USD. That means the value of the reserves changes in line with the exchange rates. So I wouldn't get too hung up on the headline figure which can change for several reasons..

[Bluetongue]

I’ve been here or coming here for 35 years. I’m an Aussie. For the first few years the USD was pegged at 25, the Aussie was usually stable at 20. Then mid 90s things started to change, the lowest I saw the Aud was 13 something not sure about the USD. Then when we moved permanently I was flabbergasted to get 32 something for AUD a large amount. The US was well over 40 from memory. That was about 2009.  It’s really been a long slow slide since (except for Covid of course). 

[thaiowl]

I remember in 1997 when the BOT tried unsuccessfully to support the Baht, which almost depleted Thailand's official reserves which fell from USD39bn in Feb 1997 to USD3bn at the end of May. As a result, the BOT was forced to float the Baht and Thailand had to be bailed out by the IMF to the tune of USD17bn.

[thecyclist]

12 hours ago, johng said:

Tourists appreciate getting less for their holiday money with a firmer Baht as it helps them spend less 5555

Thai logic at its best. 

[chiang mai]

6 hours ago, Ben Zioner said:

I guess she hates selling off foreign currency reserves to prop up the baht.. So she will just say anything to justify a lack of effective action.

 

Or, maybe these foreign currency reserves are more limited than what we thought.

There's a clue in the article when it says "the reserves have benefited from the interventions and the  depreciation of the Dollar". The reserves are held in foreign currencies and Baht, most of which have increased in value as USD has depreciated.  The reserves are only accounted for in USD, not held in USD plus that accounting only takes place at month end. A fall from 37 to 32 will mean a substantial increase in USD terms. It isn't that more reserves have been earned, only that the exchange rate has increased the Dollar value of the reserves.

https://www.bot.or.th/en/statistics/sdds-reserve-template.html

 

[CallumWK]

12 minutes ago, thaiowl said:

I remember in 1997 when the BOT tried unsuccessfully to support the Baht, which almost depleted Thailand's official reserves which fell from USD39bn in Feb 1997 to USD3bn at the end of May. As a result, the BOT was forced to float the Baht and Thailand had to be bailed out by the IMF to the tune of USD17bn.

 

Only difference with 1997 is that they were supporting the baht, while this time they are doing the opposite.

[chiang mai]

Just now, CallumWK said:

 

Only difference with 1997 is that they were supporting the baht, while this time they are doing the opposite.

There's no comparison between 1997 and today. The main reason is that the Foreign Currency Reserves are liquid and not tied up in long dated investments. The second important reason is the government has almost no foreign currency loans plus the Baht is not hard pegged against USD. 

[nong38]

Monitoring means we do not do anything and hope its better tomorrow! Anyone know what to do ? It was not covered in the training.

[Wrwest]

13 hours ago, johng said:

Tourists appreciate getting less for their holiday money with a firmer Baht as it helps them spend less 5555

Just my speculation but could he had been trying to impart the idea of a "stable baht" to allow for tourist budget planning?

[Paul333]

What was that. Unlikely to effect tourism. Lmao. My plan was 3 weeks in November, now it's 7 days due to hotels 3 times the price. Might be the same money in Hotels but the local businesses miss out on the food and entertainment. Way to go Thailand your country will back to the year 2000 before you know it.

[Paul333]

12 hours ago, ozz1 said:

Probably a little too late for tourists planning their holidays here Vietnam is loving this

I live in Vietnam and now coming for 7 days in November instead of 21 days. Hotel prices have tripped. If it was not for seeing friends I wouldn't come at all.