Baht Hits New 10-year High Against Dollar

[zink]

The problem here is not the devaluation of the dollar, that is mostly irrelevant except to US exporters and expats, but the devaluation of the RMB which is pegged to the dollar.

RMB is not pegged to the dollar anymore. During the last year dollar declined by about 8% compared to RMB: http://finance.yahoo.com/q/bc?s=USDCNY=X&a...&q=l&c=

Xbusman is right and you as well as my [not so] humble self are wrong Zink. inspite of the appreciation an artificial peg of CNY to USD still exists.

Peg implies a fixed exchange rate. RMB was pegged directly to dollar in the past but not anymore. Currently China still restricts movement of RMB, but the rate between RMB/USD isn't fixed.

If I remember correctly, RMB is now pegged against a basket of currencies.

Edited January 16, 2008 by zink

[cclub75]

Peg implies a fixed exchange rate. RMB was pegged directly to dollar in the past but not anymore. Currently China still restricts movement of RMB, but the rate between RMB/USD isn't fixed.

If I remember correctly, RMB is now pegged against a basket of currencies.

I think we don't have to play with words, or to abide to the official propaganda.

China does control the exchange rates of its currency.

We can call this a peg, a trick, an illusion, "floating managed", or "massaged non peg", or "referencing a basket of currencies"... whatever, it's all the same bullxxx.

Perfectly in line with their mind patterns by the way : to set things, people, targets, to control. Even with Mao they continue to believe that it's working... They do not learn. They are intoxicated by their own mystique.

Another fresh example (Bloomberg) : prices of eggs, grain, meat are increasing... Very unfortunate for a communist. Solution ? Control the prices ! Declare inflation illegal.

Exactly like our thai friends by the way.

No brain. Just plain gross shiny "asian attitude".

[gregybn]

...and no car i/we ever owned was paid for by any fiat currency

AH!... so you payed in gold... (since every currency that exists, exists by "FIAT")

I knew it Naam... you are a closet "gold bug"... just loathe to admit it!

[stumonster]

frozen chickens have been proposed before as currency in exchange for machinery

I wonder how the exchange rate between frozen chickens and the USD is behaving ?

[chrislarsson]

Some people here refer to a fixed exchange rate as stupid, bad, artificial, cheating, etc. This is not true.

Most countries did not adopt floating currencies until the 90's. Denmark, for instance, has its krona pegged to the Euro, and before that it was pegged to the German Mark.

There is still a debate whether a floating currency is the best monetary policy. And even if it works well for many countries, it does not mean that it works well for all countries. Thailand could be such a country. International trade accounts for two thirds of Thailand's GDP. A stable currency is of high importance and great fluctuations is very harmful to the economy.

For the case of China, it still has very immature financial intitutions, and letting the Yuan appreciate in a controlled manner is probably not a bad idea. If Chinese leaders were stupid or incompetent their economy would hardly have grown 10% 30 years straight

[LivinLOS]

Exactly.. I dont see the US pressuring Saudi to float its currency off its dollar peg do you ?? Yet look at the deficit the US has with Saudi !!!

A country can and should do whats good for that country.. Just because america wants chinese goods to be more expensive why should china ?? They can live with the rising raw materials costs and its american overspending (on bad credit) thats created this mess.. If people lived within thier means and didnt load thier visa card for electric buggy whips and doodads the 'sub prime crisis' would not be here. Its a simple case of fiscal irresponsibility after being offered (initially) cheap credit.

[Jai Dee]

BoT calls on exporters not to sell off USD

Governor of the Bank of Thailand (BoT) Tarisa Wattanagase (ธาริษา วัฒนเกส) says BoT is ready to prevent the baht from fluctuating too much and encourages exporters not to speculate on the currency.

Mrs Tarisa says exporters should not sell off the U.S. dollar to speculate on the baht due to the flagging economy.

The baht value this morning stays at 33.13 baht a USD. Money traders say the Thai exporters keep selling off USD while BoT is trying to intervene by buying USD to prevent the baht from appreciating.

Source: Thai National News Bureau Public Relations Department - 17 January 2008

[Maxi101]

Just got a heart attack at Yahoos currency converter.

There is something about 29 for the dollar, tell me that this is wrong?!

maxi

[cclub75]

Just got a heart attack at Yahoos currency converter.

There is something about 29 for the dollar, tell me that this is wrong?!

You can unplug the pacemaker.

Yahoo, like most of the other financial websites, shows the "off shore exchange rate" for THB.

This dual market was created after Thailand took some capital control decisions in december 2006.

But actually, the "real" (I would rather say the "on the ground exchange rate") exchange rate will be the on shore ("managed" by the BOT). Displayed here.

It's what you get (what thai banks will give you) when you send foreign currency in Thailand, or exchange notes.

Anyway, you'll find dozens of messages on TV about this issue.

[cclub75]

Governor of the Bank of Thailand (BoT) Tarisa Wattanagase (ธาริษา วัฒนเกส) says BoT is ready to prevent the baht from fluctuating too much and encourages exporters not to speculate on the currency.

Here we go again.

This stupid woman still believe that she can move around the "speculation" ghost, like a toy, to explain and justify her own flaws.

Why on earth thai businesses would like to loose money ? To please Miss Tarisa's ego ? For the sake of the nation ? One dollar next month will have less value than one dollar today in THB (unless we have... a new coup d'etat). And asian currencies will go up. It's a global trend. Period.

Plus, we shall not forget that thai businesses HAVE TO exchange the USD they receive : regulations (even though the BOT has extended the maximum delay to hold foreign currency).

And on short term, we have the FED's meeting (january 30) with a nice and big rate cut... Therefore to think that the USD can go upward is a total lunacy.

So Miss Tarisa, after this poor general Surayud (you remember the.... Prime Minister), is utterly pathetic with her cheap propaganda tools.

The truth is, this kind of statement is a tremendous proof of weakness. The Central bank of Thailand is running out of ammos ! They bought already too many dollars. They know that they can't continue to do it for a long time.

The game is over.

Edited January 17, 2008 by cclub75

[Maxi101]

China really looks bad, I wonder if they make it without desaster through the Olympic Games.

Somebody cheer me up !

Anyhow, rural people who have nothing but fields of rice and cattle, here a pig and there a chick

they don't need to worry anyway .

If I only could understand what happens once China is cracking.

All who think the Americans are landing on the belly and the Chinese are so good - I think you are wrong.

The mother of capitalism has still something up the sleeve - just watch and see.

maxi

[chrislarsson]

China really looks bad, I wonder if they make it without desaster through the Olympic Games.

Somebody cheer me up !

Ok...I can cheer you up! Except for the pollution and water shortage, most things look pretty good in China

[Otis]

Miss Tarisa and the BOT are going to have several other sleepless nights. Poor Tarisa.

If you were the Governor of the BOT, what would you do to stem the appreciation of the THB, or instead do nothing?

That's an easy one. Print money and dilute its value. Taxation without representation. Most people don't even blame the printer as the printer is gone after the multiplier effect has played itself out. BTW, am looking for a place to watch Superbowl in Thailand. Maybe Udon Thani or Pattaya. Any recommendations appreciated. Thanks all, Otis

[animatic]

And of course Ms. Terisa says:

The exporters are to blame for speculating

The central bank is doing everything perfectly

Nothing to worry about it's only a bit more than the others locally.

Yeah and pigs can fly....

Is she and incurable optimist????

Or just out of touch?

Edited January 18, 2008 by animatic

[Old Man River]

Governor of the Bank of Thailand (BoT) Tarisa Wattanagase (ธาริษา วัฒนเกส) says BoT is ready to prevent the baht from fluctuating too much and encourages exporters not to speculate on the currency.

Here we go again.

This stupid woman still believe that she can move around the "speculation" ghost, like a toy, to explain and justify her own flaws.

Why on earth thai businesses would like to loose money ? To please Miss Tarisa's ego ? For the sake of the nation ? One dollar next month will have less value than one dollar today in THB (unless we have... a new coup d'etat). And asian currencies will go up. It's a global trend. Period.

Plus, we shall not forget that thai businesses HAVE TO exchange the USD they receive : regulations (even though the BOT has extended the maximum delay to hold foreign currency).

And on short term, we have the FED's meeting (january 30) with a nice and big rate cut... Therefore to think that the USD can go upward is a total lunacy.

So Miss Tarisa, after this poor general Surayud (you remember the.... Prime Minister), is utterly pathetic with her cheap propaganda tools.

The truth is, this kind of statement is a tremendous proof of weakness. The Central bank of Thailand is running out of ammos ! They bought already too many dollars. They know that they can't continue to do it for a long time.

The game is over.

The game is over? CClub75, I thought you knew better than this. The game was never on. There is no game. As discussed by others in this thread, the BOT is way over-matched. This is an issue involving the big boys and there is nothing Thailand can do, but continually put bandages on wounds.

The appreciating THB is a political hot potato given exports are one of the main drivers of the economy. Based on this, Tarisa or whoever holds this horrible job must be seen saying the right things and doing what little can be done to stem the THB's appreciation. This means increasing public debt to fund the sale of THB and purchase of USD's, hence, the rising USD reserves.

Calling her a stupid women is over the top. She is far from stupid.

[wintermute]

China really looks bad, I wonder if they make it without desaster through the Olympic Games.

Somebody cheer me up !

Anyhow, rural people who have nothing but fields of rice and cattle, here a pig and there a chick

they don't need to worry anyway .

If I only could understand what happens once China is cracking.

All who think the Americans are landing on the belly and the Chinese are so good - I think you are wrong.

The mother of capitalism has still something up the sleeve - just watch and see.

maxi

Much more brilliant people have tried hedging against China as an emerging market and have lost their shirts. One thing you should never underestimate is an authoritarian guided market economy. Regulations can be put into place at the drop of the hat with little beauracratic resistance if the big men on top say so. They are cooling down their property boom and banking system much more efficiently than even the U.S. They have put in place a lot of regulations to keep the sort of property speculation that you see in Thailand from happening. They are valuating the CNY in tiny increments to prevent inflation. So far they are doing all the right things to prevent economic overheating and collapse. They are also reinvesting their liquidity wisely into resources and regimes that are highly favorable to the PRC.

[cclub75]

The appreciating THB is a political hot potato given exports are one of the main drivers of the economy. Based on this, Tarisa or whoever holds this horrible job must be seen saying the right things and doing what little can be done to stem the THB's appreciation. This means increasing public debt to fund the sale of THB and purchase of USD's, hence, the rising USD reserves.

Calling her a stupid women is over the top. She is far from stupid.

That's not an excuse. Saying "there is no other call, therefore they are doing their job okay". I do not agree.

You don't solve this kind of situation with words, and with the good old thai recipes from last century (my head and my fingers into the sand).

However, if she can be blamed, we shall not forget other Central banks chiefs... same breed : pathetic lyers, without imagination, and with only one obsession "the greenspan put".

We talked already about monetary integration within Asean, as one inovative solution. But we could also say :

-Big mistake to rely only exports : give fiscal incentives to big japanese makers... good for face (the hub! The hub !) but zero value actually for the state

-Improve domestic market with better competition with a real opening to foreign businesses

-review education

-Brush off labor laws for foreigners

-review completly the taxes policy (they must solve the income gap issue)

etc. etc. The list is so long. But of course, it won't happen... Mainly because of people like Tarisa. The so call "elite", more conservative than dinosaurs. And with a brain of the size of this animal...

Thailand is totally necrosed on a political and social levels...

The game is indeed over. For them at least.

[Maxi101]

China really looks bad, I wonder if they make it without desaster through the Olympic Games.

Somebody cheer me up !

Anyhow, rural people who have nothing but fields of rice and cattle, here a pig and there a chick

they don't need to worry anyway .

If I only could understand what happens once China is cracking.

All who think the Americans are landing on the belly and the Chinese are so good - I think you are wrong.

The mother of capitalism has still something up the sleeve - just watch and see.

maxi

Much more brilliant people have tried hedging against China as an emerging market and have lost their shirts. One thing you should never underestimate is an authoritarian guided market economy. Regulations can be put into place at the drop of the hat with little beauracratic resistance if the big men on top say so. They are cooling down their property boom and banking system much more efficiently than even the U.S. They have put in place a lot of regulations to keep the sort of property speculation that you see in Thailand from happening. They are valuating the CNY in tiny increments to prevent inflation. So far they are doing all the right things to prevent economic overheating and collapse. They are also reinvesting their liquidity wisely into resources and regimes that are highly favorable to the PRC.

Thank you for your reply.

Well after I have read that report on Bloomberg, it's seems that the inflation is very high and that might develop black markets which even this government might be unable to control and which might lead to a collapse like we have seen in the UDSSR or DDR.

I am no expert, just thinking - but won't go in and risk my last shirt.

maxi

[wintermute]

The appreciating THB is a political hot potato given exports are one of the main drivers of the economy. Based on this, Tarisa or whoever holds this horrible job must be seen saying the right things and doing what little can be done to stem the THB's appreciation. This means increasing public debt to fund the sale of THB and purchase of USD's, hence, the rising USD reserves.

Calling her a stupid women is over the top. She is far from stupid.

That's not an excuse. Saying "there is no other call, therefore they are doing their job okay". I do not agree.

You don't solve this kind of situation with words, and with the good old thai recipes from last century (my head and my fingers into the sand).

However, if she can be blamed, we shall not forget other Central banks chiefs... same breed : pathetic lyers, without imagination, and with only one obsession "the greenspan put".

We talked already about monetary integration within Asean, as one inovative solution. But we could also say :

-Big mistake to rely only exports : give fiscal incentives to big japanese makers... good for face (the hub! The hub !) but zero value actually for the state

-Improve domestic market with better competition with a real opening to foreign businesses

-review education

-Brush off labor laws for foreigners

-review completly the taxes policy (they must solve the income gap issue)

etc. etc. The list is so long. But of course, it won't happen... Mainly because of people like Tarisa. The so call "elite", more conservative than dinosaurs. And with a brain of the size of this animal...

Thailand is totally necrosed on a political and social levels...

The game is indeed over. For them at least.

Actually, if you give it some thought you'd realize that Tarisa is doing exactly what the elite has planned all along. They aren't stupid at all they are concerned with wealth and status preservation. Why would they allow expansion of free flowing capitalism if it would curb their family monopolies? Think about it, disrupting the status quo would be shooting themselves in the foot. Thailand is made up of a series of longstanding nepotistic family businesses and corporate ventures going back a long time. Of course they don't want foreign money or influence..it's called competition. They also don't want a population that's too educated or independent either.

As it stands they enjoy ultimate authority over a fairly uneducated population that they can tax and regulate. They can have liability free partnerships with any foreign business that wants to open up shop in Thailand..to the point where they just need a few token members on board and collect dividends. It's a sweet goose that will continue to lay golden eggs for the foreseeable future.

[Old Man River]

The appreciating THB is a political hot potato given exports are one of the main drivers of the economy. Based on this, Tarisa or whoever holds this horrible job must be seen saying the right things and doing what little can be done to stem the THB's appreciation. This means increasing public debt to fund the sale of THB and purchase of USD's, hence, the rising USD reserves.

Calling her a stupid women is over the top. She is far from stupid.

That's not an excuse. Saying "there is no other call, therefore they are doing their job okay". I do not agree.

You don't solve this kind of situation with words, and with the good old thai recipes from last century (my head and my fingers into the sand).

However, if she can be blamed, we shall not forget other Central banks chiefs... same breed : pathetic lyers, without imagination, and with only one obsession "the greenspan put".

We talked already about monetary integration within Asean, as one inovative solution. But we could also say :

-Big mistake to rely only exports : give fiscal incentives to big japanese makers... good for face (the hub! The hub !) but zero value actually for the state

-Improve domestic market with better competition with a real opening to foreign businesses

-review education

-Brush off labor laws for foreigners

-review completly the taxes policy (they must solve the income gap issue)

etc. etc. The list is so long. But of course, it won't happen... Mainly because of people like Tarisa. The so call "elite", more conservative than dinosaurs. And with a brain of the size of this animal...

Thailand is totally necrosed on a political and social levels...

The game is indeed over. For them at least.

Yes, we talked about integration and even you admitted it wasn't feasible (other countries would not be receptive). This is over and above the fact that this was the very first thing Tarisa tried and you were right, other countries weren't interested. I am not sure why you keep harping on something that you yourself admit other countries don't want to do.

On most of the rest that you say, I agree. There is a whole lot of other things they should be doing, but the "they" isn't the BOT. It is the government's job and this "they" have shown little interest.

Note, you should know better than to generalize about individual people you don't know.

[Naam]

i think the appreciation of the Baht (especially) vs. the US-Dollar is a gigantic alien conspiracy. based on a number of indications it originates from the Delta Quadrant and i wouldn't be surprised if the Borg were involved. the assumption that Osama bin-Laden has a hand in it is in my [not so] humble opinion unwarranted.

[BigSnake]

Darn Poor guys may have to go home. Oh well so be it.