Thai Central Bank Relaxes Foreign Currency Regulations

[george]

Thai central bank relaxes foreign currency regulations

BANGKOK: -- The Bank of Thailand has extended the allowable period of time for each individual to successively hold US currency from 120 days maximum to 360 days in order to cool down the baht appreciation and the daily fluctuations in the money and stock markets caused by hectic inflows and outflows of foreign currencies.

Suchada Kirakul, BoT assistant governor, said on Tuesday the move was made to keep the baht from rising too high and to contain the heavy fluctuations of foreign currencies in the local money and capital markets.

The extension for the US dollar holding was effective on Monday.

The central bank's representatives are scheduled to brief financial firms and institutions about the latest currency-handling measure next Monday (Feb 11), she said.

She said the central bank anticipated the baht would not rise too high against the US dollar if investors and business firms were allowed to hold dollars long enough to make optimum use of the otherwise volatile currencies.

The baht, which recently hit a record high against the US dollar in a decade, is expected to gradually drop against the US dollar.

Simultaneously, exporters are expected to benefit considerably from a more stable currency under the measure, she said.

Besides, listed securities firms will be allowed to shift more venture capital onto various projects in which they might co-invest with their parent companies overseas.

Because of this, the listed securities firms are allowed to put down a maximum of $100 million in their joint investment projects in a year.

In addition, the listed firms are allowed to borrow a maximum of US$100 million from their parent firms overseas in a year. That represents a sharp increase from an earlier limit of $50 million.

Individuals are also allowed to buy $5 million maximum in property overseas in a year.

--TNA 2008-02-06

[Martin]

Anything that damps down volatility is a good thing these days.

But the baht will only drop against the dollar if the American Fed and Government stop weakening the dollar and there is no sign of that happening.

The dose of reality in the form of a big increase in the interest rate that needs to be administered to the American populace can't

be expected to be administered during the run-up to a Presidential Election, unfortunately.

[thaigene2]

Anything that damps down volatility is a good thing these days.

But the baht will only drop against the dollar if the American Fed and Government stop weakening the dollar and there is no sign of that happening.

The dose of reality in the form of a big increase in the interest rate that needs to be administered to the American populace can't

be expected to be administered during the run-up to a Presidential Election, unfortunately.

Yes I'm almost certain (well 80%) that the weakening USD is a deliberate policy of the Bush Admin and the US Fed to counter the fact that Americans have spent all their savings and are now, effectively borrowing - well - Yuan!!. Watch out China, here they come - lead paint in toys, poisoned fish balls in Japan, it's all a campaign to get ya...before you cash in on them !! And they're lining up their allies (like Japan), etc....

This is going to get REALLY UGLY - you watch the next 24 months..esp if a Republican get the White House (but either way I reckon).

Edited February 6, 2008 by thaigene2

[Scott]

I am not the brightest person when it comes to these matters, so I have a question. I am getting about us$20,000, which will be sent by cashier's check to me in Thailand. Should I hold it in US$ or change it to baht, or a combination. I don't really need the money for immediate spending.

[Seneque]

I am not the brightest person when it comes to these matters, so I have a question. I am getting about us$20,000, which will be sent by cashier's check to me in Thailand. Should I hold it in US$ or change it to baht, or a combination. I don't really need the money for immediate spending.

The USD might have a slight short term rebound but the long run looks bearish ... If you're going to spend the USD in thailand better cash in for Thai Baht (even though I don't see the baht going way up against the USD ... exporters of non added value products are hurting as I write)

[Scott]

Thanks, that was initial thought, but it's always good to get input from others.

[foolforlove]

Thanks, that was initial thought, but it's always good to get input from others.

the dollar is only going to keep getting worse. either convert it to baht. or if you are uncomfortable with that, convert to a (more) stable currency like euros.

[maxcrc]

You are so terrible wrong, my friend.Don t do that.

Euro is set to downgrade sharply. Why do you want to lose money to buy a currency which is just start to get weaker ?

Euro strenght has come to its peak and US $ will start to recover and in a matter of 4-5 years it will can get close to what it was few years ago.

Buying euros now would be the most stupid thing in the world...I bought euros in July 2002 and I have made lots of profit. Now I am selling them again.

Asian currencies including thai baht are set to get tremendous gains against euro and pound.

In november when it were 2.11 $ for 1 pound,I reccomended everybody in this forum to sell their pounds immediately and I received mountains of offenses.

Just after I said that, pound started to fall and it will fall more and more as low as 1.70 $ for 1 pound.

Now I strongly reccomend to sell the euros too,whatever for asian currencies and even the buck.

Why don t you guys understand that the only way to make a tremendous profit is buying something when it is at its lowest point ??

Every cent it will rise will be yours ! pure profit.

in 2002 it was time to buy euros (as I did), now it is just the opposite. Buying something when it is at its peak can only give you losses.

About asian currencies, as I said, their strenght will follow for awhile, as long as China will revaluate its yuan and yen will rally high due to uncertainly in the stocks, all other currencies will move "in line" (not exactly in line, but in the same direction).

After the Olympic Games in Beijing, it will be important to see the chinese policy, if they think yuan revaluation will be enough (to cool inflation) or not.That decision will affect the trend of all asian currencies. Also Japanese economy will be important,since yen movements also affect other asian currencies movements.

Edited February 8, 2008 by maxcrc