Govt Not Yet Ready To Scrap Foreign Reserve Requirement

[george]

Finance minister needs more BoT data on capital controls

BANGKOK: -- Deputy Prime Minister and Finance Minister Surapong Suebwonglee has told members of the House of Representatives that he is awaiting additional information from the Bank of Thailand (BoT) concerning the 30 per cent foreign reserve requirement.

Speaking to Lower House members while the government presented its policy package yesterday, Mr. Surapong said the information which he sought from the central bank was vital for making the government's final decision on scrapping the foreign reserve requirement, imposed by BoT since December 2006.

If implemented, ending capital controls must offer more benefits than disadvantages, he said, adding that it was impossible for him to disclose to the public in detail because it would allow speculation in the money market.

This stringent measure has been eased to a certain extent for foreign inflows which would invest on the Thai stock market and debt instruments, he said. But many sectors have voiced concerns that if the requirement is scrapped, a massive inflows would be seen and affect the Thai currency, the baht, stability.

However, some sectors have supported the idea of rescinding it as soon as possible because it has affected local and foreign investors confidence, Mr. Surapong said.

Different ideas are being considered, Mr. Surapong said, adding that his ministry must wait for additional information from the central bank.

Expressing dissatisfaction with the finance minister's explanation, Korn Chatikavanij, deputy secretary-general of the opposition Democrat Party, said the minister spent only six minutes on the issue which is considered crucial to the national economy.

Mr. Korn said the government's economic policy which would require trillions of baht on mega-projects had worried several sectors in the country with local borrowings still insufficient for the planned investment.

--The Nation 2008-02-21

[cclub75]

BANGKOK: -- Deputy Prime Minister and Finance Minister Surapong Suebwonglee has told members of the House of Representatives that he is awaiting additional information from the Bank of Thailand (BoT) concerning the 30 per cent foreign reserve requirement.

adding that it was impossible for him to disclose to the public in detail because it would allow speculation in the money market.

The circus about the "datas" started 2 weeks ago, before the first meeting BOT/MOF. The BOT said at that time that it had "secret datas" to give to the government.

So I guess, the bird with the secret message got lost in Bangkok'sky.

Therefore they need more time to train a new bird (let's call him Nok 2), teach him to respect lights on the road, and to be polite (it's important).

A little bit messy as credibility is concerned. But very understandable.

[BigSnake]

Might as well it don't seem to be doing much to control the all mighty strong baht these days.

[Seneque]

Give them time to speculate on the Baht and only then ... they will do something for the public at large .... the baht on the international market is now at the same level as inland ... so what is stopping them ? ... as I always said, the (too) strong baht will cost (is costing) Thailand exporters ... and then what ?

[cclub75]

Give them time to speculate on the Baht and only then ... they will do something for the public at large .... the baht on the international market is now at the same level as inland ... so what is stopping them ? ... as I always said, the (too) strong baht will cost (is costing) Thailand exporters ... and then what ?

I think the reason is much simpler : they don't have a clue.

They're waiting for the FED... Waiting for the Chinese... hoping that everything will be fine in the next months... Hoping that 2+2 = 5, that... well they don't know exactly.

To scrap or not to scrap the 30 % reserve ? Nobody knows.

They're afraid of their own shadow. Tarisa, the "boss" of the BOT is still totally depressed by what she's been through when they slamed the capital controls in december 2006 (she lost face, credibility and everything else).

Meanwhile, the new government, exactly like the previous, is less military but more stupid : a bunch of godfathers without any education, leaded by an animal.

Again, what do you expect them to do ?

Therefore, they have only one solution left : wait and see. And hope.

They wait for the "secret datas". And for that matter they will wait long time.

[thaigene2]

Give them time to speculate on the Baht and only then ... they will do something for the public at large .... the baht on the international market is now at the same level as inland ... so what is stopping them ? ... as I always said, the (too) strong baht will cost (is costing) Thailand exporters ... and then what ?

I think the reason is much simpler : they don't have a clue.

They're waiting for the FED... Waiting for the Chinese... hoping that everything will be fine in the next months... Hoping that 2+2 = 5, that... well they don't know exactly.

To scrap or not to scrap the 30 % reserve ? Nobody knows.

They're afraid of their own shadow. Tarisa, the "boss" of the BOT is still totally depressed by what she's been through when they slamed the capital controls in december 2006 (she lost face, credibility and everything else).

Meanwhile, the new government, exactly like the previous, is less military but more stupid : a bunch of godfathers without any education, leaded by an animal.

Again, what do you expect them to do ?

Therefore, they have only one solution left : wait and see. And hope.

They wait for the "secret datas". And for that matter they will wait long time.

Yep - I think that't about it. But it's more about the fact the Chinese your talking about are actually the THAI-Chinese. Their businesses will suffer EITHER way - keep controls or lose them. "Make your bed and lie in it" as we used to say.. At least they're not blaming the farnangs yet - of course that's the next step..