Bot Selling Dollars To Stall Dollar Growth

[ray23]

"Selling dollars to stall dollar growth" . Sorry I just don't get this. Inflation is a huge problem, oil seems to be the main culprit in infaltion. As the dollar get stronger the cost of oil goes down. Why would anyone want to stall it.

Now if you purchased oil in baht I could understand it, but the dollar is used to purchase oil.

What am I missing?

I wonder how long the BOT can continue down this road they have already been on it for sometime. When is the money supposed to hit the country to stimulate the economy. Or is that smoke screen because of inflation.

Thai Baht Rises From 1-Month Low on Central Bank; Bonds Decline

By Shanthy Nambiar

Aug. 7 (Bloomberg) -- Thailand's baht rebounded from a one- month low on speculation the central bank will support the currency. Government bonds fell.

The currency reversed a decline after touching 33.76 a dollar, the weakest since July 9, as Amara Sriphayak, a central bank official, said last week that the Bank of Thailand is ``taking care'' of the currency. The baht has dropped 0.5 percent this quarter, the fourth-biggest decliner among Asia's 10 most-traded currencies.

``The Bank of Thailand has been in the market quite consistently,'' said Vishnu VarathThai Baht Rises From 1-Month Low on Central Bank; Bonds Decline

By Shanthy Nambiar

Aug. 7 (Bloomberg) -- Thailand's baht rebounded from a one- month low on speculation the central bank will support the currency. Government bonds fell.

The currency reversed a decline after touching 33.76 a dollar, the weakest since July 9, as Amara Sriphayak, a central bank official, said last week that the Bank of Thailand is ``taking care'' of the currency. The baht has dropped 0.5 percent this quarter, the fourth-biggest decliner among Asia's 10 most-traded currencies.

``The Bank of Thailand has been in the market quite consistently,'' said Vishnu Varathan, an economist at Forecast Singapore Pte. The central bank, has been ``selling dollars to stall the dollar rally. We are seeing ongoing outflows,'' he said.

The baht traded at 33.60 per dollar as of 4:35 p.m. in Bangkok, little changed from yesterday, according to data compiled by Bloomberg.

The Thai currency has weakened about 5.5 percent in the past three months on concern global funds will sell their local holdings amid political turmoil.

Allegations that Prime Minister Samak Sundaravej is a proxy for former leader Thaksin Shinawatra have led to street protests that called for the premier to quit. Global funds sold $81.5 million more Thai stocks than they bought this week, according to data compiled by Bloomberg.

Ten-year bonds declined. The yield on the 5.125 percent note due March 2018 rose 5.4 basis points to 4.963 percent, according to the Thai Bond Market Association. The price fell 0.41518, or 4.1 baht per 1,000 baht face amount, to 101.1997.

To contact the reporter for this story: Shanthy Nambiar in Bangkok at [email protected].

Last Updated: August 7, 2008 05:45 EDT an, an economist at Forecast Singapore Pte. The central bank, has been ``selling dollars to stall the dollar rally. We are seeing ongoing outflows,'' he said.

The baht traded at 33.60 per dollar as of 4:35 p.m. in Bangkok, little changed from yesterday, according to data compiled by Bloomberg.

The Thai currency has weakened about 5.5 percent in the past three months on concern global funds will sell their local holdings amid political turmoil.

Allegations that Prime Minister Samak Sundaravej is a proxy for former leader Thaksin Shinawatra have led to street protests that called for the premier to quit. Global funds sold $81.5 million more Thai stocks than they bought this week, according to data compiled by Bloomberg.

Ten-year bonds declined. The yield on the 5.125 percent note due March 2018 rose 5.4 basis points to 4.963 percent, according to the Thai Bond Market Association. The price fell 0.41518, or 4.1 baht per 1,000 baht face amount, to 101.1997.

To contact the reporter for this story: Shanthy Nambiar in Bangkok at [email protected].

Last Updated: August 7, 2008 05:45 EDT

[xbusman]

They are desperate to keep the baht artificially strong against the dollar. A strong currency reduces the cost of imports (oil included) and impacts inflation at home. A strong currency might kill the exports, has not seemed to have a dramatic effect...yet.... but they are far past worrying about GDP. This is about exactly where they were in 1997, working hard to support a currency against the world market. Could get interesting.

[britmaveric]

Thai logic at work - or lack of it.

[wasabi]

stall it all the way back to 50 baby.

[cloudhopper]

Well they seem to have a fairly large amount of $ currency reserves and I'm not sure that this isn't a bad strategy. What else should they do with it? Buying US treasury notes doesn't seem all that wise in the face of the massive US debt that only looks to increase dramatically in the near future. I don't have the answer but at least I can applaud a government placing value in it's own currency, unlike the US which seems all to willing to prop up the stock market speculators and real estate flippers.

[Naam]

Well they seem to have a fairly large amount of $ currency reserves and I'm not sure that this isn't a bad strategy.

whether the BOT has in mind to strengthen or weaken the Baht is not really known. the only thing important is to "align" the Baht in an orderly fashion, i.e. avoiding strong swings in whatever direction. the BOT sits indeed on surplus reserves gained from the period when USD galore were bought. at that time the critics didn't like the accumulation of USD and now they don't like the contrary

all aforesaid in my [not so] humble opinion

[Naam]

"Selling dollars to stall dollar growth" . Sorry I just don't get this.

where is "stalling growth" mentioned?

[ray23]

yuo will find it under 5:45 EDT in the last section

I guess could use them to buy oil. Right now they are really in the same boat I'm in hard to lose. Dollar is worth more they have them, baht worth more they have them.

Somehow I think this is really more about looking like they are making an effort. Probably really not a bad idea. I don't see that it has had a tremendous effect. Keep things from getting to nuts is also a very good reason

[Doalittle]

Is a devaluation of the BAHT on the cards.

[VegasVic]

Well they seem to have a fairly large amount of $ currency reserves and I'm not sure that this isn't a bad strategy.

whether the BOT has in mind to strengthen or weaken the Baht is not really known. the only thing important is to "align" the Baht in an orderly fashion, i.e. avoiding strong swings in whatever direction. the BOT sits indeed on surplus reserves gained from the period when USD galore were bought. at that time the critics didn't like the accumulation of USD and now they don't like the contrary

all aforesaid in my [not so] humble opinion

You seem to have a better handle on this than most here Naam! The BOT knows very well that it can't stop the weakening of the baht vs. the Dollar, but they can certainly mitigate the move to a degree, and this is just what they have done (in a very public fashion). The memories of 1997 are still very fresh in the minds of many, and the BOT merely wants an orderly move in the baht-Dollar relationship so as not to create a panic. I hope they are sucessful, a rapid move to 50baht/Dollar could be very destabilizing for Thailands markets. As I have said all along I think that when the dust settles the baht will gravitate back towards the 41-43/Dollar range, a range that it seems to have found comfort in since 1997.

[ray23]

Not my post borrowed from a friend on another forum, who knows what he is doing, so these countries must be doing much worse then Thailand, with it's border stand offs. Civil war in the south and a governmet forning new parties as the Supreme Court will likely disolve the current governement.

Doesn't this seem an odd picture?

By the way I wasn't terrerible upset with them when they were trying to keep the baht weak for the exporters. But I have to tell you I really don't know a lot about this thing, so many times I will post something and as a norm I learn from the guys that post here.

It was an interesting two days this reporter one day writing that the Thailand was trying to stall the growth of the dollar. The next day he didn't seem so sure of that. Where's the truth got me. If what I have qouted is true, someone much sharper then I would have to check that. But having seen the guys post for many years. I can tell you he is pro Thailand, and haven't seen him miss on his postings.

So these currency's enjoyed a lot of growth against the dollar over the past few years. Now they are not but the difference between where they are and the baht, just isn't logical. Unless Thailand is very aggresive at the moment.

Now where does the problem exist in my mind the Thai baht is supposed to be floated against a basket of currencies.

Apparently that basket does not include the Euro the Pound, the Auusie Dollar, or the Japanese yen.

Well will this thing continue maybe the BOT is being pressured by the Finance Minister, to weaken the baht and get the economy going again. All central banks face a huge problem now, how to balance between inflation and growth.

I would think that if the dollar is stronger oil will come down in cost, it did last week. That has got to help in the inflation area.

What I see here is two departments at each other with different goals. I honestly believe if the government could they would fire the BOT governor and she would be gone now. But, that is not an easy chore. Pretty strong protection built into the system to protect that office.

I doubt the two departments will work together in a give and take fashion. it's a huge problem.

That dollar and oil in my mind is nothing to play with, everyone need the oil price to go down, not up.

But I don't pull the whistle that makes the train go, I just hope they can find away to resolve thier differences and work together to solve the problems.

"The USD has had an exuberant start to the month having risen quite dramatically against most currencies.

For the currencies I track this has seen the USD make the following gains in the first six trading days of August:

3.2% against GBP

3.4% against EUR

6.3% against AUD

0.4% against THB

The movements stem primarily from news about other countries economies and changes in their interest rate expectations rather than any particularly news on the US Economy."

[lannarebirth]

I am reminded of the words of that great American Statesman Benjamin Franklin, who once cautioned :

“Believe none of what you hear and half of what you see.”

His words were reinforced in latter days when Stock Market technical analyst Joe Granville famously noted:

"News is for suckers"

Even my very own grandfather held a view on the matter:

"paper never refused ink".

[lifeisrandom]

that thai baht offshore rate is still much stronger than i would have imagined. it really is the strongest currency around asia. the USD just can't get any traction against it? why is that?

[lifeisrandom]

Not my post borrowed from a friend on another forum, who knows what he is doing, so these countries must be doing much worse then Thailand, with it's border stand offs. Civil war in the south and a governmet forning new parties as the Supreme Court will likely disolve the current governement.

Doesn't this seem an odd picture?

By the way I wasn't terrerible upset with them when they were trying to keep the baht weak for the exporters. But I have to tell you I really don't know a lot about this thing, so many times I will post something and as a norm I learn from the guys that post here.

It was an interesting two days this reporter one day writing that the Thailand was trying to stall the growth of the dollar. The next day he didn't seem so sure of that. Where's the truth got me. If what I have qouted is true, someone much sharper then I would have to check that. But having seen the guys post for many years. I can tell you he is pro Thailand, and haven't seen him miss on his postings.

So these currency's enjoyed a lot of growth against the dollar over the past few years. Now they are not but the difference between where they are and the baht, just isn't logical. Unless Thailand is very aggresive at the moment.

Now where does the problem exist in my mind the Thai baht is supposed to be floated against a basket of currencies.

Apparently that basket does not include the Euro the Pound, the Auusie Dollar, or the Japanese yen.

Well will this thing continue maybe the BOT is being pressured by the Finance Minister, to weaken the baht and get the economy going again. All central banks face a huge problem now, how to balance between inflation and growth.

I would think that if the dollar is stronger oil will come down in cost, it did last week. That has got to help in the inflation area.

What I see here is two departments at each other with different goals. I honestly believe if the government could they would fire the BOT governor and she would be gone now. But, that is not an easy chore. Pretty strong protection built into the system to protect that office.

I doubt the two departments will work together in a give and take fashion. it's a huge problem.

That dollar and oil in my mind is nothing to play with, everyone need the oil price to go down, not up.

But I don't pull the whistle that makes the train go, I just hope they can find away to resolve thier differences and work together to solve the problems.

"The USD has had an exuberant start to the month having risen quite dramatically against most currencies.

For the currencies I track this has seen the USD make the following gains in the first six trading days of August:

3.2% against GBP

3.4% against EUR

6.3% against AUD

0.4% against THB

The movements stem primarily from news about other countries economies and changes in their interest rate expectations rather than any particularly news on the US Economy."

exactly... all this talk about the Thai political scene is 100% irrelevant BS.

Nobody cares about Samak. During the last coup, the BAHT rose steadily against the $.

The only thing that matters is interests rates.

Yet still, I would have expected a larger move than only .4%... Come on!

[Naam]

that thai baht offshore rate is still much stronger than i would have imagined. it really is the strongest currency around asia. the USD just can't get any traction against it? why is that?

on what remote planet are you living my friend? a Thai Baht offshore rate does not exist since months. here is the "traction" of USD vs. Baht (last 4 months):

[britmaveric]

Indeed BOT are trying to slow it down.

[ray23]

Actually when you look at the total picture pretty crafty really. Dollar went up and was controlled by the BOT as to the baht, but not the others, therefor oil went down, and they still get more bang for thier baht. So essentially Thailand got a free ride on this one.

Apparently one of the biggest arguments between the BOT and the Finance poeple are having has to with easing interest rates. is i political you bet the governmen needs somethign to say hey we saved you. Definetly a short term view, but the short term is ewaht they have to perform in.

[lifeisrandom]

that thai baht offshore rate is still much stronger than i would have imagined. it really is the strongest currency around asia. the USD just can't get any traction against it? why is that?

on what remote planet are you living my friend? a Thai Baht offshore rate does not exist since months. here is the "traction" of USD vs. Baht (last 4 months):

since the fed announced interest rates might be raised, which clearly means, THEY WILL BE RAISED the USD has gained much more against other currencies than the baht. the baht has out performed every other currency around vs the $... in august the dollar is up HUGE against the EU, look at how much its up against teh baht, a minimal amount...

3.2% against GBP

3.4% against EUR

6.3% against AUD

0.4% against THB

ps: u have bad reading comprehension

Edited August 9, 2008 by lifeisrandom