Thai C.bank Says Has No Target Level For Baht

[churchill]

The Thai baht is trading near a 14-month high against the dollar but it remains competitive and the Bank of Thailand will not intervene in the market to stop it rising above a certain level, an assistant governor said.

Suchada Kirakul told Reuters the central bank would only intervene to address volatility.

"We are in the market as necessary to smooth out fluctuations or to prevent a market panic," she said in an interview on Monday.

Asked about a market view that the central bank was trying to halt the baht's rise at 33.50 per dollar, she replied: "We don't have any specific level for the baht ... or try to defend it at certain levels."

The baht <THB=TH> was around 33.59/62 to the dollar on Monday. It has risen about 3.6 percent against the dollar so far this year, making it the best-performing currency in Asia after Indonesia's rupiah and South Korea's won.

The baht has strengthened quickly by 1.3 percent in the past three weeks against a weak dollar, and Suchada said its appreciation was also due to the country's current account surplus and capital inflows across the region.

She said the baht was still competitive and current capital flows were non-speculative.

"The baht is not at a disadvantage to trade partners and competitors," Suchada said, adding other regional currencies had also strengthened due in part to risk appetite in the region.

Suchada said the central had no need and no rush to sell more savings bonds after it raised about 131 billion baht ($3.90 billion) in savings bonds earlier this month.

However, it may do so if there was demand and if it did not affect the bond market or compete with government plans, she said. "We have to discuss with the finance ministry first."

Earlier this month, Finance Minister Korn Chatikavanij told Reuters his ministry planned to sell another 50 billion baht of savings bonds in November after its bond sale in July attracted overwhelming demand from retail investors. [iD:nBKK173619]. ($1=33.58 Baht)

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[Pib]

The Thailand central bank authorities will continue to avoid any "real involvement" in maintaining the baht at a certain/minimum level in relation to the U.S. dollar and other major currencies, although the central bank will make policy statements they are monitoring the situation very closely....blah...blah...blah. While they may indeed be watching the baht's value very closely, their continuing policy of minimal-to-no-involvement (regardless of what they say) will persist until possibly the baht appreciates much, much too much due to trader speculation. Of course by then, the damage will have been done to the Thailand export market which accounts for about 60% of the Thai economy. Never fear, the central bank will arrive on the scene after the accident.

[Time Traveller]

Thai central bank will do exactly what other asian central banks do. They weaken their currencies, we'll weaken ours. They let the currency strengthen, then we'll do the same. All of a sudden with the US treasury happy to see the dollar weaken, x billion dollars of fx reserves don't look so good so over time asian countries will realise that no matter what they do, exports to the US are not going to be like before, so deliberately weaken their currency has no benefit for the country except subsidising marginal industries that perhaps should be left to die.

Exporters can cry all they want, I'd say it's an indication of them relying to heavily on one customer. i.e. America.