Bloomberg News Why The Thai Baht Is Falling Slowly

[livinthailandos]

First note I really didn't know how to put what I actually really want to say. For those of you this just came out. You can read for yourself by but I am pasting this as this might help explain why with everything going on the thai baht is where it is. At least to me it is interesting as it was NOT put out by someone within a thai institute but by a foreign company. Article here

http://www.bloomberg.com/apps/news?pid=206...WYs.A&pos=3

Foreign investors will sell more Thai shares as the political unrest worsens,” Win, whose fund beat 97 percent of 234 Thai equities funds tracked by Bloomberg in the past year, said in an interview yesterday. “They will stay out of the Thai market for some time because the confrontation will continue for a couple of days

Losses in the baht may be limited because the central bank controls speculative trading and limits transactions from corporations and investors, according to Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo.

The Bank of Thailand sets a daily cap of 300 million baht for trading accounts held by non-residents, such as overseas corporations, funds and banks, for investments in securities and other financial instruments. A similar limit is also set for non-investment accounts.

“The authorities’ way to control speculative trading is working quite well under this kind of conditions,” Soma said. “Still, this kind of violence is definitely negative for the baht and stocks because that will further damage tourism, which is an important sector for their economy.”

Edited May 17, 2010 by livinthailandos

[soundman]

Moved to Finance forum.

[SinghaJoe]

thank you great find and very precious piece of information

[Chivas]

thank you great find and very precious piece of information

Why the sarcasm ??

[Naam]

thank you great find and very precious piece of information

Why the sarcasm ??

indeed! no sarcasm warranted as a lot of investors are not aware of prevailing restrictions. here a message from my bank when i bought a substantial amount of THB last year:

Dear Client,

Thai Baht Currency Restrictions

Further to the Bank of Thailand’s Measure No. 33/2003 (Additional Measure to Prevent Thai Baht Speculation), which came into effect in October 2003, XXX Bank, Singapore Branch is subject to restrictions affecting its holdings of Thai Baht currency. These include the following:

Maintaining THB accounts in Thailand for settlement purposes only, where settlement means the settlement of securities transactions and cash payment transactions. The exception is for deposits of a tenor of at least 6 months or more.

Forfeiture of credit interest on its accounts (other than deposits of a tenor of at least 6 months or more)

Ensuring that the aggregated end of day balances for cash accounts with all financial institutions in Thailand do not exceed THB 300 million (the “Daily THB Limit”)

Imposition of deposit charge on THB account balances.

In relation to the Daily THB Limit, XXX Bank, Singapore Branch will be required to adjust its Thai Baht balances in all its client accounts to be compliant with the permitted level as determined by the Thai authorities on a daily basis. As such accounts may include balances in Thai Baht held on your behalf, it is critical that we are able to adjust client THB balances to ensure compliance.

Accordingly, at any time that you are holding a long position in THB, we reserve the right in our absolute discretion and without prior notice to you to convert your holding of THB, in whole or part, into United States dollars at the prevailing spot rate.

Yours truly,

XXX Bank, Singapore Branch

[SinghaJoe]

thank you great find and very precious piece of information

Why the sarcasm ??

indeed! no sarcasm warranted

thumbs up smiley don't mean no sarcasm folks

by the way Naam thank you for posting your informative message