Bank Of Thailand Steps In To Check Baht Rise

[webfact]

BOT steps in to check baht rise

By The Nation, Agencies

BANGKOK: -- The Bank of Thailand early this week intervened in the foreign exchange market, following irregular movement in the US$/baht exchange rate, BOT Assistant Governor Suchada Kirakul said yesterday. The baht's appreciation against the greenback was faster than the $/yuan rate, she said.

Yesterday's weakening of the baht was not because of the intervention but due to the market mechanism, she said.

The baht slid 0.1 per cent to 32.37 per dollar as of 3.32pm in Bangkok, according to data compiled by Bloomberg. On Tuesday, it touched 32.23, the strongest level since May 10.

BOT Deputy governor Bandid Nijathaworn admitted that the yuan's strengthening would pull up other Asian currencies, which is supporting longterm economic stability. He is also confident that Asia will be the major growth driver of the world.

"Asia is resilient to the European debt crisis. The middleclass population is also increasing and boosting consumption. This attracts foreign investment," he said.

Still, he expressed concern that Thailand's economic acceleration in the second half may pressure inflation and it could drive the central bank to take action soon. He also noted that inflation next year might exceed this year's target of 0.53 per cent, on economic acceleration.

Credit Suisse Group said China's policymakers would likely let the yuan rise as much as 5 per cent over the next 12 months, more than forward contracts suggest.

The yuan is about 50 per cent "undervalued", the Swiss lender estimated in a June 21 research note, citing factors, including trade.

Morgan Stanley said in a report that the yuan will strengthen about 10 per cent by the end of next year.

"We would not be surprised to see a 5percent appreciation," wrote Andrew Garthwaite, global equity strategist in London at Credit Suisse. "Clearly, every commentator including us believes the move will be gradual."

The yuan was 0.05 per cent stronger at 6.8099 per dollar as of 2.35pm in Shanghai, extending this week's advance to 0.24 per cent, according to the China Foreign Exchange Trade System.

Nondeliverable forwards show investors are betting on a 2.2percent appreciation over the next 12 months.

Economists at Citigroup expect the yuan will strengthen 2 per cent against the US dollar through the end of this year and nearly 3 per cent within a year, compared with a 19percent appreciation between 2005 and 2008.

Citigroup expects the end of yuan's peg will boost Asian currencies and benefit the region's natural resource producers, tourism companies and property developers.

"China's renminbi policy shift could spark a rally in Asian currencies and markets as investors positioned in anticipation of currency gains," Chua Hak Bin, head of research at Citigroup in Singapore, wrote in the report released this week.

Increasing overseas investment by China should raise the bankloan demand in affected regions, benefiting banks, including PT Bank Mandiri and Bangkok Bank, according to the report.

Natural resource producers, including Banpu's Indo Tambangraya Megah, Kuala Lumpur Kepong and Golden AgriResources, should benefit from stronger commodity demand.

With a stronger yuan and increasing wealth, Chinese tourists will likely increase and that should contribute to profits of carriers and other tourismrelated companies.

-- The Nation 2010-06-24

[gotlost]

The baht has to strong for a couple of years.

[asiawatcher]

Whichever way you look at it, the Baht is still artificially strong. BoT should let it ride free and boost the economy hugely in Exports.

[Naam]

Whichever way you look at it, the Baht is still artificially strong. BoT should let it ride free and boost the economy hugely in Exports.

for the record: the BoT is weakening the Baht by continously selling THB and buying USD since many months. without that intervention the BAHT would be much stronger.

[Jingthing]

So the yuan is artificially 50 percent too weak, and Thailand expects to track the rise of the yuan vs. the dollar over time. So this means what? Over time 15 baht to the dollar? If so, hasta la vista baby!

[mitsubishi]

Let that beautiful baht come on down a little, us expats with £££££ need a little break on this 46 - 50 baht rate bs.

Come into the 60 - 70 zone baht your time is up

[jcon]

So the yuan is artificially 50 percent too weak, and Thailand expects to track the rise of the yuan vs. the dollar over time. So this means what? Over time 15 baht to the dollar? If so, hasta la vista baby!

That's right Jingthing, practice that spanish for the move to Argentina!

Raging inflation but I still reckon you'll get better WWW for your $$$.

W = Wine

W = Women (Ok, fine, this doesn't apply to you, but it still stands!!! )

W = Weather

Back on topic, Yuan NDFs are still pricing in low 2% appreciation against the USD for one year. Even if that changes, it's gonna take awhile for that "50%" move.... in the meantime, watch your THB-denominated assets rise in value even more (that's one upside to owning some things in Thailand)!!! That way, your final "hasta la vista" will have that much more oomph

[Jingthing]

So the yuan is artificially 50 percent too weak, and Thailand expects to track the rise of the yuan vs. the dollar over time. So this means what? Over time 15 baht to the dollar? If so, hasta la vista baby!

That's right Jingthing, practice that spanish for the move to Argentina!

Raging inflation but I still reckon you'll get better WWW for your $$$.

W = Wine

W = Women (Ok, fine, this doesn't apply to you, but it still stands!!! )

W = Weather

Back on topic, Yuan NDFs are still pricing in low 2% appreciation against the USD for one year. Even if that changes, it's gonna take awhile for that "50%" move.... in the meantime, watch your THB-denominated assets rise in value even more (that's one upside to owning some things in Thailand)!!! That way, your final "hasta la vista" will have that much more oomph

I am too young for my pension money so I would likely go to the Philippines or even back to the U.S.S.A. Bank account qualifying retirement visas are very rare in the world. Or maybe the Filip-peso will follow the yuan/baht.

Edited June 24, 2010 by Jingthing

[bangkokburning]

Philippines...better rethink that one.

WHY is the THB so strong? Tight money supply? Can't be foreign reserves, would that not weaken as the reserves US/EU weaken? Last time I heard they only were holding about 18 billion in reserve. The economy is ok. Inflation is on the move.

Is there a trading window that the BOT will disallow the THB from moving out of forcibly wthout propping it up on the open market (a real loser startegy)?

What is outlook next five years?!

I think it's a political move. The nation is very unstable and the last thing a nation wants is a downward trend in the currency. The difficult part is that it will ravage tourism along with all the bad news these last years.

[IMA_FARANG]

1. If the Baht/Dollar rate is 32.23 today and it goes to 32.30 tommorow that is not a stronger Baht, but a weaker Baht, isn't it? If you get less Baht for the Dollar that is a stronger Baht. If you get more Baht for the Dollar that is a weaker Baht.

2. It must be clear that the Thai government is selling Dollars or Pounds or Euros to keep the Baht higher against those currencys than it should be.

3. And finally, didn't I see a month or two ago on this forum, that a Singapore bank said they were reserving the right to limit their customers holdings in Baht because the Thai government was limiting the amount of foriegn currency trading by all financial institutions for ALL Baht/foriegn currency transactions to XXX million Baht per institution per day?. That sentence is the clue right there as to why the Baht is not losing value against the Dollar/Pound/Euro or whatever as fast as it should if trading were free. The fact is...the trading in Baht is NOT FREE...but restricted by the Thai governnment. The result is to keep the Baht artificially high against those other currencies.

Edited June 25, 2010 by IMA_FARANG

[alant]

1. If the Baht/Dollar rate is 32.23 today and it goes to 32.30 tommorow that is not a stronger Baht, but a weaker Baht, isn't it? If you get less Baht for the Dollar that is a stronger Baht. If you get more Baht for the Dollar that is a weaker Baht.

2. It must be clear that the Thai government is selling Dollars or Pounds or Euros to keep the Baht higher against those currencys than it should be.

3. And finally, didn't I see a month or two ago on this forum, that a Singapore bank said they were reserving the right to limit their customers holdings in Baht because the Thai government was limiting the amount of foriegn currency trading by all financial institutions for ALL Baht/foriegn currency transactions to XXX million Baht per institution per day?. That sentence is the clue right there as to why the Baht is not losing value against the Dollar/Pound/Euro or whatever as fast as it should if trading were free. The fact is...the trading in Baht is NOT FREE...but restricted by the Thai governnment. The result is to keep the Baht artificially high against those other currencies.

totaly agree

[thaihome]

1. If the Baht/Dollar rate is 32.23 today and it goes to 32.30 tommorow that is not a stronger Baht, but a weaker Baht, isn't it? If you get less Baht for the Dollar that is a stronger Baht. If you get more Baht for the Dollar that is a weaker Baht.

2. It must be clear that the Thai government is selling Dollars or Pounds or Euros to keep the Baht higher against those currencys than it should be.

3. And finally, didn't I see a month or two ago on this forum, that a Singapore bank said they were reserving the right to limit their customers holdings in Baht because the Thai government was limiting the amount of foriegn currency trading by all financial institutions for ALL Baht/foriegn currency transactions to XXX million Baht per institution per day?. That sentence is the clue right there as to why the Baht is not losing value against the Dollar/Pound/Euro or whatever as fast as it should if trading were free. The fact is...the trading in Baht is NOT FREE...but restricted by the Thai governnment. The result is to keep the Baht artificially high against those other currencies.

totaly agree

You can totally agree, but it is completly incorrect. A small amount of reasearch will show why.

[Naam]

1. If the Baht/Dollar rate is 32.23 today and it goes to 32.30 tommorow that is not a stronger Baht, but a weaker Baht, isn't it? If you get less Baht for the Dollar that is a stronger Baht. If you get more Baht for the Dollar that is a weaker Baht.

2. It must be clear that the Thai government is selling Dollars or Pounds or Euros to keep the Baht higher against those currencys than it should be.

3. And finally, didn't I see a month or two ago on this forum, that a Singapore bank said they were reserving the right to limit their customers holdings in Baht because the Thai government was limiting the amount of foriegn currency trading by all financial institutions for ALL Baht/foriegn currency transactions to XXX million Baht per institution per day?. That sentence is the clue right there as to why the Baht is not losing value against the Dollar/Pound/Euro or whatever as fast as it should if trading were free. The fact is...the trading in Baht is NOT FREE...but restricted by the Thai governnment. The result is to keep the Baht artificially high against those other currencies.

totaly agree

both of you are totally wrong

[rafish]

Philippines...better rethink that one.

WHY is the THB so strong? Tight money supply? Can't be foreign reserves, would that not weaken as the reserves US/EU weaken? Last time I heard they only were holding about 18 billion in reserve. The economy is ok. Inflation is on the move.

Is there a trading window that the BOT will disallow the THB from moving out of forcibly wthout propping it up on the open market (a real loser startegy)?

What is outlook next five years?!

I think it's a political move. The nation is very unstable and the last thing a nation wants is a downward trend in the currency. The difficult part is that it will ravage tourism along with all the bad news these last years.

It a "restricted trading limit," placed on the Baht by the BoT/SET Forex. Look it up on the Thai SET rules and regulations. The Baht cannot appreciate or depreciate in one session greater than that allowed by the BoT. The selling off of dollars is not causing the Baht to appreciate, its the lack of sales that keeps the Baht strong. There are plenty of dollars leaving Thailand, however they go in black suitcases on specific journeys to Switzerland. So called "black money." In other countries we call it laundry money. After the 97 collapse the BoT took specific steps to insure that the Thai government/finance ministry could and would control the rise and fall of the Thai Baht regardless of foreign sell offs. (thanks to Soros and the fall of the pound in 97) I dare say one would be hard pressed to find anyone playing the Forex game with the Thai Baht from any European/Western country. Most if not all Baht manipulation is home grown.

[thaifrelst]

If the chinese is about to revaliate,- how come the fact that the yuan is weakening against forreign currency. If the speculants beleived in it they would byu yuan like hel_l. I am working in China at the moment and can not see any reason to revaliate.

That was just small talk in front of the G-20 meeting.

A strong yuan now will make the estate bubble break.

[jcon]

1. If the Baht/Dollar rate is 32.23 today and it goes to 32.30 tommorow that is not a stronger Baht, but a weaker Baht, isn't it? If you get less Baht for the Dollar that is a stronger Baht. If you get more Baht for the Dollar that is a weaker Baht.

2. It must be clear that the Thai government is selling Dollars or Pounds or Euros to keep the Baht higher against those currencys than it should be.

3. And finally, didn't I see a month or two ago on this forum, that a Singapore bank said they were reserving the right to limit their customers holdings in Baht because the Thai government was limiting the amount of foriegn currency trading by all financial institutions for ALL Baht/foriegn currency transactions to XXX million Baht per institution per day?. That sentence is the clue right there as to why the Baht is not losing value against the Dollar/Pound/Euro or whatever as fast as it should if trading were free. The fact is...the trading in Baht is NOT FREE...but restricted by the Thai governnment. The result is to keep the Baht artificially high against those other currencies.

YIKES!

[thaihome]

It a "restricted trading limit," placed on the Baht by the BoT/SET Forex. Look it up on the Thai SET rules and regulations. The Baht cannot appreciate or depreciate in one session greater than that allowed by the BoT. The selling off of dollars is not causing the Baht to appreciate, its the lack of sales that keeps the Baht strong. There are plenty of dollars leaving Thailand, however they go in black suitcases on specific journeys to Switzerland. So called "black money." In other countries we call it laundry money. After the 97 collapse the BoT took specific steps to insure that the Thai government/finance ministry could and would control the rise and fall of the Thai Baht regardless of foreign sell offs. (thanks to Soros and the fall of the pound in 97) I dare say one would be hard pressed to find anyone playing the Forex game with the Thai Baht from any European/Western country. Most if not all Baht manipulation is home grown.

Yep, and the over billion dollars that has flowed into the SET since the begining of the year had nothing to do with the rise in the baht.

TH

[rafish]

<br>

<br>It a "restricted trading limit," placed on the Baht by the BoT/SET Forex.  Look it up on the Thai SET rules and regulations.  The Baht cannot appreciate or depreciate in one session greater than that allowed by the BoT.  The selling off of dollars is not causing the Baht to appreciate, its the lack of sales that keeps the Baht strong.  There are plenty of dollars leaving Thailand, however they go in black suitcases on specific journeys to Switzerland.  So called "black money."  In other countries we call it laundry money.  After the 97 collapse the BoT took specific steps to insure that the Thai government/finance ministry could and would control the rise and fall of the Thai Baht regardless of foreign sell offs.  (thanks to Soros and the fall of the pound in 97)  I dare say one would be hard pressed to find anyone playing the Forex game with the Thai Baht from any European/Western country.  Most if not all Baht manipulation is home grown.<br>

<br><br>Yep, and the over billion dollars that has flowed into the SET since the begining of the year had nothing to do with the rise in the baht.<br>TH<br>

<br><br>Again, "Artificial," investment.  The SET rises and falls not on advertised "foreign investment," but those controlling the SET within Thailands ruling class.  Investigate just "who," owns the top companies listed on the SET.  That should give you some real insight as to who and what controls the Thai stock market and currency exchange.<br><br>

[thaihome]

Again, "Artificial," investment.The SET rises and falls not on advertised "foreign investment," but those controlling the SET within Thailands ruling class. Investigate just "who," owns the top companies listed on the SET. That should give you some real insight as to who and what controls the Thai stock market and currency exchange.

Oh, yeah right…forgot about that stuff…

TH

[hhgz]

Months ago, the theory was that the BoT spent $100B THB to make the THB weaker, and it would reach 60THB/USD "soon". The current theory is that the BoT is spending a similar amount of money to make the THB stronger. According to one poster, as soon as BoT stops supporting the THB, it will collapse to 60THB/USD..."soon".

[Abrak]

1. If the Baht/Dollar rate is 32.23 today and it goes to 32.30 tommorow that is not a stronger Baht, but a weaker Baht, isn't it? If you get less Baht for the Dollar that is a stronger Baht. If you get more Baht for the Dollar that is a weaker Baht.

2. It must be clear that the Thai government is selling Dollars or Pounds or Euros to keep the Baht higher against those currencys than it should be.

3. And finally, didn't I see a month or two ago on this forum, that a Singapore bank said they were reserving the right to limit their customers holdings in Baht because the Thai government was limiting the amount of foriegn currency trading by all financial institutions for ALL Baht/foriegn currency transactions to XXX million Baht per institution per day?. That sentence is the clue right there as to why the Baht is not losing value against the Dollar/Pound/Euro or whatever as fast as it should if trading were free. The fact is...the trading in Baht is NOT FREE...but restricted by the Thai governnment. The result is to keep the Baht artificially high against those other currencies.

YIKES!

Yeah I know.... it is pretty scary when you think about.

Part of the conspiracy is obviously an attempt to keep the baht high, so that Thaksin can take his money out and buy football clubs. But it is not just him involved. Obviously Abhisit needs to move his money abroad so he can buy a semi in Balham, while Korn is more interested in Mews House close to Harrods.

[inthepink]

More erroneous thinking regarding foreign exchange markets. Seems to be endemic to this board. What reasons can anyone give for thinking the baht is artificially high against any of the majors?

[Naam]

More erroneous thinking regarding foreign exchange markets. Seems to be endemic to this board. What reasons can anyone give for thinking the baht is artificially high against any of the majors?

if not wet dreams the reason is wishful thinking. can't blame the chaps who see "their" exchange rate going down the drain, can you?