Thai PM Calls Economic Meet Over Currency High

[webfact]

Thai PM calls economic meet over currency high

BANGKOK (AFP) -- Thai Prime Minister Abhisit Vejjajiva said Wednesday he had called a special meeting with top economic officials after the local currency soared to a 29-month high against the US dollar.

The Thai baht hit its highest peak since April 2008, trading at 31.16-18 to one dollar at one point in morning trade, having climbed about 5.00-6.00 percent this year, a dealer at Kasikornbank told AFP.

"The baht is fluctuating a lot now due to heavy capital inflow. I want all concerned agencies to meet and make agreements to curb the volatility in order to prevent it from affecting the real economy," Abhisit said.

The meeting on Thursday morning will include the finance and commerce ministers and the governor of the Bank of Thailand, Tarisa Watanagase.

Tarisa told reporters the baht had strengthened because of the country's strong economy and that the private sector should be able to adjust itself, but that the bank would step in if fluctuations were severe.

Despite two months of mass opposition protests from mid-March, which paralysed parts of Bangkok and sparked clashes with security forces that left 91 people dead, the kingdom's economy has remained relatively resilient.

Official figures released last month showed the economy expanded 9.1 percent in the second quarter of 2010 from a year earlier, and for the first six months of the year gross domestic product grew 10.6 percent.

Fitch ratings said Wednesday that Thailand's economic performance had "proved surprisingly robust to global and domestic turbulence in 2010".

Thai banks are likely to report higher net profits in 2010 and 2011, owing to stronger loan growth and lower provisioning costs -- assuming economic recovery remains on track -- the international ratings agency said.

-- (c) Copyright AFP 2010-09-01

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Related link: http://baht.thaivisa.com"

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[LaoPo]

"The meeting on Thursday morning will include the finance and commerce ministers and the governor of the Bank of Thailand, Tarisa Watanagase.

Tarisa told reporters the baht had strengthened because of the country's strong economy and that the private sector should be able to adjust itself, but that the bank would step in if fluctuations were severe."

Is this Tarisa lady still in place....?

I'm very curious what the meeting will decide to ease the Baht.....rice exports are -30% in the first 6 months of 2010 already.

How long can Thailand keep up with the strong Baht..?

LaoPo

[kalbo123]

I read everywhere that the Baht might be strong, but it does not affect exports...

something like it rains but you don't get wet.

As long as Thailand has a large trading surplus, it will be difficult to see a lower baht.

[mca]

Could Khun Abhisit kindly arrange for the baht to weaken for a week or so giving me just enough time to transfer some money from back home to buy a new car rather than just sticking a new set of tyres on my current one? Ta very much.

[Hakuchi]

Could Khun Abhisit kindly arrange for the baht to weaken for a week or so giving me just enough time to transfer some money from back home to buy a new car rather than just sticking a new set of tyres on my current one? Ta very much.

Why don't buy a new car abroad as long the Euro money is so weak? get some quality stuff.

[rubl]

Could Khun Abhisit kindly arrange for the baht to weaken for a week or so giving me just enough time to transfer some money from back home to buy a new car rather than just sticking a new set of tyres on my current one? Ta very much.

Why don't buy a new car abroad as long the Euro money is so weak? get some quality stuff.

Import duty may diminish your gain to null or negative I think.

[mca]

Could Khun Abhisit kindly arrange for the baht to weaken for a week or so giving me just enough time to transfer some money from back home to buy a new car rather than just sticking a new set of tyres on my current one? Ta very much.

Why don't buy a new car abroad as long the Euro money is so weak? get some quality stuff.

And end up with (my daughter's choice) a Mini Cooper that would buy a Porsche back home. I'll pass thanks

[tomyummer]

Holy cow! Now my noodles are going to cost me a buck thirty?! Help!!!

[Hakuchi]

Why don't buy a new car abroad as long the Euro money is so weak? get some quality stuff.

And end up with (my daughter's choice) a Mini Cooper that would buy a Porsche back home. I'll pass thanks

Import duty may diminish your gain to null or negative I think.

Of course, both of you are right when you drive that quality car on a Autobahn in Europe, but once you want it import to Thailand to stuck stylish in the Bangkok traffic a stronger Baht makes that dream cheaper (if you use your Baht funds to buy that car).

Money always comes with two sides.

[rubl]

Why don't buy a new car abroad as long the Euro money is so weak? get some quality stuff.

And end up with (my daughter's choice) a Mini Cooper that would buy a Porsche back home. I'll pass thanks

Import duty may diminish your gain to null or negative I think.

Of course, both of you are right when you drive that quality car on a Autobahn in Europe, but once you want it import to Thailand to stuck stylish in the Bangkok traffic a stronger Baht makes that dream cheaper (if you use your Baht funds to buy that car).

Money always comes with two sides.

I once read a remark, that if you're stuck in a traffic jam it's nicer in a rolls than in a mini. Profound words

[asiawatcher]

Either way the Baht is till artificially high but the BoT needs to stop buying up the currency making it 'appear' it is in high demand. Let it free float and stop manipulating the markets for your own gains.

[Abrak]

Is this Tarisa lady still in place....?

She is replaced by Prasarn on September 30th.

Exports are suffering if you look on a MOM basis.

[rubl]

Either way the Baht is till artificially high but the BoT needs to stop buying up the currency making it 'appear' it is in high demand. Let it free float and stop manipulating the markets for your own gains.

May I propose a managed float to avoid drastic fluctuations. I'm not convinced the Baht is artificially high or made to appear in demand. Probably more to do with influx on foreign money and the 200 point rise on the SET since the end of the 'peaceful protests' in May.

[Pib]

The PM will have his meeting...then announced everything is under control and the govt will continue to watch the baht closely. They will go on to say the baht is just appreciating along with most other currencies in the area...all is good...Thai export business will need to adjust...blah...blah...blah. The meeting is nothing more than political grandstanding.

[12DrinkMore]

Either way the Baht is till artificially high but the BoT needs to stop buying up the currency making it 'appear' it is in high demand. Let it free float and stop manipulating the markets for your own gains.

You have the wrong end of the stick, for months the BoT has been selling THB and buying foreign currencies to keep the value DOWN and in line with other Asian currencies. So the value of the THB is currently, if you like, artificially LOW.

And, as has been posted elsewhere, there has been little effect on exports and the Thai economy is racing away at 7% growth, with that level of growth t would be, IMO, stupid to intervene in the currency markets. The Thais should enjoy the cheaper import prices and allow their level of wealth and prosperity to increase. It is inevitable that Asian currencies will appreciate over the long term, as the western basket cases take the economic hit that they deserve. The Asians just need to keep it all in step with each other and not allow the rampant speculation and fraudulent behaviour of the western finance system to take hold.

[kuffki]

Once again nothing but paper headline and PR.

They have had this meetings before, BOT, Banks and all other gov agency's for the past year yet baht keeps getting stronger.

Seems while the whole world is down the toilet, Thailand keeps growing, while i do appreciate Asian economy positions but i have said it many times before

Thailand was not affected by US banking meltdown, because Thai banks were not very much exposed to US Markets according to BOT.

Thailand was not affected by European banking meltdown because Thai banks were not very much exposed to European Markets according to BOT.

So i can not help but wonder, what markets is Thailand exposed to? Not US, Not Euro, Not Asian, because when Japan, Korea crashed-Thailand continued to grow.

Does anyone think this meeting will resolve in BOT stopping to control baht? or will we be paying few US$ for 1 thb in the near future.

Funny enough though, while baht keeps getting stronger the price of imported goods also keeps growing. How does that work?

Edited September 1, 2010 by kuffki

[kuffki]

Either way the Baht is till artificially high but the BoT needs to stop buying up the currency making it 'appear' it is in high demand. Let it free float and stop manipulating the markets for your own gains.

You have the wrong end of the stick, for months the BoT has been selling THB and buying foreign currencies to keep the value DOWN and in line with other Asian currencies. So the value of the THB is currently, if you like, artificially LOW.

And, as has been posted elsewhere, there has been little effect on exports and the Thai economy is racing away at 7% growth, with that level of growth t would be, IMO, stupid to intervene in the currency markets. The Thais should enjoy the cheaper import prices and allow their level of wealth and prosperity to increase. It is inevitable that Asian currencies will appreciate over the long term, as the western basket cases take the economic hit that they deserve. The Asians just need to keep it all in step with each other and not allow the rampant speculation and fraudulent behaviour of the western finance system to take hold.

I do not really follow your train of thought.

For starters prices on imported goods went up rather then went down.

How can Thais enjoy the prosperity? being mainly export country Thailand will start to see loss of business in exports rather then a gain.

All those figures of growth are far from being true, just like tourism being 6% of the GDP, yet if you take official figures of tourists and multiply that by minimum $2000, because this is how much each tourist will spend on food, accommodation, taxi, drinks, shopping, even airfares for those who fly with Thai, airport taxes etc etc etc and you get more like 30% of the GDP.

If anything strong THB will hurt Thailand in the long run, because once the "big buyers" start to shop elsewhere, they will not be coming back any time soon.

Cambodia and Vietnam is now taking a lot of business from Thailand, so is Malaysia and Indonesia.

Speak to a regular Thai person or small business owner and they all cry how bad business is.

There are shops, hotels, bars , cafe's, restaurants closing down every single day and thousands of business up for sale-is that what you call prosperity?