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Government Likely To Impose Measure To Control Capital Inflow Soon


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Government likely to impose measure to control capital inflow soon

BANGKOK: -- The Thai government will soon likely present a measure to control foreign capital inflows in an effort to slow the strengthening of the baht, according to a leading economist.

Speaking at a seminar on “Economy in 2010: Prosperity or Slump,” Phatra Securities Managing Director Supavud Saicheua said the current sharp baht rise had begun to impact the real economic sector.

Consequently, he believed the government must respond with a definite measure to control the foreign capital influx to prevent the baht from appreciating too rapidly.

However, he said, the measure adopted by the government is aimed to help the real economic sector adjust itself in a timely manner amid the strengthening of the baht.

Mr Supavud said the current baht rise was attributed partly by the capital inflow from Europe to seek investment returns as governments of European countries turned to adopt the monetary policy to stimulate the economy.

Kim Eng Securities Chief Executive Officer Montri Sornpaisarn said currencies of many Asian countries, including Thailand, had strengthened due to their strong fiscal positions, sound capital reserves, and stable financial institutions.

He predicted the Thai economy this year would grow by 7-8 per cent instead of the 4 per cent expected earlier with public debt staying at 50 per cent or below and unemployment lower than 1 per cent.

Mr Montri conceded the interest hike could be adopted to ease the economic heating, but he expected the interest rate would not rise significantly from now on. (MCOT online news)

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-- TNA 2010-09-15

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Since the Japanese govt intervened on the strengthening yen today because of the yen's rising value and impact on Japanese exports, maybe this will nudge Thai govt towards actions to intervene on the rapidly appreciating baht which must be impacting exports to some degree.

Maybe the Bank of Thailand (BOT) was reluctant to intervene because of heat they might get from other goverments...that is, being accused of manipulating their currency. Now the BOT could say, Well, the Japanese govt is intervening to help protect their economy and we are just doing the same for the Thai economy.

I noticed from looking at Bloomberg a few minutes ago the dollar had appreciated by over 2% against the yen due to Japan's interventions but the dollar has only appreciated 0.5% against the baht at this minute in time. I was hoping the dollar to yen rise (percentage-wise) due to the yen intervention might mirror itself in the dollar to baht rise but so far it hasn't happened. The baht did depreciate somewhat by 0.5% at this minute in time, but that's a far cry from yen depreciation of 2%.

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I was hoping the dollar to yen rise (percentage-wise) due to the yen intervention might mirror itself in the dollar to baht rise but so far it hasn't happened. The baht did depreciate somewhat by 0.5% at this minute in time, but that's a far cry from yen depreciation of 2%.

Not sure why you should draw the conclusion that because the Japanese pushed out JPY 100 Billion into the capital markets this should also directly be mirrored in the THB.

http://thainews.prd.go.th/en/news.php?id=255309140020

indicates that the Thais do not have any major worries regarding exports.

The Ministry of Commerce is confident the Thai exports will grow by 20% as targeted if the baht does not fall below 30 THB per USD.

The Asians should sit back and enjoy the increasing affluence and standard of living they now deserve, whilst the profligate western debtors take the corresponding drop in living standards, and maybe get off their lardarses and start producing stuff again. Although I now consider it is too late for this train to be turned around inside a few years.

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