Coming to Thailand

[webfact]

Baht fluctuates, but moves in same direction as main currencies: BoT

BANGKOK, April 23 (TNA) – Bank of Thailand (BoT) Deputy Governor Atchana Waiquamdee on Friday conceded the baht had fluctuated quite heavily for now, but still moved in the same direction as other currencies in the region.

She said the main currencies including the euro(€) and Japanese yen(¥) are very volatile now since the countries of these currencies had paid more attention to managing their economies than overseeing their currency exchange rates.

Mrs Atchana said foreign capital had continued flowing into Thailand since early this year. Around 100 billion baht of this has been invested in the fixed income market with another 19-20 billion baht in the Thai stock market.

She expected that foreign capital would continue pouring into Thailand because the economy still had a good outlook and interest rate was on an upward trend.

“Looking quarter to quarter, foreign capital has flowed into the country this year in a much larger amount than that of last year because there have been neither prolonged rallies in the country nor further implementation of the quantitative easing measure by the United States so far. In the first quarter of this year, more than 120 billion baht has already flowed into the country,” she said.

Since early this year, she added, foreign capital has flowed into all markets in Asia except Taiwan. The central bank had closely monitored the baht movement and capital inflow, but found nothing unusual. (MCOT online news)

-- TNA 2011-04-23

[Pib]

Announcements from Thai govt agencies are always rosy, everything normal, no-to-minimal impact, Thai life is good, etc.

Edited April 23, 2011 by Pib

[TheGhostWithin]

This is the closest statement I have ever seen as to the BOT admitting that they have a near-fixed/pegged exchange rate. On the grand scale of things, the Baht has a 10-20% maximum give on either side to all currencies that I have seen - bar all universal trends, such as the dollar weakening, the GBP weakening.

Interest rates rising in Thailand will not cause investment to flow in - interest rates of 2% are miniscule to the 4.75% in Australia, or 11.75% if you want to take a bit of a risk in Brazil. Thailand is not economically sound as either of these countries. People invest in Thailand either with a dam_n good assurance that they will get decent capital return, or they invest a small percentage of their funds as "danger money". There will be net outflows from Thailand if interest rates rise, and it fails to curb inflation as is the case in China.

The best case scenario for Thailand, is a situation like Japan with near-zero rates - however, this would require substantial surpluses for a number of years, as well as high rates of personal savings to sustain an environment such as this. In saying that, I think the days of having "the highest growth rate" are fast becoming unfashionable.