No signs of speculation as baht soars: Prasarn

Sarun Kijvasin

The Nation

Amid the strengthening of the baht against the US dollar, the Bank of Thailand said there were no signs of speculation. However, the central bank plans a meeting with the Federation of Thai Industries to discuss measures to help exporters.

BOT governor points to balance in buying, selling

BANGKOK: -- The Bank of Thailand has found no signs of baht speculation as it plans a meeting with the Federation of Thai Industries (FTI) to help exporters cope with the appreciating currency.

BOT Governor Prasarn Trairatvorakul said capital flowing into the country during this period was not speculation against the baht. The inflows to purchase the baht were because it had previously seen less appreciation than other regional currencies. Another reason is expectation of relatively satisfactory economic figures for Thailand this year.

"As far as we can see, it is not speculation, which is different [from what is actually happening]. Speculation is like leading, dumping or manipulation of prices. Now … buying and selling are relatively balanced," Prasarn said.

Most of the capital flowed into short-term debt instruments, partly reflecting investors' uncertainty about the baht's direction.

In the past week or two, the Thai currency has strengthened about 2-3 per cent against the US dollar, less than some of its regional peers, Prasarn said. Last year, it appreciated 3 per cent.

"In the first half of last year, investors might have been uncertain after Thailand's flood problems but started gaining confidence in the latter half, helping the baht - with less appreciation than its regional peers. This year, the improved economic figures show the country's strength, and that could have resulted in the baht's appreciation," Prasarn said.

From the beginning of last year to date, the baht has appreciated about 5-6 per cent, while South Korea's won strengthened 9 per cent, he said. The Philippine peso appreciated 7 per cent, while the Singapore dollar and Malaysian ringgit appreciated 5-6 per cent. The central bank earlier employed some measures, including limiting foreign holdings of the baht without underlying assets, to control the baht.

In response to a question on a meeting on Wednesday between Prime Minister Yingluck Shinawatra and relevant agencies over the baht's appreciation, Prasarn explained that it was a normal meeting. The BOT had explained the situation on the Thai currency after a question by the prime minister, who asked the central bank to monitor the baht closely with regular reports.

Songtum Pinto, BOT director for the Monetary Policy Office, explained that this year's export-growth estimation of 9 per cent was based on several factors, including the average exchange rate. The appreciating baht during the past couple of weeks did not have any effect on the estimates.

The BOT will soon have a discussion with the FTI after its chairman sought a meeting on Wednesday.

Prasarn said that in principle, three major concerns - import content, export and local distribution of products, and gross profit - should be taken into consideration when dealing with foreign-exchange issues.

"Currently, the prime minister is considering relief measures for the affected groups. The impacts are different for them. One idea all agreed with is that those who invest abroad will benefit, especially those who have to purchase capital products or machines from abroad," Prasarn said.

-- The Nation 2013-01-25

Hard to see why the Baht is strengthening other than international currencies are simply weakening.

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

May we (please ... not !) live in interesting times !

"capital flowing into the country was not speculation against the baht. The inflows to purchase the baht were because it had previously seen less appreciation than other regional currencies."

So it's not speculation against the baht, it's speculation against other regional currencies, if I understand him correctly ? But it still strengthens the Baht, and tends to make Thai-exports & holidays more expensive, doesn't it ? And that's hardly good for the thai economy, is it ?

"Now ... buying and selling are relatively balanced, Prasarn said."

Of course, if they were not balanced, then the exchange-rate would move, until supply & demand were balanced. As indeed appears to be happening.

Most of the capital flowed into short-term debt-instruments,

So perhaps time for the BOT to cut the premiums on those short-term debt-instruments, and thus weaken the baht, rather than the government considering relief for some of the affected groups ?

Especially with a 2.2 Trillion Baht longer-term borrowing-requirement coming up soon, no need to pay higher-than-necessary interest, on that sort of money !

Edited January 25, 201313 yr by Ricardo

the Thai company Double A just bought a paper mill factory in France, a very low US dollar is helpful in that case. Currencies dont go down that fast without the "help" of some speculators. a bad news for Thai export .

Isn't the Central Bank rate 2.75% in Thailand? Well, plenty of scope to cut it. Imports versus exports is a delicate balance. Basically, all of Thailand's oil is imported, which is used for just about every industrial process one way or another. Plus, there is virtually no raw materials in the country, so everything that is manufactured here, relies on imported raw materials, so take with one and give with the other. Just consider for example, cars. Other than the rubber components, every raw material is imported. So commodities to make the steel, or copper components (electronics), plastics should get relatively cheaper.

I am trying to think of an export industry in Thailand that is completely domestic in origin, and the only one I can come up with is say agriculture or rubber(a form of agriculture). But then the raw materials for the fertiliser, for example are imported.

Edited January 25, 201313 yr by Thai at Heart

BoT sees no attack on Thai baht by foreign investors

By Digital Media

BANGKOK, Jan 25 – The Bank of Thailand (BoT) has reaffirmed that it sees no sign of attacks on the Thai baht or currency manipulation in the local market as feared in some business quarters.

BoT Governor Prasarn Trairatvorakul said there has been an increase in inflow of short-term funds from overseas to make profit as normal but not speculation.

He met with Prime Minister Yingluck Shinawatra and several Cabinet members on Thursday to update them on the latest currency situation and concerns on the appreciating Thai baht.

Foreign investors have been cautious and closely monitored Thailand’s economic fundamentals as well as the price earning ratio, Mr Prasarn said, reporting that foreign funds totalling US$2 billion or Bt59 billion flowed into the country in the first two weeks of this month.

Short-term investment reflected foreign investor hesitation on the direction of the Thai baht, he pointed out.

The BoT governor said the Thai currency has appreciated by 3 per cent this year and 5-6 per cent last year.

He said the baht movement has been in tandem with regional currencies and yet, weaker than some currencies--including the Korean won which is 9 per cent stronger and the Philippine peso which appreciated 7 per cent.

The Federation of Thai Industries (FTI) and Board of Trade of Thailand will discuss with the BoT next week to jointly evaluate the impact of the stronger Thai baht towards Thailand’s business sector, he said, adding that the prime minister may be asked to assist business sectors impacted by the strengthened Thai currency.

FTI President Payungsak Chartsuthipol said FTI members will meet today to discuss proposals for assistance from the government in connection with the baht appreciation.

The meeting is a precursor of next week’s discussion with the BoT, he said, urging the central bank to ensure that the baht's movement corresponds with regional currencies. (MCOT online news)

-- TNA 2013-01-25

From the beginning of last year to date, the baht has appreciated about 5-6 per cent, while South Korea's won strengthened 9 per cent, he said. The Philippine peso appreciated 7 per cent, while the Singapore dollar and Malaysian ringgit appreciated 5-6 per cent.

Thats less than some other regional currencies?

I just checked and see that the NZ $ has risen against the Baht since I last transfered money to TL.

So what has the Baht risen against?

Isn't the Central Bank rate 2.75% in Thailand? Well, plenty of scope to cut it. Imports versus exports is a delicate balance. Basically, all of Thailand's oil is imported, which is used for just about every industrial process one way or another. Plus, there is virtually no raw materials in the country, so everything that is manufactured here, relies on imported raw materials, so take with one and give with the other. Just consider for example, cars. Other than the rubber components, every raw material is imported. So commodities to make the steel, or copper components (electronics), plastics should get relatively cheaper.

I am trying to think of an export industry in Thailand that is completely domestic in origin, and the only one I can come up with is say agriculture or rubber(a form of agriculture). But then the raw materials for the fertiliser, for example are imported.

Minerals produced in Thailand

Product Antimony Barite Diatomite Feldspar Gold Gypsum Hydraulic Cement Industrial Sand And Gravel (Silica) Iron Ore Kaolin Quicklime And Hydrated Lime, Including Dead-Burned Dolomite Raw Steel Tin Tungsten Zinc

Graph Production

Unit of Measure

Edited January 25, 201313 yr by dcutman

Isn't the Central Bank rate 2.75% in Thailand? Well, plenty of scope to cut it. Imports versus exports is a delicate balance. Basically, all of Thailand's oil is imported, which is used for just about every industrial process one way or another. Plus, there is virtually no raw materials in the country, so everything that is manufactured here, relies on imported raw materials, so take with one and give with the other. Just consider for example, cars. Other than the rubber components, every raw material is imported. So commodities to make the steel, or copper components (electronics), plastics should get relatively cheaper.

I am trying to think of an export industry in Thailand that is completely domestic in origin, and the only one I can come up with is say agriculture or rubber(a form of agriculture). But then the raw materials for the fertiliser, for example are imported.

Minerals produced in Thailand

Product Antimony Barite Diatomite Feldspar Gold Gypsum Hydraulic Cement Industrial Sand And Gravel (Silica) Iron Ore Kaolin Quicklime And Hydrated Lime, Including Dead-Burned Dolomite Raw Steel Tin Tungsten Zinc

Graph Production

Unit of Measure

Ah, yes, Saraburi and mining. Ok, that's one. Would be interesting to know what domestic iron ore production for say iron and steel production is. I think it is absolutely miminal.

As an example

Currently, Thailand imports 0.47 megatons (470,000 tons) of metal from Japan annually under a quota through the Japan-Thailand Economic Partnership Agreement (JTEPA)

http://www.thaitradeusa.com/home/?p=2368

Edited January 25, 201313 yr by Thai at Heart

Industrialists tell central bank to intervene in strong Thai baht.

By Digital Media

BANGKOK, Jan 25 - The Federation of Thai Industries (FTI) today called on the Bank of Thailand (BoT) to take action in cooling down the fluctuating and strengthening Thai currency which has severely hurt the private sector.

Jen Namchaisiri and Wallop Witnakorn, FTI vice presidents, said the private sector has felt the pinch from the rapidly appreciating baht - its strongest in the last 17 months.

The BoT should intervene if necessary while the Finance Ministry should speed up investment projects in infrastructure and rail systems, and importing arms and ammunition, they said.

They urged the government to support the private sector in their overseas investment by increasing the outflow cash limits.

BoT Governor Prasarn Trairatvorakul said earlier that the Thai currency has appreciated by 3 per cent since the beginning of this year and 5-6 per cent since last year, and that the baht movement has been in tandem with regional currencies.

The BoT and FTI are scheduled to meet early next week to thrash out the private sector's concern on the appreciating Thai baht. (MCOT online news).

-- TNA 2013-01-25

From the beginning of last year to date, the baht has appreciated about 5-6 per cent, while South Korea's won strengthened 9 per cent, he said. The Philippine peso appreciated 7 per cent, while the Singapore dollar and Malaysian ringgit appreciated 5-6 per cent.

Thats less than some other regional currencies?

I just checked and see that the NZ $ has risen against the Baht since I last transfered money to TL.

So what has the Baht risen against?

US$,GBP. Euro, Swiss Franc.

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

+1

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

I've made some decent money just my moving my money here. Plenty are moving money here. Better interest rates, and better prospects for stocks longer-term. US/UK/EURO are in terminal decline compared to Asia. It's a bit cliche, but I think Asia's time as come. Western countries are loaded with debt, with an aging population. No way to pay back the debt either. USA/UK/EURO currencies could collapse big time against Asian currencies. The endgame is coming.

The vast majority of institutional money movements are speculation.

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

I've made some decent money just my moving my money here. Plenty are moving money here. Better interest rates, and better prospects for stocks longer-term. US/UK/EURO are in terminal decline compared to Asia. It's a bit cliche, but I think Asia's time as come. Western countries are loaded with debt, with an aging population. No way to pay back the debt either. USA/UK/EURO currencies could collapse big time against Asian currencies. The endgame is coming.

So in your opinion Thailand is not loaded with debt and still borrowing billions?

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

I've made some decent money just my moving my money here. Plenty are moving money here. Better interest rates, and better prospects for stocks longer-term. US/UK/EURO are in terminal decline compared to Asia. It's a bit cliche, but I think Asia's time as come. Western countries are loaded with debt, with an aging population. No way to pay back the debt either. USA/UK/EURO currencies could collapse big time against Asian currencies. The endgame is coming.

Disagree. The US markets have reached a 5-year high & stock markets in Europe are not doing too badly either. In addition the US is showing more & more signs of recovering from the sub-prime crisis. Payment of the debt is a separate issue & is long-term if it ever gets paid. Japan has the highest level of debt of all countries & it hasn't crashed like Greece, Spain etc.

Central banks can & are printing money at a steady rate & they can carry on indefinitely. The 'endgame' is not imminent & will probably be carefully manipulated, wiping out of most of the debt by a new take on derivative instruments.

The baht isn't soaring, this is bullshit.

The baht is stable on a 2 year scale against most currencies except the US Dollar and related currencies.

The Dollar knows a period of weakness, it's not the baht soaring.

But now the Japanese are opening their money supply, probably to race with the dollar on the way down, so this together with the USD poses a problem for the baht exports.

Thailand has already taken measures in form of the 300 baht minimum wage, which will unfold its effects in the next months, and the Bank of Thailand just has to lower its rates to keep up with the USD and JPY.

I really don't see what is so difficult.

Edited January 25, 201313 yr by manarak

No specualtion, no prostitution, no problems down South, no traffic in Bkk; No clue!

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

I've made some decent money just my moving my money here. Plenty are moving money here. Better interest rates, and better prospects for stocks longer-term. US/UK/EURO are in terminal decline compared to Asia. It's a bit cliche, but I think Asia's time as come. Western countries are loaded with debt, with an aging population. No way to pay back the debt either. USA/UK/EURO currencies could collapse big time against Asian currencies. The endgame is coming.

So in your opinion Thailand is not loaded with debt and still borrowing billions?

Currency movements are relative. Relatively to the west, and many countries in the region, Thailand debt level looks wonderful.

Money is sloshing into Asia looking for growth and interest rates.

I don't see why anyone is shocked about this.

I've made some decent money just my moving my money here. Plenty are moving money here. Better interest rates, and better prospects for stocks longer-term. US/UK/EURO are in terminal decline compared to Asia. It's a bit cliche, but I think Asia's time as come. Western countries are loaded with debt, with an aging population. No way to pay back the debt either. USA/UK/EURO currencies could collapse big time against Asian currencies. The endgame is coming.

So in your opinion Thailand is not loaded with debt and still borrowing billions?

Currency movements are relative. Relatively to the west, and many countries in the region, Thailand debt level looks wonderful.

Right so does Greece.

Yes Greece is at 150% off gdp with its government debt. The usa, uk and most of the eu are 75% plus with little or no growth and Thailand is 40 to 50% currently, with ok growth.

I lived and worked in Greece and it was obvious the place was screwed then. Does Greece have any industry at all anymore? Precisely what will save Thailand from storing up a mess is allowing the currency to make its value, unlike Greece now who are wedded to the Euro.

So your point is?

Edited January 25, 201313 yr by Thai at Heart

I spend alot of time in Thailand every year, and I don't buy anything anymore, I even eat at home alot more. Why should I spend when I can buy for less in other countries. every time you even go to a restaurant the VAT is included. Even service charge is included, (which I don't mind because I always tip well). Cambodia is cheaper and I have a friend in Myanmar that I stay with and way cheaper than Thailand...and it's just only opening up. bye..bye Thailand for my hard earned money.

Isn't the Central Bank rate 2.75% in Thailand? Well, plenty of scope to cut it. Imports versus exports is a delicate balance. Basically, all of Thailand's oil is imported, which is used for just about every industrial process one way or another. Plus, there is virtually no raw materials in the country, so everything that is manufactured here, relies on imported raw materials, so take with one and give with the other. Just consider for example, cars. Other than the rubber components, every raw material is imported. So commodities to make the steel, or copper components (electronics), plastics should get relatively cheaper.

I am trying to think of an export industry in Thailand that is completely domestic in origin, and the only one I can come up with is say agriculture or rubber(a form of agriculture). But then the raw materials for the fertiliser, for example are imported.

The only industry that is domestic in nature is the tourist industry and all the women that go with it. Everything else, I will agree is imported, quality not withstanding

I spend alot of time in Thailand every year, and I don't buy anything anymore, I even eat at home alot more. Why should I spend when I can buy for less in other countries. every time you even go to a restaurant the VAT is included. Even service charge is included, (which I don't mind because I always tip well). Cambodia is cheaper and I have a friend in Myanmar that I stay with and way cheaper than Thailand...and it's just only opening up. bye..bye Thailand for my hard earned money.

Don't let the door hit you on the way out, pal.

Having read your pig-headed, bigoted post on the "police extorting mall vendor" thread, I really don't think the Thai locals, tourists or expats are going to miss you.