Finance Minister Kittiratt Rules Out Capital Control Measures On Thai Baht

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SURGING CURRENCY

Kittiratt rules out capital control measures on baht

SUPHANNEE POOTPISUT

THE NATION

BANGKOK: -- Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong yesterday insisted the government would not introduce capital-control measures despite the continued influx of foreign capital, which has caused the baht's recent appreciation.

After a discussion between Prime Minister Yingluck Shinawatra and her economic team, Kittiratt said the government had the necessary tools without the need for new tax measures that could affect returns on investment.

While Thailand has seen a large amount of capital flowing into the stock and bond markets, such capital inflows could be short term due to high market liquidity, according |to the Bank of Thailand.

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"I insist that the government will not use control measures for capital movement, as we are an open country. The mechanism has to be normal," Kittiratt said.

The government is proceeding with its usual strategy of medium- and long-term measures, including the promotion of Thai businesses' investments overseas. This could lessen pressure from the strengthening baht, according to the National Economic and Social Development Board.

However, as the long-term measures would not have an effect on current short-term capital movements, yesterday's meeting agreed that there should be a discussion on the need for monetary measures related to short-term capital inflows, which it acknowledged did contain risks.

"It has to be [a matter for] monetary policy management. I have been assigned to discuss this soon with the Bank of Thailand governor, the Monetary Policy Committee and others related to the issue. I insisted that the eligibility and duty for monetary decision-making belonged to the BOT and the MPC," said the deputy PM.

Baht volatility is a concern as it has affected the business sector, he said, adding that stability is needed.

Small- and medium-sized exporters are facing more difficulties as a result of the unit's appreciation, he said. The premier and the economic team yesterday also discussed the state of the global economy and the impact of the minimum-wage hike on the economy and the business sector.

The Fiscal Policy Office expects the Thai economy to register 5-per-cent growth this year, on the assumption that exports will expand by 10 per cent. The baht's recent rise has yet to affect economic growth, given that it has moved within the office's estimated range.

The agency estimated an average baht value this year of 30.70 per US dollar, moving within a range of 29.70 to 31.70. It also estimated that last year's economic growth came in at 5.7 per cent.

-- The Nation 2013-01-31

[Locationthailand]

A free floating Baht without restrictions will find it's own level in global competition If exports decline due to currency strength it will have its own leveling affect on controlling the economy.

[Thai at Heart]

A free floating Baht without restrictions will find it's own level in global competition If exports decline due to currency strength it will have its own leveling affect on controlling the economy.

Exactamundo

[jamhar]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

[Ricardo]

"The mechanism has to be normal." Kittiratt said.

So why bother to have a mechanism at all ? Let it float, and capital-transfers in/out flow totally freely, then.

The continued influx of foreign capital, which has caused the Baht to strengthen, is surely because Thai interest-rates are overly-attractive, compared to other Asian or developed-economies ? So isn't the solution to cut Thai interest-rates instead ?

[Thai at Heart]

"The mechanism has to be normal." Kittiratt said.

So why bother to have a mechanism at all ? Let it float, and capital-transfers in/out flow totally freely, then.

The continued influx of foreign capital, which has caused the Baht to strengthen, is surely because Thai interest-rates are overly-attractive, compared to other Asian or developed-economies ? So isn't the solution to cut Thai interest-rates instead ?

Exactly

[PoorSucker]

Off topic posts deleted.

This thread is not about US economy

[MaxLee]

Let the white lies continue....

[Bpuumike]

Why should Thailand, and most of the South East Asian countries, join the race to currency devaluation?

It might hurt we expats transferring other currencies in but good to see some stability, unless Ms. Y/T goes the QE route.

[davidstipek]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

Edited January 31, 2013 by davidstipek

[rekkie]

Just when it all seems to settle we will then get another shock from this country that will mix it all up again.

I predict no level will be found and the currency will gradually appreciate until the next disaster.

There again my crystal ball could be lying?!

[stoli]

"The mechanism has to be normal." Kittiratt said.

So why bother to have a mechanism at all ? Let it float, and capital-transfers in/out flow totally freely, then.

The continued influx of foreign capital, which has caused the Baht to strengthen, is surely because Thai interest-rates are overly-attractive, compared to other Asian or developed-economies ? So isn't the solution to cut Thai interest-rates instead ?

Exactly

I have to agree completely. Everything my stockbroker in the US does for me relates to oversea funds, and even some great money to be earned on Thai bonds. Far more than they could ever get in the US right now. The US stock market is growing right now not based on the performance of the US, but on the performance of Asia. A lot of this has to do with countries like Thailand that is a manufacturing country. On a side note, I hope the minimum wage increase does not move companies out of Thailand and into Cambodia or Vietnam for cost savings, but it seems likely.

[Thai at Heart]

"The mechanism has to be normal." Kittiratt said.

So why bother to have a mechanism at all ? Let it float, and capital-transfers in/out flow totally freely, then.

The continued influx of foreign capital, which has caused the Baht to strengthen, is surely because Thai interest-rates are overly-attractive, compared to other Asian or developed-economies ? So isn't the solution to cut Thai interest-rates instead ?

Exactly

I have to agree completely. Everything my stockbroker in the US does for me relates to oversea funds, and even some great money to be earned on Thai bonds. Far more than they could ever get in the US right now. The US stock market is growing right now not based on the performance of the US, but on the performance of Asia. A lot of this has to do with countries like Thailand that is a manufacturing country. On a side note, I hope the minimum wage increase does not move companies out of Thailand and into Cambodia or Vietnam for cost savings, but it seems likely.

There isn't much evidence of a wholesale move yet. Some industries such as textiles may come under some pressure, but Thailand also produces a lot of synthetic materials, and logistics are better in Thailand. It's possible of course, but as yet, not apparent.

[scotbeve]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

Were you here in 1997???? WOW!!!!! made a mini-fortune... ahhhh...errrm... when they "closed" the inlets of foreign funds....

[Ricardo]

Why should Thailand, and most of the South East Asian countries, join the race to currency devaluation?

It might hurt we expats transferring other currencies in but good to see some stability, unless Ms. Y/T goes the QE route.

Why devalue the currency ?

1. Because an over-strong Baht hurts Thai exports, including the public-owned rice-mountain (or is it a mountain-range ? ).

2. Because Thai interest-rates are higher-than-need-be, and the government is about to float trillions-of-Baht in loans, perhaps ?

I recall the good-old-days, when US-president Ronald Reagan stated that an over-strong currency was a sign of how well the economy was doing, and look where that eventually led them to !

[davidstipek]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

Were you here in 1997???? WOW!!!!! made a mini-fortune... ahhhh...errrm... when they "closed" the inlets of foreign funds....

Now you get the picture Hundreds became Thousands, a couple of times. Once I believe when Baht was in mid 40's. If it didn't work for anyone else... it worked for me. I just want to see how strong it gets then Sell/Buy!

[khunken]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

Were you here in 1997???? WOW!!!!! made a mini-fortune... ahhhh...errrm... when they "closed" the inlets of foreign funds....

Now you get the picture Hundreds became Thousands, a couple of times. Once I believe when Baht was in mid 40's. If it didn't work for anyone else... it worked for me. I just want to see how strong it gets then Sell/Buy!

You need to be careful with your strategy. At the moment Thailand has relatively loose capital controls with no overt maximum amounts. However, according to my bank, they will only allow up to B40,000 to be transferred abroad at one time. Admittedly exporting Thai Baht is not a concern right now, but Thailand does have a record of imposing capital transfers.

You can, of course, speculate on FX markets overseas.

[Thai at Heart]

Why should Thailand, and most of the South East Asian countries, join the race to currency devaluation?

It might hurt we expats transferring other currencies in but good to see some stability, unless Ms. Y/T goes the QE route.

Why devalue the currency ?

1. Because an over-strong Baht hurts Thai exports, including the public-owned rice-mountain (or is it a mountain-range ? ).

2. Because Thai interest-rates are higher-than-need-be, and the government is about to float trillions-of-Baht in loans, perhaps ?

I recall the good-old-days, when US-president Ronald Reagan stated that an over-strong currency was a sign of how well the economy was doing, and look where that eventually led them to !

Funny that. At the end of the 2nd world war, Germany Marks weren't worth diddly squat, and yet they have ridden an ever strengthening currency to create an export powerhouse, while say, British industry has moaned about how strong the pound was.

The value of a currency, is the value of a currency. It has been shown over and over again, that fixing it can lead to massive pressures one way or another, i.e. Thailand, Argentina, and it is better to let it find its level. Just look at Greece. The only way they can hope to save the country is to get out of the Euro and devalue, just like Thailand did in 97. Instead they are stuck with the euro and will be in a mess for a very very long time.

[davidstipek]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

Were you here in 1997???? WOW!!!!! made a mini-fortune... ahhhh...errrm... when they "closed" the inlets of foreign funds....

Now you get the picture Hundreds became Thousands, a couple of times. Once I believe when Baht was in mid 40's. If it didn't work for anyone else... it worked for me. I just want to see how strong it gets then Sell/Buy!

Yes I know this. Using more than one Bankbook @ more then one Bank... and not doing the process all in one day... has It's rewards. Like the Easter Bunny putting all his eggs in one basket could be dangerous if he was tripped! You are limited the ammount to transfer at "ONE" time... from one account... from one Bank... You can if they are notified move more then the sum you quoted

[Arjay]

If they are talking about you can be sure "capital controls" will be next. All western central banks are bent on destroying their "fiat" currencies to pay back huge deficits. It's all just paper. Only gold is real!

[crazykopite]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

walk into the bank and ask for 200,000 US $ bet youir waiting to get it for ever and a day !!!!!!!!!!!

[davidstipek]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

walk into the bank and ask for 200,000 US $ bet youir waiting to get it for ever and a day !!!!!!!!!!!

This is crazy! I am not going to walk into any Thai Bank and ask for 200,000 USD,ASP! If I managed my deposits correctly. I could walk into any amount of Thai Banks where I have accounts and ask to have documents ready to two days to transfer any amount of funds to their Offshore Accounts. I am sure that in weeks time. I could have any amount total at my disposal I desired. Not an issue! These transfer limits are based on Daily Fund Transfer limit figures!

Edited February 1, 2013 by davidstipek

[davidstipek]

Someone should make a tidy sum by selling b vs dollar or euro.

and then again reverse once the b stabilizes.

I wonder who could do that?

In a country with corruption problems,

these kind of questions arise.

On that note,

In a largely agricultural country

with a trending trade deficit (tradingeconomics.com/thailand/balance-of-trade)

how can you have a currency that trading up against other currency?

Is it the tourist dollars making up the difference?

Which is why i'm a EE and not a finance guy!

Hmmm...

I get it transfer all my funds to Thailand (which I have done) when it was 40+ Baht to Dollar... Now wait until it looks to be its lowest and rebuy USD's (Thousands) then when it gets to 31+ range again rebuy Thai Baht.

Wow safer then Stock Market! and why not use the Gravy Train also?? No Thai Law says I can't?? Let Thailand pay me to live here...

Hey if it is legal for banks to do this.... using our money! Why can't we just do it without their help!!!

Were you here in 1997???? WOW!!!!! made a mini-fortune... ahhhh...errrm... when they "closed" the inlets of foreign funds....

Now you get the picture Hundreds became Thousands, a couple of times. Once I believe when Baht was in mid 40's. If it didn't work for anyone else... it worked for me. I just want to see how strong it gets then Sell/Buy!

Just keep your funds here... and when Baht goes to 2X.XX again buy Gold.... when it gets in the hugh 30s or even 40s sell your gold.... Money never leaves Thailand, Plus Gold Merchant in China Town will gladly take your Debt/Credit Card... As long as your Card is accepted for the transaction... They don't care! Plus Bank only see a Purchase!!!

Edited February 15, 2013 by davidstipek