Baht Moving Beyond Fundamentals: Bank Of Thailand

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Baht moving beyond fundamentals: BOT
The Nation



BANGKOK: -- The Thai baht is advancing well above its fundamentals, conceded Bank of Thailand Governor Prasarn Trairatvorakul on Friday.

At 8.18am, the currency hit a new 16-year high at 28.71 per dollar, gaining 2.02 per cent from end-March, according to Bank of Thailand data. At one point, it touched 28.68. This indicates the 6 per cent increase from the end of last year.

Month to date, the currency also gained 6.40 per cent against Japanese yen, at 29.26 per 100 yen. It also appreciated by 0.17 per cent against euro to 27.478.

Prasarn said today that the currency is strengthening above the economic fundamentals.

He did not elaborate further or mention any measure the contain the appreciation.

Prasarn had a meeting with the prime minister and economic government units on April 18. He said that the agenda was mainly about the export target, not about the exchange rates.


-- The Nation 2013-04-19

THAI BAHT ALERT:

Latest Thai Baht exchange rates http://baht.thaivisa.com

[WilliamTaylor]

"He did not elaborate further or mention any measure the contain the appreciation."
Are the proofreaders still on Songkran holiday?

[Thai at Heart]

Well he has one.

Cut interest rates. In the other paper, it says they are going to tighten up qualification for loans for construction.

Cue a cut in interest rates

[Pormax]

Surely they have to do something soon.

It is not just the expats, just about all nationalities, which are being hit hard but the businesses that trade with overseas companies could find it getting rough with their customers seeking cheaper suppliers.

Inevitably it will hit the tourist areas with people who come here for a holiday and the ex-pat living off his pensions, finding their currency is no longer enough due to a 10 -25% loss in value in the last 6 months. Yes most expatswill stay and touristswill still come to Thailand but less Baht means less goods being bought.

This is made worse by inflation here which has been quite noticeable over the past year.

Will not hold my breath though, the powers that be in the Thai government will continue to do the same as always, talk but no action.

[connda]

Surely they have to do something soon.

It is not just the expats, just about all nationalities, which are being hit hard but the businesses that trade with overseas companies could find it getting rough with their customers seeking cheaper suppliers.

Inevitably it will hit the tourist areas with people who come here for a holiday and the ex-pat living off his pensions, finding their currency is no longer enough due to a 10 -25% loss in value in the last 6 months. Yes most expatswill stay and touristswill still come to Thailand but less Baht means less goods being bought.

This is made worse by inflation here which has been quite noticeable over the past year.

Will not hold my breath though, the powers that be in the Thai government will continue to do the same as always, talk but no action.

The Banksters are making money hand over fist. The politicians who support them are too.

The hell with everyone else.

Welcome to the New World Order paradigm.

[Arkady]

Surely they have to do something soon.

It is not just the expats, just about all nationalities, which are being hit hard but the businesses that trade with overseas companies could find it getting rough with their customers seeking cheaper suppliers.

Inevitably it will hit the tourist areas with people who come here for a holiday and the ex-pat living off his pensions, finding their currency is no longer enough due to a 10 -25% loss in value in the last 6 months. Yes most expatswill stay and touristswill still come to Thailand but less Baht means less goods being bought.

This is made worse by inflation here which has been quite noticeable over the past year.

Will not hold my breath though, the powers that be in the Thai government will continue to do the same as always, talk but no action.

Seems like a good opportunity to boost the domestic economy and depend less of exports of goods and services (mainly tourism).

It is up to the Bank of Thailand, not the government. Much of the inflow is into to domestic bond auctions. Easy enough to temporarily tax or restrict foreigners buying bonds without reducing rates, which might cause overheating elsewhere in the economy, or affecting the stock market.

Edited April 19, 2013 by Arkady

[easyozzi]

Talk, talk, talk, talk, talk, talk, talk, talk, talk .......... where is the action ?

Would the last person out of Thailand, please turn the lights off

[TheGhostWithin]

Surely they have to do something soon.

Inevitably it will hit the tourist areas with people who come here for a holiday and the ex-pat living off his pensions, finding their currency is no longer enough due to a 10 -25% loss in value in the last 6 months. Yes most expatswill stay and touristswill still come to Thailand but less Baht means less goods being bought.

This is made worse by inflation here which has been quite noticeable over the past year.

Will not hold my breath though, the powers that be in the Thai government will continue to do the same as always, talk but no action.

I second this. As a regular visitor to the Kingdom (my girlfriend resides permanently with me here but we go home to visit her family from time to time, and it gives me a break from work), we do not travel on a fixed schedule - we are not business travelers but do spend a lot, we stay in good places and spend what we work hard for at home. I would imagine we are not the only ones with this kind of approach to visits to Thailand.

We are currently sitting at home each day, watching the exchange rate waiting for it to straighten up before we return. the NZ Dollar (where we are from) has been one of the top performers in the world the past year) has also been losing ground against the baht, and I have noticed travel agents here have stopped advertising Thailand and started advertising Malaysia (again) and also now Vietnam and South America.

Inflation will increase even more when the tourists stop - as you know in Thailand when purchase numbers decrease, Thai business ramps up its price to cover the shortfall. More tough times for the Thai economy? Sadly, me thinks so. May be a while before Teerak brings "the Farang" home to say hello to paw me.. We are considering a trip to Nepal this year to do some trekking instead.

[Gassit]

The strengthening of the baht is not primarily of Thailand's making. The US, Japan and other countries printing lots of money to stimulate their economies - call it quantitative easing or whatever - is a major factor behind this. Falling exchange rates also increase the export competitiveness of the big boys in what is effectively an exchange rate war.

Due to lack of financial scale Thailand and many other smaller economies - can do little to protect themselves and their own export industries in the face of this onslaught - until/if/when other countries' policies begin to change - the baht will remain strong.

[cheesyd]

Please note: Before making any comments on a thread involving monetary policy, posters are advised to read Not The Nation's excellent 'Stock Market Correction Delights Poorest, Stupidest Expats'

[Naam]

Please note: Before making any comments on a thread involving monetary policy, posters are advised to read Not The Nation's excellent 'Stock Market Correction Delights Poorest, Stupidest Expats'

priceless! delicious! on the dot!

[LALes]

Its a race to the bottom to see which country can become more 3rd World. In the New World Order, its more important to have

your currency be as sh**ty as possible to maintain your exports. The US is doing a good job of it, but its still early in the game.

[davejones]

Surely they have to do something soon.

It is not just the expats, just about all nationalities, which are being hit hard but the businesses that trade with overseas companies could find it getting rough with their customers seeking cheaper suppliers.

Inevitably it will hit the tourist areas with people who come here for a holiday and the ex-pat living off his pensions, finding their currency is no longer enough due to a 10 -25% loss in value in the last 6 months. Yes most expatswill stay and touristswill still come to Thailand but less Baht means less goods being bought.

This is made worse by inflation here which has been quite noticeable over the past year.

Will not hold my breath though, the powers that be in the Thai government will continue to do the same as always, talk but no action.

The Banksters are making money hand over fist. The politicians who support them are too.

The hell with everyone else.

Welcome to the New World Order paradigm.

I'm not a banker or a politician, but I'm still making money. So are millions of others.

[davejones]

Please note: Before making any comments on a thread involving monetary policy, posters are advised to read Not The Nation's excellent 'Stock Market Correction Delights Poorest, Stupidest Expats'

LOL. Shows just how stupid many expats on ThaiVisa are. That article makes them look really stupid indeed.

[Naam]

Please note: Before making any comments on a thread involving monetary policy, posters are advised to read Not The Nation's excellent 'Stock Market Correction Delights Poorest, Stupidest Expats'

LOL. Shows just how stupid many expats on ThaiVisa are. That article makes them look really stupid indeed.

it's not the article Dave. some of the posters make themselves look really stupid. and it goes on since i joined Thaivisa 6½ years ago. sometimes it's amusing, quite often it is not when other TV-members are asking for advice and/or assistance and get plainly bullxxxxxed.

Edited April 19, 2013 by metisdead

[crazykopite]

The rich are getting richer by shipping out there baht to overseas banks whilst the poor suffer due to high inflation and increase costs. As an expat yes I to am suffering as my money comes from the UK but hey iot is still a better life over here than back in the UK problem is I do not spend as much as I used to which in turn has an effect on local business where I do my shopping so it is swings and roundabouts !!!!!!!!!

[belg]

20% value for your euros ... everything getting more expensive (thanks to the no brain wage hike) .. thailand still a good value for money? i guess NOT

[MobileContent]

I am getting paid a good amount every month in Baht and also I do invoice in USD it is fixed at Baht 30 per dollar for the year 2013. Last year it was also fixed at Baht 30 per dollar but I am not worried at all.

Next year is a different story but for the time being I am not worried at all.

[Naam]

The rich are getting richer by shipping out there baht to overseas banks whilst the poor suffer due to high inflation and increase costs. As an expat yes I to am suffering as my money comes from the UK but hey iot is still a better life over here than back in the UK problem is I do not spend as much as I used to which in turn has an effect on local business where I do my shopping so it is swings and roundabouts !!!!!!!!!

for the record: if the rich would ship out their Baht to overseas banks the Baht would fall, not strengthen.

this lesson is free of charge!

[GeorgeO]

"He said that the agenda was mainly about the export target, not about the exchange rates".

I'm just a little puzzled as to how you can have a discussion about export targets without referring directly to international exchange rates...?

[mrfill]

The strengthening of the baht is not primarily of Thailand's making. The US, Japan and other countries printing lots of money to stimulate their economies - call it quantitative easing or whatever - is a major factor behind this. Falling exchange rates also increase the export competitiveness of the big boys in what is effectively an exchange rate war.

Due to lack of financial scale Thailand and many other smaller economies - can do little to protect themselves and their own export industries in the face of this onslaught - until/if/when other countries' policies begin to change - the baht will remain strong.

Japan has been using QE for 20 years now - the US and UK for 5 years - it has not suddenly started. End of December the rate was nearly 50Bt to the pound and now it is 43Bt - that is 14% in less than 4 months.

The Thai economy (based on GDP) is around #30 in the world so is not that small, but is viewed as very strong - possibly because it actually produces goods rather than creating income by financial wheeler-dealing. Manufacturing countries (particularly those that have good exports) will always be a better long term bet.

The banks/government are allowing the Baht to rise so they can boost their foreign currency reserves but it is going too fast. If they raise interest rates, more money will flow in and the rate will go even higher. If they drop interest rates (currently 3%) to match other countries it should stabilise things in the short term but could well create higher inflation. Its the same problem China has.

[Gassit]

Please note: Before making any comments on a thread involving monetary policy, posters are advised to read Not The Nation's excellent 'Stock Market Correction Delights Poorest, Stupidest Expats'

Thanks - oblique to monetary policy - but enlightening indeed. Mostly as an insight into the thinking process of some who tar all expats with the same (stupid) brush?

[fletchsmile]

As someone pointed out above, the problem is more that the major currencies such as USD, EUR, JPY, GBP are all weakening, due to the economic issues they are facing, and policies to deal with it. They are deliberately maintaining low interest rates, QE, encouraging weak currencies and so on.

A traditional measure would be for Thailand to cut interest rates to weaken its currency. Unfortunately this risks increasing inflation. Other govt factors have already stoked the inflation fire.

So the government are stuck with the lesser of two evils.

Also to be remembered that when the major countries and currencies are actively manipulating their markets and currencies, Thailand simply doesn't have the firepower to move things in the opposite way. USD, EUR, GBP etc have all been weakening, Thailand can't fight these easily with the resources it has.

Fletch

Edited April 19, 2013 by fletchsmile

[Fullstop]

As someone who lives, works and gets paid in Baht here and makes online purchases from overseas ... I'm not worried.

Edited April 19, 2013 by Fullstop

[MrWorldwide]

OK - the doomsayers from earlier threads may have a point. When the strengthening baht started to bite retirees a couple of months back, i maintained that it was simply part of a cycle that would correct itself - most of us have suffered peaks and troughs over the years - and that may still prove to be the case. What I failed to appreciate, though, was the extent to which the baht has gained ground on its neighbours - the Yen's woes and South Korean political issues notwithstanding, I cant see how the baht is in a 'happy place' next to its competitors and trading partners in the region. This is the same situation Australian exporters found themselves in when our dollar leapt from parity with the USD to ridiculous levels approaching 1.08 USD - ask our car companies what that does for the ability to compete with the Koreans in our own market,.much less overseas. Holden and Ford are basically screwed without more taxpayer bailouts.

I spent some time on xe.com looking at the '1 year' graphs - I couldn't find a single currency which has held its value against the baht in 2013 - not even the Malaysian Ringgit. I'll leave it to the day traders to explain why the market is continuing to buy the baht whilst I try to find a better crystal ball ....

[firestar]

Talk, talk, talk, talk, talk, talk, talk, talk, talk .......... where is the action ?

Would the last person out of Thailand, please turn the lights off

Yes, as demonstrated by the record breaking (again) number of retirement Visa applications people are leaving Thailand in their droves

[MrWorldwide]

As someone who lives, works and gets paid in Baht here and makes online purchases from overseas ... I'm not worried.

Let me guess - your continued employment has nothing to do with Thailand's ability to compete ? I'm not an economist, but common sense tells me there is a tipping point - I guess we will know by the 3rd quarter of 2013.

[mrfill]

As someone who lives, works and gets paid in Baht here and makes online purchases from overseas ... I'm not worried.

Your smugness may turn to anguish if rampant inflation occurs or if/when the currency speculators decide its time to cash in and sell their Bt.

[MrWorldwide]

Talk, talk, talk, talk, talk, talk, talk, talk, talk .......... where is the action ?

Would the last person out of Thailand, please turn the lights off

Yes, as demonstrated by the record breaking (again) number of retirement Visa applications people are leaving Thailand in their droves

To be fair, one TVer did actually post that he is leaving Thailand. Apparently he owes his landlady some 14 months back rent, but that's irrelevant - he's pulling out and taking his stamp collection with him

[swisstree]

If i am correct, in November 2009, it was the exact same situation (Eur/Thb at 37.5).

I can't recall, was it a big issue then?