B O T Warns Thais To Prepare For Future Fluctuation Of Baht

[webfact]

BoT warns Thais to prepare for future fluctuation of baht

BANGKOK, 5 June 2013 (NNT) – The Bank of Thailand (BoT) has warned the country regarding the fluctuation of the Thai currency, reasoning that the baht has been appeciating against other currencies since the beginning of this year even though its value has dropped slightly recently, thanks to the bank’s interest rate policy.

According to the BoT, capital outflow in May has caused the Thai baht to depreciate. the Bank is urging all investors to be cautious and keep a close watch on the currency situation, adding that the baht could be volatile, moving up and down every day.

The bank said the factor behind the devaluation of baht was the cut in the policy interest rate by 0.25 percent. The interest rate cut was an attempt to bolster economic growth.

The BoT also said the Chinese economy has begun to slow down, expanding only 7.7 percent in the first quarter of 2013, adding that the lower-than-expected growth could affect investors’ confidence in the second quarter, and will likely have a negative impact on the entire region as all Asian countries are connected.


-- NNT 2013-06-05

[Thait Spot]

I think he's just spelling things out for Kittirat and his cohorts rather than the Thai people who, bless them, are blissfully unaware of coins beyond the Baht

[Huayrat]

Like like like like hope it goes in freefall bigtime

[chiang mai]

So the Baht weakened because of the interest rate reduction and because of capital outflows, logically we could assume that the one is the result of the other. Alternatively we could assume that the rate cut had nothing to do with the depreciation and that this resulted solely from capital outflows which are taking place all over Asia and elsewhere as as the fear of an end to QE plays on the nerves of markets.

[Thai at Heart]

Didn't it go up and down every day, just like every day?

What the hell is this press release for? Please be aware that currencies go up and down? Thanks for that.

[chiang mai]

Didn't it go up and down every day, just like every day?

What the hell is this press release for? Please be aware that currencies go up and down? Thanks for that.

The press release is BOT code to Thai's, what it really says is that we've done a great job and looked out for your interests by cutting the rates but we can't guarantee that the Baht wont deppreciate significantly in the comming weeks, we just wanted to warn you.

[ricku]

Like like like like hope it goes in freefall bigtime

That would be great. Not just for me and you, but for the tourism as well.

A strong baht only scares people away.

Edited June 5, 2013 by ricku

[chiang mai]

Like like like like hope it goes in freefall bigtime

That would be great.

For you, yes, for Thailand, no.

[Thai at Heart]

Like like like like hope it goes in freefall bigtime

That would be great. Not just for me and you, but for the tourism as well.

A strong baht only scares people away.

Yup, looking forward to watching the petrol prices rise asap. This is a double edged sword for Thailand.

[ricku]

Like like like like hope it goes in freefall bigtime

That would be great.

For you, yes, for Thailand, no.

I suggest you rethink your comment, and perhaps read my edited post. Edited June 5, 2013 by ricku

[AnotherOneAmerican]

He thinks the baht is about to go into freefall, and wants to be on record as the guy that warned everyone.

Don't mention the loan the country can't get (too risky), the enormous amounts of money they lost in the rice scheme, or the elephant in the room.

[Thai at Heart]

He thinks the baht is about to go into freefall, and wants to be on record as the guy that warned everyone.

Don't mention the loan the country can't get (too risky), the enormous amounts of money they lost in the rice scheme, or the elephant in the room.

I would think the chances of getting the finance for all their pet projects are getting slimmer and slimmer. They can't even tell the truth to Moody's. Why on earth would any private lenders get involved after that?

This is like watching a kid squirm all the way through school holidays knowing that his school report is at the bottom of his bag, whilst the parents wait for it to be delivered by post. It's coming one way or another.

Edited June 5, 2013 by Thai at Heart

[arthurwait]

Surely even 5 year olds know the baht will plummet and the reasons for it and the real reasons it was pushed so high.

[KonKorat]

for me i hope the baht goes down,i travel to Thailand a lot,soon i will retire there,i will get a lot more baht for my dollar

[Thai at Heart]

Surely even 5 year olds know the baht will plummet and the reasons for it and the real reasons it was pushed so high.

You suggesting someone was in cahoots with Bernanke to selfishly flood all the USD into Thailand alone?

[klubex99]

The recent strength of the baht has worked against Thailand's interests actually. With exports dwindling fast. Thailand is no longer anywhere near being the worlds largest supplier of jasmine rice, and Thai chilis in UK supermarkets actually from India. The baht strength has made importing things cheaper and this produces a huge one sided import/export deficit. Which means more money is flowing out than is coming in. That is no good for a country's economy.

Then you got the impact on tourism with other destinations looking a lot cheaper alternative. Then you have the expats who pull in their belts when the baht is strong and yet spend a lot more freely when it is weak.

Those are just the major points, then when you get into the macro-economics which have a compounded effect on an economy what you end up with is a mess in the making, and Thailand really needs to get its currency devalued if it wants to see an upturn in its position in the rest of the world.

Thailand is in a position to get out the third world status, but it has blown every chance, and the attitude that exists here says that it will never get out of being third world. Cambodia, Myanmar and Laos will get out of that lurid status long before Thailand can manage it.

[ricku]

for me i hope the baht goes down,i travel to Thailand a lot,soon i will retire there,i will get a lot more baht for my dollar

Exactly. The baht needs to go down.

Thais don't travel abroad anyway.. (some do, but they are so few.)

[Thai at Heart]

The recent strength of the baht has worked against Thailand's interests actually. With exports dwindling fast. Thailand is no longer anywhere near being the worlds largest supplier of jasmine rice, and Thai chilis in UK supermarkets actually from India. The baht strength has made importing things cheaper and this produces a huge one sided import/export deficit. Which means more money is flowing out than is coming in. That is no good for a country's economy.

Then you got the impact on tourism with other destinations looking a lot cheaper alternative. Then you have the expats who pull in their belts when the baht is strong and yet spend a lot more freely when it is weak.

Those are just the major points, then when you get into the macro-economics which have a compounded effect on an economy what you end up with is a mess in the making, and Thailand really needs to get its currency devalued if it wants to see an upturn in its position in the rest of the world.

Thailand is in a position to get out the third world status, but it has blown every chance, and the attitude that exists here says that it will never get out of being third world. Cambodia, Myanmar and Laos will get out of that lurid status long before Thailand can manage it.

I am glad you weren't my economics professor. The baht has been strengthening, but there is more money flowing out than coming in? Thank god it is weakening and the money is flowing back in????????

Thailand's economy is heavily biased towards exports, so the weakening baht should give them a bit of a boost, but huge amounts of oil and inputs to make these exports have to be imported. I wouldn't wait for the drop in the baht to help rice exports one tiny bit, it has been bought wayyyyy over value. Then beyond that, lets wait to see where the petrol, bunker oil and gas prices go, if and when the baht does drop a bit, and inflation really takes off. Great......

mports in Thailand decreased to 21550.60 USD Million in April of 2013 from 21636.72 USD Million in March of 2013. Imports in Thailand is reported by the Ministry of Commerce. Historically, from 1991 until 2013, Thailand Imports averaged 8499.24 USD Million reaching an all time high of 24454.66 USD Million in March of 2012 and a record low of 2760 USD Million in February of 1992. Thailand imports mainly raw materials and intermediate goods (around 56 percent of total imports). Fuel accounts for 19 percent, parts of electronic appliances for 11 percent, materials of base metal for 9 percent, and chemicals for 5.5 percent. Machinery, equipment and supplies such as computers and mechanical represent 25 percent of total imports, and consumer goods account for 8 percent. Main import partners are Japan (20 percent of total imports), China (15 percent) and the European Union (8 percent). Others include the United Arab Emirates, Malaysia and the United States. This page includes a chart with historical data for Thailand Imports

http://www.tradingeconomics.com/thailand/imports

So you see, a huge amount of the inputs used to make the exports all just got a bit more expensive.

[Bellweather]

I think he's just spelling things out for Kittirat and his cohorts rather than the Thai people who, bless them, are blissfully unaware of coins beyond the Baht

I am with you on this as many years ago I tried to explain to my university educated GF why my pensions from overseas were being hammered by the exchange rates and she just could not grasp why the Baht value was never the same two months running. She had never been out of Thailand in her life and although she knew of different currency names around the world she never had to consider them in relation to her own.

The average Thai will pay no attention to this message from the BoT.

[soi41]

He thinks the baht is about to go into freefall, and wants to be on record as the guy that warned everyone.

Don't mention the loan the country can't get (too risky), the enormous amounts of money they lost in the rice scheme, or the elephant in the room.

I would think the chances of getting the finance for all their pet projects are getting slimmer and slimmer. They can't even tell the truth to Moody's. Why on earth would any private lenders get involved after that?

This is like watching a kid squirm all the way through school holidays knowing that his school report is at the bottom of his bag, whilst the parents wait for it to be delivered by post. It's coming one way or another.

Let,s get something straight here! The BOt governor is NOT politically elected, and have on many occasions opposed the governments populist policies!

[harryfrompattaya]

He thinks the baht is about to go into freefall, and wants to be on record as the guy that warned everyone.

Don't mention the loan the country can't get (too risky), the enormous amounts of money they lost in the rice scheme, or the elephant in the room.

He is taken his orders from Soros Soros told his close friends watch 60 baht to the dollar

[Thai at Heart]

He thinks the baht is about to go into freefall, and wants to be on record as the guy that warned everyone.

Don't mention the loan the country can't get (too risky), the enormous amounts of money they lost in the rice scheme, or the elephant in the room.

I would think the chances of getting the finance for all their pet projects are getting slimmer and slimmer. They can't even tell the truth to Moody's. Why on earth would any private lenders get involved after that?

This is like watching a kid squirm all the way through school holidays knowing that his school report is at the bottom of his bag, whilst the parents wait for it to be delivered by post. It's coming one way or another.

Let,s get something straight here! The BOt governor is NOT politically elected, and have on many occasions opposed the governments populist policies!

You talking to me???? I think you were meaning to talk to someone else who thinks that there has been some Thaksin conspiracy to push the baht up, and now back down again.

Edited June 5, 2013 by Thai at Heart

[Thai at Heart]

He thinks the baht is about to go into freefall, and wants to be on record as the guy that warned everyone.

Don't mention the loan the country can't get (too risky), the enormous amounts of money they lost in the rice scheme, or the elephant in the room.

He is taken his orders from Soros Soros told his close friends watch 60 baht to the dollar

Who is He?

[klubex99]

The recent strength of the baht has worked against Thailand's interests actually. With exports dwindling fast. Thailand is no longer anywhere near being the worlds largest supplier of jasmine rice, and Thai chilis in UK supermarkets actually from India. The baht strength has made importing things cheaper and this produces a huge one sided import/export deficit. Which means more money is flowing out than is coming in. That is no good for a country's economy.

Then you got the impact on tourism with other destinations looking a lot cheaper alternative. Then you have the expats who pull in their belts when the baht is strong and yet spend a lot more freely when it is weak.

Those are just the major points, then when you get into the macro-economics which have a compounded effect on an economy what you end up with is a mess in the making, and Thailand really needs to get its currency devalued if it wants to see an upturn in its position in the rest of the world.

Thailand is in a position to get out the third world status, but it has blown every chance, and the attitude that exists here says that it will never get out of being third world. Cambodia, Myanmar and Laos will get out of that lurid status long before Thailand can manage it.

I am glad you weren't my economics professor. The baht has been strengthening, but there is more money flowing out than coming in? Thank god it is weakening and the money is flowing back in????????

Thailand's economy is heavily biased towards exports, so the weakening baht should give them a bit of a boost, but huge amounts of oil and inputs to make these exports have to be imported. I wouldn't wait for the drop in the baht to help rice exports one tiny bit, it has been bought wayyyyy over value. Then beyond that, lets wait to see where the petrol, bunker oil and gas prices go, if and when the baht does drop a bit, and inflation really takes off. Great......

>mports in Thailand decreased to 21550.60 USD Million in April of 2013 from 21636.72 USD Million in March of 2013. Imports in Thailand is reported by the Ministry of Commerce. Historically, from 1991 until 2013, Thailand Imports averaged 8499.24 USD Million reaching an all time high of 24454.66 USD Million in March of 2012 and a record low of 2760 USD Million in February of 1992. Thailand imports mainly raw materials and intermediate goods (around 56 percent of total imports). Fuel accounts for 19 percent, parts of electronic appliances for 11 percent, materials of base metal for 9 percent, and chemicals for 5.5 percent. Machinery, equipment and supplies such as computers and mechanical represent 25 percent of total imports, and consumer goods account for 8 percent. Main import partners are Japan (20 percent of total imports), China (15 percent) and the European Union (8 percent). Others include the United Arab Emirates, Malaysia and the United States. This page includes a chart with historical data for Thailand Imports

http://www.tradingeconomics.com/thailand/imports

So you see, a huge amount of the inputs used to make the exports all just got a bit more expensive.

I am equally glad you are not my economics student.

You pasted a quote that basically reinforces my point, and you only point out fuel, which is a single commodity and in no way dictates a county's overall economic health.

Exports are down and imports are at a record high, fuel is only 19% of the import situation and Thailand actually exports fuel also.

The thing I was trying to say was that who wants to buy ANYTHING from Thailand if they get a shit rate on the currency conversion? and with a strong baht, its a good thing to bring commodities into the country..

let's simplify it for you.

More things imported, = more money leaving the country, less things exported = less money coming into the country. Which basically means the economy is slowing as there is less wealth. When a bust follows a boom, historically inflation rises dramatically as business owners put up prices to retain the margins they have become accustomed too.

Don't just look at the price of petrol and measure a country's domestic economy. Its a lot more complex.

[rott]

Surely even 5 year olds know the baht will plummet and the reasons for it and the real reasons it was pushed so high.

Could you please explain in simple terms for my benefit,"the real reasons it was pushed so high."

Not being sarcastic here but I (and possibly a few others) don't know either the real or supposed reasons for the baht strength, just assumed it was because the UK and USA economies are in the xxxxxxx.

Edited June 5, 2013 by metisdead

[AnotherOneAmerican]

@KB99

In a normal country, but here we have total corruption.

When the baht rises the importers just make more profit, prices never go down.

When the baht falls the importers just charge more and make more profit.

[klubex99]

Surely even 5 year olds know the baht will plummet and the reasons for it and the real reasons it was pushed so high.

Could you please explain in simple terms for my benefit,"the real reasons it was pushed so high."

Not being sarcastic here but I (and possibly a few others) don't know either the real or supposed reasons for the baht strength, just assumed it was because the UK and USA economies are in the shitter.

It was probably pushed high to fool the Thai people into thinking that Thailand's economy is sooooo good, and probably 90% of them believe it.

[Thai at Heart]

Thailand imports mainly raw materials and intermediate goods (around 56 percent of total imports)

You do understand what a raw material and an intermediate good is? Then add on fuel, which is used for both manufacturing, logistics, electricity generation and consumption. So you see, an enormous amount of inputs of the manufacturing process are imported, and turned straight around to be exported. As you will notice, a relative increase in exports by Thailand is very closely followed by a necessary increase in imports. For example, just about all of the steel used to make body panels for cars in Thailand is imported from Japan under a trade deal.

So it isn't as clear as devalue the baht, give exports an instant boost, because the price of the inputs will increase because they have to be imported.

Agriculture will get a bit of a boost, but the baht will have to go a hell of a long way to make the rice competitive.

[Thai at Heart]

Surely even 5 year olds know the baht will plummet and the reasons for it and the real reasons it was pushed so high.

Could you please explain in simple terms for my benefit,"the real reasons it was pushed so high."

Not being sarcastic here but I (and possibly a few others) don't know either the real or supposed reasons for the baht strength, just assumed it was because the UK and USA economies are in the shitter.

It was probably pushed high to fool the Thai people into thinking that Thailand's economy is sooooo good, and probably 90% of them believe it.

Pushed high by whom?

[chiang mai]

Surely even 5 year olds know the baht will plummet and the reasons for it and the real reasons it was pushed so high.

Could you please explain in simple terms for my benefit,"the real reasons it was pushed so high."

Not being sarcastic here but I (and possibly a few others) don't know either the real or supposed reasons for the baht strength, just assumed it was because the UK and USA economies are in the xxxxxxx.

The Baht strengthened because of the vast amounts of "hot" money being generated around the world, much of it as a result of QE, all of it looking for a home and chasing yeild. And with bank rates in the West as low as zero, the yields on Thai (and other) governement bonds for example was attractive, ditto the lax measures in place here to prevent money laundering meant that it is easy for foriegners to import their cash and to "invest", aka hide, in property, the stock market etc.

But now as markets sence that the US Fed wants to cut back on QE, some of that hot money has started to be withdrawn and money is tsrating to flow out of Aisa.