Thai govt unperturbed by reduced foreign capital influx

[webfact]

Govt unperturbed by reduced foreign capital influx
By English News



BANGKOK, Nov 21 – Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong said today that Thailand will not issue special measures to control foreign capital flows despite less active foreign investment in the Thai stock market.

He said he was not concerned with the outflows of foreign capital from the Thai bourse – a reversed situation compared to new stock markets.

Overseas hot money pushes up Thai baht and negatively impacts exports due to weaker competitiveness, he noted.

Mr Kittiratt continued that Thailand has enjoyed trade and financial liquidity balances with a 1 per cent GDP surplus and US$190 billion foreign reserves, or 3.5 times higher than short-term debts.

“Thailand does not reject foreign capital inflows for investment. Neither is the country concerned with capital outflows, especially hot money which has poured in and partially circulated in the country,” he said.

The finance minister said the government was considering the possibility of issuing dollar bonds to fund the massive infrastructure development projects under the bill to borrow Bt2 trillion and the bill on Bt350 billion water management projects.

There is nothing wrong with conducting a study in advance and the loans will be sought domestically, he commented. (MCOT online news)


-- TNA 2013-11-21

[Thai at Heart]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying.

Edited November 21, 2013 by Thai at Heart

[ggold]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying

Would foriegn investers buy these bonds from the Thai Government?

could you imagine the value of those bonds once QE is over, The US is going to have a major headache when that happens!

[MaxLee]

Sure, why should Kittirat an co be worried about foreign investment, as long as his party can TAKE aka import, and NEVER GIVE aka export back ...

Edited November 21, 2013 by MaxLee

[peterbkk9]

The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts. Bertrand Russell

[worgeordie]

The Government does not seem worried about anything,

when it should be worried,very worried about a lot of things.

not worried and not caring is that the same, like we don't give

a <deleted>.

regards Worgeordie

[Katipo]

The government would be unperturbed if fireballs came raining down from the sky and a swarm of locusts covered the land. The TAT would also issue a statement that tourist numbers have been unaffected, and may in fact increase.

NB. I didn't use flooding as an example as this has already actually happened... twice, and they were largely unperturbed on both occassions.

[Robby nz]

The finance minister said the government was considering the possibility of issuing dollar bonds to fund the massive infrastructure development projects under the bill to borrow Bt2 trillion and the bill on Bt350 billion water management projects.

There is nothing wrong with conducting a study in advance and the loans will be sought domestically, he commented.

Havent they already borrowed the 350 billion from Thai banks, sure he said they had?

From memory it was 200 billion from the GSB and the rest from K bank and I think Krung thai bank.

So the Thai banks are going to be expected to fund the 2.2 trillion as well as the 350 billion.

What with the BAAC having to sell bonds to pay for rice and the Islamic and SME banks reported in strife with NPL's the whole banking system will be getting stretched.

[swifty5x5]

Thats nothing. We can lose more money than that with one idiotic vote buying scheme.

[JoeThePoster]

Does anyone have a link to the audio or video of the Hon. Minister actually saying "influx"?

[siampolee]

The finance minister said the government was considering the possibility of issuing dollar bonds to fund the massive infrastructure development projects under the bill to borrow Bt2 trillion and the bill on Bt350 billion water management projects.

And no doubt these particular financial instruments will perform on a par with those celebrated ''War Loan Bonds'' issued by the British government in W.W.2 so as to finance the lend lease purchase from the U.S.A..

My mother who was engaged in war work bought some of those bonds as she did with my fathers funds as he was away in the Near and Far East on that amazing world tour fighting those sponsored by one Adolf Hitler .

When the time came to cash in those bond around the mid to late 1960's they were worth around 2% of their original 500 pounds sterling face value.

Bonds from Thailand, no I think not. I'd rather invest in a pork pie factory in Israel or Saudi Arabia

Edited November 21, 2013 by siampolee

[Basil B]

Bet Uncle T has already converted his windfall to Dollars and Gold, so he is laughing...

[onewhowalkswithbuffalo]

A hand full of Thai's are all about to get a whole lot richer.

[GentlemanJim]

Of course the Thai Government are unperturbed by the outflow of foreign money, the reasons being that they don't give an influk about this country and the benefits of foreign money to the economy, as long as the influx of Thai money to the Government members bank accounts keep flowing then what is the problem. Come to think of it, is that what Thaksin meant when he said 'in 6 months you will all be rich' ? he was talking to his party MP's !

[ThaiSETtrader]

Of course the Thai Government are unperturbed by the outflow of foreign money, the reasons being that they don't give an influk about this country and the benefits of foreign money to the economy, as long as the influx of Thai money to the Government members bank accounts keep flowing then what is the problem. Come to think of it, is that what Thaksin meant when he said 'in 6 months you will all be rich' ? he was talking to his party MP's !

The inflows and outflows he is referring to are related to the stock market mainly and not FDI. Thailand as an open market that wants to attract investors has to obviously deal with the buying and selling of stocks and thus the normal fluctuation of the baht as natural consequence of capital inflows and outflows.

[paulmw]

The finance minister said the government was considering the possibility of issuing dollar bonds to fund the massive infrastructure development projects under the bill to borrow Bt2 trillion and the bill on Bt350 billion water management projects.

There is nothing wrong with conducting a study in advance and the loans will be sought domestically, he commented.

Havent they already borrowed the 350 billion from Thai banks, sure he said they had?

From memory it was 200 billion from the GSB and the rest from K bank and I think Krung thai bank.

So the Thai banks are going to be expected to fund the 2.2 trillion as well as the 350 billion.

What with the BAAC having to sell bonds to pay for rice and the Islamic and SME banks reported in strife with NPL's the whole banking system will be getting stretched.

Oh F*&$ my salary is paid into Krung Thai.

[Thai at Heart]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying

Would foriegn investers buy these bonds from the Thai Government?

could you imagine the value of those bonds once QE is over, The US is going to have a major headache when that happens!

Would you rather borrow USD from the thai government or the USA?

[bigbamboo]

The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts. Bertrand Russell

Good old Bertrand came up with some crackers. My favourite could be embraced by TV posters too!

When once asked if he would die for what he believed in he replied, "No. After all, I might be wrong."

[ggold]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying

Would foriegn investers buy these bonds from the Thai Government?

could you imagine the value of those bonds once QE is over, The US is going to have a major headache when that happens!

Would you rather borrow USD from the thai government or the USA?

neither. Once the USA stops printing money, who knows what the dollar will be worth. Beside isn't the idea of Thailand issuing dollar bonds a gimmik?

[silent]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying.

Not as terrifying as the sound of a baht bond

[movsrus]

The Thai stock market continues to sink today. If the government falls, we will set 1200 on the SET before it begins to rebound. That rebound could be short lived if the US Fed decides to cut back on QE and begins to end the loose money that has been injected into the world markets. The World Bank is getting ready to cut the Thai GDP forecast again. Fast forward 12 months and there will be a surfeit of first time car buyers autos on the streets for sale at fire prices and lots of condos bought on spec that will also be looking for buyers.

If you are interested in housing or autos, wait a bit longer and there will be deals all over Thailand as the Thais try to get out from under the debt load they carry as the economy craters.

Tourism is a cash cow but it won't carry the country for long if the economy begins to implode.

[GentlemanJim]

Of course the Thai Government are unperturbed by the outflow of foreign money, the reasons being that they don't give an influk about this country and the benefits of foreign money to the economy, as long as the influx of Thai money to the Government members bank accounts keep flowing then what is the problem. Come to think of it, is that what Thaksin meant when he said 'in 6 months you will all be rich' ? he was talking to his party MP's !

The inflows and outflows he is referring to are related to the stock market mainly and not FDI. Thailand as an open market that wants to attract investors has to obviously deal with the buying and selling of stocks and thus the normal fluctuation of the baht as natural consequence of capital inflows and outflows.

Thanks but for such a tongue in cheek post as mine your reply was a bit too serious

[NeverSure]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying

Would foriegn investers buy these bonds from the Thai Government?

could you imagine the value of those bonds once QE is over, The US is going to have a major headache when that happens!

I can't say if foreign investors would buy anything from the Thai government. I wouldn't.

But as for bonds in USD, the value should increase if QE stops. Virtually all major countries are trying to keep the value of their currencies low to help exports and keep the economies going. That's why interest rates are near zero in some countries including the US.

But if QE stops, the money would actually have to be borrowed instead of printed/created, and the interest rates would rise. Higher interest rates for dollars would attract more investors and make dollars more desirable/valuable. Money would flow into US banks if the interest rates for it were higher. The same is true for the GBP etc. Just like we have to convert our money to baht to do anything in Thailand, investors have to convert their currency to dollars to do anything in the US. So more demand for the dollars for stability and higher interest rates would surely raise the value of the dollar.

But if I bought bonds in US dollars from Thailand, it wouldn't matter if the interest rate was decent and the value of the dollar increased if Thailand couldn't pay me back when the bond came due. This is why the US and Great Britain and so many other Western countries can attract money at near zero interest rates. Those countries are at the moment considered safer places to put money, and they can get deposits into banks virtually without paying interest.

Wait until the US and the UK and others stop the easy money and start paying interest. Then see what the baht is worth. Then see the baht outflows.

[Thai at Heart]

Didn't he want to reduce the value of the baht anyway?

I tell you what though,,the idea of the thai government issuing USD bonds is truly terrifying

Would foriegn investers buy these bonds from the Thai Government?

could you imagine the value of those bonds once QE is over, The US is going to have a major headache when that happens!

Would you rather borrow USD from the thai government or the USA?

neither. Once the USA stops printing money, who knows what the dollar will be worth. Beside isn't the idea of Thailand issuing dollar bonds a gimmik?

Well, the instant anyone says that they are going to start "tapering" i.e. stop printing quite so much money, the Asian currencies and stock markets all instantly catch a cold, and everyone gets very very jumpy. So, it would appear that it's likely that the USD will strengthen a bit, hurting US exports. Fundamentally though, there is little or no way for the USD to pay back it's entire government debt at these exchange rates. In the long run, it is going to devalue.