Protests force Thailand to lower interest rate

[webfact]

Protests Force Thailand To Lower Interest Rate
By Khaosod Online

BANGKOK: -- Responding to the signs of the national economy slowing down due to waves of protests in Bangkok, the Bank of Thailand (BOT) has agreed to lower interest rate to 2.25%.

According to Mr. Paiboon Kittisrikangwan, Secretary General of the Monetary Policy Committee, the change was a necessary measure to the political turmoil and the delayed public investment.

The measure is designed to push for future growth as the Thai economy in 2013 performed less than expected because of low price sensitivity and a decline in internal debts, Mr. Paiboon said.

The announcement came after the country is risking delayed public investments and the fading confidence from private sectors regarding the political anxiety.

The BOT also announced its expectation for the kingdom’s GDP for 2013 to stay at 3%, and 4% in 2014.

Source: http://www.khaosod.co.th/en/view_newsonline.php?newsid=TVRNNE5UWTFNVEV4T1E9PQ==

-- KHAOSOD English 2013-11-29

[daboyz1]

Yeah, that's why they lowered interest rates.

[thailiketoo]

Yeah, that's why they lowered interest rates.

Why do you think they lowered them?

[daboyz1]

Yeah, that's why they lowered interest rates.

Why do you think they lowered them?

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

[ggold]

Since when did banks raise or lower Interest rates by protest's! In that case I suggest a counter protest, to raise interest rates!

[daboyz1]

Hey, I'm all for it. Lower interest rates should mean a weaker Baht.

[edwardandtubs]

Yeah, that's why they lowered interest rates.

Why do you think they lowered them?

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

What a bizarre comment. The Secretary General of the Monetary Policy Committee didn't 'blame it on some protestors'. He gave reasons why the economy needs stimulating, one of which is the negative economic impact of the protests. This is completely obvious and uncontroversial.

[daboyz1]

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

What a bizarre comment. The Secretary General of the Monetary Policy Committee didn't 'blame it on some protestors'. He gave reasons why the economy needs stimulating, one of which is the negative economic impact of the protests. This is completely obvious and uncontroversial.

Did you miss the headline in big bold letters?

Protests Force Thailand To Lower Interest Rate

[dru2]

Yeah, that's why they lowered interest rates.

Why do you think they lowered them?

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

[daboyz1]

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

That makes sense. I just thought outright blaming it on the protests was funny.

[thailiketoo]

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

That makes sense. I just thought outright blaming it on the protests was funny.

Recession is when the GDP falls in two successive quarters.

[dru2]

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

That makes sense. I just thought outright blaming it on the protests was funny.

Recession is when the GDP falls in two successive quarters.

Exactly - as is the current case.

Bloomberg: http://www.bloomberg.com/news/2013-08-19/thai-growth-slows-as-scope-for-monetary-stimulus-seen-limited.html

Or of course you can choose to believe Kittirat. White lies may mask the reality - but they don't change it.

Edited November 29, 2013 by dru2

[daboyz1]

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

That makes sense. I just thought outright blaming it on the protests was funny.

Recession is when the GDP falls in two successive quarters.

A recession is when there is negative GDP in two successive quarters. If GDP does not grow as expected, that is not a recession.

re·ces·sion

riˈseSHən/

noun

noun: recession; plural noun: recessions

1.

a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

synonyms: economic decline, downturn, depression, slump, slowdown More

[dru2]

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

That makes sense. I just thought outright blaming it on the protests was funny.

Recession is when the GDP falls in two successive quarters.

A recession is when there is negative GDP in two successive quarters. If GDP does not grow as expected, that is not a recession.

Edited November 29, 2013 by dru2

[daboyz1]

That makes sense. I just thought outright blaming it on the protests was funny.

Recession is when the GDP falls in two successive quarters.

Exactly - as is the current case.

Nope.

[dru2]

Recession is when the GDP falls in two successive quarters.

Exactly - as is the current case.

Nope.

Well let's see - I can believe Bloomberg or I can go with your erudite "nope". Guess which has more credibility?

[daboyz1]

As you wish. From Bloomberg:

I

dentifying recessions can be difficult in Russia. The typical definition is two quarters of declining gross domestic product, adjusted for inflation, but government statistics agency Rosstat provides only year-over-year data for international comparison.

With a bit of interpolation, economists are able to estimate the quarterly numbers. The picture isn’t pretty: Sergei Alexashenko, director of macroeconomic studies at Moscow's prestigious Higher School of Economics, wrote in the newspaper Vedomosti that the Russian economy contracted at an annualized rate of between 0.1 percent and 0.3 percent in both the first and second quarters of 2013. A drop in the first three months of the year is traditional for Russia, but a decline in the second quarter would be out of the ordinary.

Source:

http://www.bloomberg.com/news/2013-08-20/is-russia-already-in-recession-.html

[dru2]

As you wish. From Bloomberg:

I

dentifying recessions can be difficult in Russia. The typical definition is two quarters of declining gross domestic product, adjusted for inflation, but government statistics agency Rosstat provides only year-over-year data for international comparison.

With a bit of interpolation, economists are able to estimate the quarterly numbers. The picture isn’t pretty: Sergei Alexashenko, director of macroeconomic studies at Moscow's prestigious Higher School of Economics, wrote in the newspaper Vedomosti that the Russian economy contracted at an annualized rate of between 0.1 percent and 0.3 percent in both the first and second quarters of 2013. A drop in the first three months of the year is traditional for Russia, but a decline in the second quarter would be out of the ordinary.

Source:

http://www.bloomberg.com/news/2013-08-20/is-russia-already-in-recession-.html

We are not talking definitions of recession here. We are discussing whether Thailand is in a technical recession. Dictionary definitions of recession may be helpful for the intellectually challenged, but do not alter facts. I again refer you to:

http://www.bloomberg.com/news/2013-08-19/thai-growth-slows-as-scope-for-monetary-stimulus-seen-limited.html

Posted just over a month ago.

Have you something more informative than simple definitions to rebut Bloomberg's statement?

[daboyz1]

Recession is when the GDP falls in two successive quarters.

Exactly - as is the current case.

Nope.

Well let's see - I can believe Bloomberg or I can go with your erudite "nope". Guess which has more credibility?

Please show me a link from Bloomberg where the economy grows at a slower rate than expected, but still grows, is considered a recession.

[dru2]

Nope.

Well let's see - I can believe Bloomberg or I can go with your erudite "nope". Guess which has more credibility?

Please show me a link from Bloomberg where the economy grows at a slower rate than expected, but still grows, is considered a recession.

No. I have directed you to a recent link by Bloomberg stating that Thailand is now in recession. I believe Bloomberg and I do not accept your tendentious arguments. Instead I shall wait for the next quarterly report and see what emerges then. Good luck with your investments!

[Robby nz]

The measure is designed to push for future growth as the Thai economy in 2013 performed less than expected because of low price sensitivity and a decline in internal debts, Mr. Paiboon said.

And a decline in internal debt????

Were we not told in the last couple of days that household debt averaged 160,000 B per household and was rising?

The BAAC does not have money to pay the farmers.

We were told that 3 other Govt banks were in trouble.

The Govt has just tried to raise money by selling by 82 billion worth of bonds and only 37 billion of bonds were sold.

If these things are not internal debt then what is, and how is it declining ?

A lowering of interest rates is designed to increase debt, so they think an increase in debt is a good thing ?

Working, no doubt on the theory that if people borrow more they will spend more thereby stimulating the economy.

[thailiketoo]

The measure is designed to push for future growth as the Thai economy in 2013 performed less than expected because of low price sensitivity and a decline in internal debts, Mr. Paiboon said.

And a decline in internal debt????

Were we not told in the last couple of days that household debt averaged 160,000 B per household and was rising?

The BAAC does not have money to pay the farmers.

We were told that 3 other Govt banks were in trouble.

The Govt has just tried to raise money by selling by 82 billion worth of bonds and only 37 billion of bonds were sold.

If these things are not internal debt then what is, and how is it declining ?

A lowering of interest rates is designed to increase debt, so they think an increase in debt is a good thing ?

Working, no doubt on the theory that if people borrow more they will spend more thereby stimulating the economy.

What three other government banks are in trouble?

And could you provide a link for the bond sale?

[daboyz1]

Gross domestic product unexpectedly shrank 0.3 percent in the three months through June from the previous quarter, when it contracted a revised 1.7 percent, the National Economic and Social Development Board said in Bangkok today. Only one of 11 analysts surveyed had predicted a decline.

The economy rose a less-than-estimated 2.8 percent from a year earlier.

Those two statements from the Bloomberg link provided directly contradict each other. Either GDP grew, or it contracted.

[dru2]

The measure is designed to push for future growth as the Thai economy in 2013 performed less than expected because of low price sensitivity and a decline in internal debts, Mr. Paiboon said.

And a decline in internal debt????

Were we not told in the last couple of days that household debt averaged 160,000 B per household and was rising?

The BAAC does not have money to pay the farmers.

We were told that 3 other Govt banks were in trouble.

The Govt has just tried to raise money by selling by 82 billion worth of bonds and only 37 billion of bonds were sold.

If these things are not internal debt then what is, and how is it declining ?

A lowering of interest rates is designed to increase debt, so they think an increase in debt is a good thing ?

Working, no doubt on the theory that if people borrow more they will spend more thereby stimulating the economy.

What three other government banks are in trouble?

And could you provide a link for the bond sale?

http://oryza.com/news/thailand-government-struggles-raise-funds-rice-mortgage-program-bonds

It's in Bloomberg and Wall Street Journal too, but they're all probably wrong.

[bangon04]

Yeah, that's why they lowered interest rates.

Why do you think they lowered them?

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

I think they lowered them because the economy is in recession, the government - and especially Kittirat - are in denial, and it is both easy and politically advantageous to blame someone else.

If not (favourite choice) noxious foreign influences, then anti-government protesters.

They all do this, not just Peua Thai - I feel sure some of the forum's Red Shirt supporters would agree this is the case too.

Where is Naam when we need him?

[edwardandtubs]

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

What a bizarre comment. The Secretary General of the Monetary Policy Committee didn't 'blame it on some protestors'. He gave reasons why the economy needs stimulating, one of which is the negative economic impact of the protests. This is completely obvious and uncontroversial.

Did you miss the headline in big bold letters?

Protests Force Thailand To Lower Interest Rate

The headline is irrelevant. You need to read the whole story and what the Secretary General of the Monetary Policy Committee actually said.

[daboyz1]

Interesting article. It appears "recession" can mean many things depending who is defining it.

http://clubtroppo.com.au/2008/11/23/what-is-the-difference-between-a-recession-and-a-depression/

In fact, there is no official or even widely-accepted criterion for distinguishing between a recession and a depression. In the United States, a recession is officially defined by the National Bureau of Economic Research (a committee comprised largely of academic economists) as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales . This definition does not require consecutive quarters of negative real GDP growth, despite the widespread use of this rule of thumb in the media . Notably, the most recent US recession in 2000-01 did not feature consecutive quarters of negative growth – there were three quarters of negative growth, but none of them consecutive

Other countries do not have a recognized recession-dating body equivalent to the US NBER , with the result that the consecutive quarters of negative growth rule of thumb is more commonly used outside the United States. Nevertheless, this rule is not infallible. In Australia, real GDP did not decline in consecutive quarters during the 1974 recession; and there have been periods of two or more quarters of negative real GDP growth which are not generally regarded as having been recessions (September quarter 1965 through March quarter 1966; December quarter 1971 through March quarter 1972; and the September and December quarters of 1977).

To most economists, a more meaningful definition of a recession is an extended period of below-trend or below potential growth. Trend or potential growth can be hard to measure, but this approach to identifying recession allows for the fact that in countries with high rates of population growth and/or high rates of productivity growth, real GDP does not need to be negative for conditions consistent with recession (such as rising unemployment) to develop.

[Thait Spot]

The measure is designed to push for future growth as the Thai economy in 2013 performed less than expected because of low price sensitivity and a decline in internal debts, Mr. Paiboon said.

And a decline in internal debt????

Were we not told in the last couple of days that household debt averaged 160,000 B per household and was rising?

The BAAC does not have money to pay the farmers.

We were told that 3 other Govt banks were in trouble.

The Govt has just tried to raise money by selling by 82 billion worth of bonds and only 37 billion of bonds were sold.

If these things are not internal debt then what is, and how is it declining ?

A lowering of interest rates is designed to increase debt, so they think an increase in debt is a good thing ?

Working, no doubt on the theory that if people borrow more they will spend more thereby stimulating the economy.

Good stuff.

I would add to that:

Interest rates down means the currency is less attractive and will fall

Household debt is high - but is probably fixed rate contract

Exports are down - so a weaker baht will help

Imports were high and have fallen slightly - probably as a result of less cash in the pocket due to house and car loans.

Increasing the baht cost of imports will add to the tax coffers

The impact of the protests has already meant lower baht rates as money is withdrawn from all THB denominated things - from shares to rice and pork. Lowering interest will only accelerate this

[GAZZPA]

This is pretty stupid really.. Lowering interest rates will mean that overseas investors may look to move their money. At the moment interest rates in the west are very low, and Thailand has pretty attractive rates,,, so there is a lot of money in the East because big wigs make a better return, start to take that away and money may be pulled.

The only saviour they is that currency will fall (and is falling) in value which attracts short term investment money, especially if the currency is artificially low driven by sentiment for the protests. Money comes in and buys low value, things stabiles, currency rises again and they sell with tidy profit.

I think there are probably other motives at hand.

[shaurene]

Yeah, that's why they lowered interest rates.

Why do you think they lowered them?

No idea. Generally central banks lower interest rates in the hopes that banks will offer cheap loans in order pump money into the system to stimulate the economy. That's why the U.S. does it anyway To blame it on some protestors is pretty hilarious.

What a bizarre comment. The Secretary General of the Monetary Policy Committee didn't 'blame it on some protestors'. He gave reasons why the economy needs stimulating, one of which is the negative economic

impact of the protests. This is completely obvious and uncontroversial.

Country's lower interest rates to try and stimulate the domestic market this is what happened due to the banking and housing markets few years back, they do it to lower the payments people have to pay on their home and bank loans. You have to stimulate the domestic market.