Baht stable despite recent weakening: BOT

[webfact]

Baht stable despite recent weakening: BOT
ERICH PARPART
THE NATION

BANGKOK: -- THE RECENT WEAKENING of the baht is in line with regional currencies because of the strengthening of the US dollar, the Bank of Thailand said yesterday.

It said it would reserve comment on the potential rise in the United States' benchmark interest rate until there is more clarity from the Federal Reserve's policy meeting on September 16 and 17.

Chirathep Senivongs Na Ayudhya, spokesman of the central bank, said the baht was now stable after bouncing up and down in the first seven months of the year from market speculation on key economic data of major economies.

However, the currency's volatility is still less than in 2012 and 2013, while its exchange rate is in the middle of the field of the region.

The baht's volatility in the year to Monday was 4.2 per cent compared with 5.8 per cent during the same period last year. According to Bloomberg's website, the baht depreciated from 31.99 per US dollar on Monday to 32.09 on Tuesday and continued falling to 32.147 as of 3pm yesterday.

Malaysia's ringgit slipped from 3.174 on Monday to 3.20 per dollar at 3pm yesterday, while Indonesia's rupiah and the Philippines' peso retreated from 11,726 ringgit to 11,788 ringgit and from 43.57 pesos to 43.86 in the same period of time.

"The current strengthening of the US dollar is because the US economy improved from the first quarter to the second and its economic recovery is definitely better than those of the European Union and Japan.

"Germany's economy contracted by 0.2 per cent in the same period of time, which is more than what was expected at 0.1 per cent, and Japan's economy has also shrunk by 7 per cent because of the increase in its value-added tax," he said.

The US economy is definitely on the path to recovery, Chirathep believes. The timing of the US interest-rate hike will largely depend on the labour market in terms of the real unemployment rate versus inflation and the shadow employment situation along with how the Federal Reserve members translate and give weight to the latest non-farm payroll figures last month, which were lower than expected.

The non-farm payroll in the US dropped from 212,000 in July to 142,000 in August even though the unemployment rate had declined from 6.2 to 6.1 per cent from the increase of employment from 209,000 to 230,000 in the same period.

In Thailand, Chirathep said the expected increase in the prices of natural gas for vehicles and liquefied petroleum gas would have a minimal impact on headline inflation. If gas prices were pulled up immediately, it would only push up headline inflation by 0.01 percentage point.

Somboon Chitphentom, senior director of the Regulatory Policy Department at the central bank, has warned retail investors that investment in additional Basel III Tier 2 instruments is riskier than investment in other types of bonds even though the return is on average 0.6-0.7 percentage point higher than other general bonds. Commercial banks should take care that their customers have sufficient knowledge and financial stability before offering such bonds as an alternative investment channel for them.

About Bt62 billion worth of additional Basel III Tier 2 instruments have been issued by commercial banks since the Third Basel Accord regulations went into effect in January last year, he said.

Source: http://www.nationmultimedia.com/business/Baht-stable-despite-recent-weakening-BOT-30243017.html


-- The Nation 2014-09-11

[Mango Bob]

A swing in the baht one way or the other a few stang is not going to break me or make me rich. This news does not affect the common man here.

[crazykopite]

A swing in the baht one way or the other a few stang is not going to break me or make me rich. This news does not affect the common man here.

Two months ago I was getting 5,000 baht more with the sterling that I brought in from the UK, that would have paid for my electricity bill . I was disappointed with what I got for the same amount of sterling brought in at the beginning of the week, they are claiming that the UK sterling is down due to the worry that the scots are going to vote yes in next weeks election

[Bob12345]

A swing in the baht one way or the other a few stang is not going to break me or make me rich. This news does not affect the common man here.

Agree.

I see articles like this coming by and immediately check the exchange rates only to find out that the changes are minimal.

As soon as it goes up or down 10% we will see what the impact is.

[Prbkk]

It is still a bit surprising, even after observing these statements for years, that Thais seem to see a strong Baht as a good thing, almost a matter of national pride. This despite the fact that the economy would be far more competitive with a moderately weaker currency ( something not lost on ALL Thailand's competitors).

If the Euro continues it's slide, we'll see announcements of manufacturing plants in that zone rather than Thailand

[emilymat]

It is still a bit surprising, even after observing these statements for years, that Thais seem to see a strong Baht as a good thing, almost a matter of national pride. This despite the fact that the economy would be far more competitive with a moderately weaker currency ( something not lost on ALL Thailand's competitors).

If the Euro continues it's slide, we'll see announcements of manufacturing plants in that zone rather than Thailand

Totally agree. It almost seems a matter of 'face' to have a strong baht even if it is not in the best interests of this export led economy. It's the same mentality that is found in tourist figures from TAT. Shame really.

[Baerboxer]

A swing in the baht one way or the other a few stang is not going to break me or make me rich. This news does not affect the common man here.

Two months ago I was getting 5,000 baht more with the sterling that I brought in from the UK, that would have paid for my electricity bill . I was disappointed with what I got for the same amount of sterling brought in at the beginning of the week, they are claiming that the UK sterling is down due to the worry that the scots are going to vote yes in next weeks election

The pound has been high against the dollar for sometime. The fall is partly due to a correction but it seems the market geniuses didn't factor any consideration that the vote in Scotland maybe a "yes" into their pricing. I had an hour+ on he phone with UK financial people yesterday, as well as different ones last week. All are running around like scolded cats. just like all the politicians now too.

Ignoring the Scotland question, most were suggesting the pond would be much lower against the dollar by year end anyway for several weeks now. Mind,they said the same thing this time last year!

What's becoming clear is that Salmond and the SNP have no ideas or plans on what to do if Scotland votes yes, and clearly didn't expect that; neither does Cameron, Clegg or the bewildered looking Miliband for that matter. So the arguing over keeping the pound, how that effects fiscal policy including tax etc etc is likely to drag on and on while these clowns try and sort the mess they created out. All this uncertainty will continue to weaken the pound and keep it low.

[Baerboxer]

A swing in the baht one way or the other a few stang is not going to break me or make me rich. This news does not affect the common man here.

Two months ago I was getting 5,000 baht more with the sterling that I brought in from the UK, that would have paid for my electricity bill . I was disappointed with what I got for the same amount of sterling brought in at the beginning of the week, they are claiming that the UK sterling is down due to the worry that the scots are going to vote yes in next weeks election

The pound has been high against the dollar for sometime. The fall is partly due to a correction but it seems the market geniuses didn't factor any consideration that the vote in Scotland maybe a "yes" into their pricing. I had an hour+ on he phone with UK financial people yesterday, as well as different ones last week. All are running around like scolded cats. just like all the politicians now too.

Ignoring the Scotland question, most were suggesting the pond would be much lower against the dollar by year end anyway for several weeks now. Mind,they said the same thing this time last year!

What's becoming clear is that Salmond and the SNP have no ideas or plans on what to do if Scotland votes yes, and clearly didn't expect that; neither does Cameron, Clegg or the bewildered looking Miliband for that matter. So the arguing over keeping the pound, how that effects fiscal policy including tax etc etc is likely to drag on and on while these clowns try and sort the mess they created out. All this uncertainty will continue to weaken the pound and keep it low.

I took the decision to increase my ThB earlier this year and just wish I'd have changed even more.

Edited September 11, 2014 by Baerboxer

[Thai at Heart]

It is still a bit surprising, even after observing these statements for years, that Thais seem to see a strong Baht as a good thing, almost a matter of national pride. This despite the fact that the economy would be far more competitive with a moderately weaker currency ( something not lost on ALL Thailand's competitors).

If the Euro continues it's slide, we'll see announcements of manufacturing plants in that zone rather than Thailand

Speak to Obama and the US treasury then. They have been printing 20+ bn USD a month for the last how many years and they are slowly turning the presses off.

The USD will strengthen inevitably. The the central bank can control its own interest rates and that is it. Inflation is already high in Thailand ,if they drop rates more, it will get out of control.

No country devalued itself to wealth in the long term.