Thai baht likely to strengthen after QE in EU: Finance Minister

[webfact]

Thai baht likely to strengthen after QE in EU: Finance Minister

BANGKOK, 23 January 2015 (NNT) - Finance Minister Sommai Phasee has expressed concerns over a possible appreciation of the Thai baht after the European Central Bank (ECB) pushed the button on €1-trillion quantitative easing (QE) to revive the ailing eurozone economy.

The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai.

The minister said he believed the Bank of Thailand had prepared initial measures, including a policy interest rate cut, in order prevent capital from flooding the market.

Agreeing with the Finance Minister, Deputy Director-General of Fiscal Policy Office Ekniti Nitithanprapas said most of the inflow would likely go to the Thai capital market due to low interest rate. The Thai capital market would therefore fluctuate in a short period while the Euro currency would remain weak for a long time, said the official.


-- NNT 2015-01-23

related topic:
Trillion euro bank plan for eurozone
http://www.thaivisa.com/forum/topic/794161-trillion-euro-bank-plan-for-eurozone/

[Diplomatico]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

[aTomsLife]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

I see what you mean, the statement is entirely counter intuitive. That's why I don't believe it's been translated properly. Could be wrong, but I don't see why the minister would say that, knowing full well a weaker Euro and a stronger baht would decrease European purchasing power.

[worgeordie]

Quantitative easing, is that not just an American word, for

printing lots more money ?

regards Worgeordie

[Diplomatico]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

I see what you mean, the statement is entirely counter intuitive. That's why I don't believe it's been translated properly. Could be wrong, but I don't see why the minister would say that, knowing full well a weaker Euro and a stronger baht would decrease European purchasing power.

Well, except there's also this from a couple of days ago:

"BANGKOK, 20 January 2015 (NNT) – The Director-General of the Department of International Trade Promotion (DITP) has ensured the depreciating Swiss Franc will not affect the Thai export sector, and he is positive that the Made in Thailand in Focus 2015 Exposition will effectively boost domestic purchases.

According to the DITP Director-General Nuntawan Sakuntanaga, the depreciated Swiss Franc currency will cause little to no effect to Thailand's export sector as both countries' import and export volume are not high."

http://www.thaivisa.com/forum/topic/793376-weakened-swiss-franc-not-affecting-thai-exports-says-ditp-director-general/

That was after the Swiss franc had appreciated by about 30% overnight after the Swiss National Bank stopped supporting a price floor for the franc vis-a-vis the euro.

[aTomsLife]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

I see what you mean, the statement is entirely counter intuitive. That's why I don't believe it's been translated properly. Could be wrong, but I don't see why the minister would say that, knowing full well a weaker Euro and a stronger baht would decrease European purchasing power.

Well, except there's also this from a couple of days ago:

"BANGKOK, 20 January 2015 (NNT) – The Director-General of the Department of International Trade Promotion (DITP) has ensured the depreciating Swiss Franc will not affect the Thai export sector, and he is positive that the Made in Thailand in Focus 2015 Exposition will effectively boost domestic purchases.

According to the DITP Director-General Nuntawan Sakuntanaga, the depreciated Swiss Franc currency will cause little to no effect to Thailand's export sector as both countries' import and export volume are not high."

http://www.thaivisa.com/forum/topic/793376-weakened-swiss-franc-not-affecting-thai-exports-says-ditp-director-general/

That was after the Swiss franc had appreciated by about 30% overnight after the Swiss National Bank stopped supporting a price floor for the franc vis-a-vis the euro.

lol. Maybe the same translator.

[NCC1701A]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

how many days in a row now they get it wrong?

must be the translation

[Xircal]

There's more bad news on the horizon next Sunday. That's the day the Greeks go to the Polls and at the moment, the anti-austerity party Syriza led by Alex Tsipras is tipped to win.

What he proposes to do is to have the Troika right off half of the €billions of Greek debt. He says he'll undo all the austerity measures and then implement a massive spending program to kickstart the economy.

However, the Dutch prime minister has already given that one the thumbs down and Merkel is unlikely to accede to it either.

So he would either have to do a U-turn and stick to the original agreement, or Greece will be forced out of the Euro.

This morning when I checked, the Euro FX rate was 36 Baht. A Greek exit would send that figure spiralling south in no uncertain terms.

It looks like the Euroland fairy tale is unravelling fast.

[Lukecan]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

What do you expect him to say? He is in a position of power and needs to act accordingly.He cant say our exporters are doomed because of the weak euro, it will spark outrage. This is politics.

[Diplomatico]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

What do you expect him to say? He is in a position of power and needs to act accordingly.He cant say our exporters are doomed because of the weak euro, it will spark outrage. This is politics.

I would love nothing more than for Greece to default and then revert to a worthless drachma. A country that has sucked off the teat of the rest of the world for years and years gets it's just baklava.

[MisterTee]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

What do you expect him to say? He is in a position of power and needs to act accordingly.He cant say our exporters are doomed because of the weak euro, it will spark outrage. This is politics.

I would love nothing more than for Greece to default and then revert to a worthless drachma. A country that has sucked off the teat of the rest of the world for years and years gets it's just baklava.

Be careful what you wish for.

A Greek meltdown will probably have unwelcome consequences... especially for Europe.

[Cake Monster]

A strong Baht will equal less exports on top of the loss of special priveleges for trade with the EU, and much less Tourism and property revenue for these already embattled sectors.

Baht to less than 30 / $ = huge problem, and no room to change base rates due to the " official " household debt of 89% of GDP, and probably about the same, or more household debt, in the grey banking sector .

[arthurboy]

Quantitative easing, is that not just an American word, for

printing lots more money ?

regards Worgeordie

Chortle.

[does]

With the current deal, Greece would apparently need something 100 years to pay off the debt.

The Greeks will not be overly intimidated by the Dutch PM's thumbs down. Merkel is the one to watch.

Lot's of if's, but a falling Euro seems to me pretty certain. Europe is pretty rudderless at the moment.

There's more bad news on the horizon next Sunday. That's the day the Greeks go to the Polls and at the moment, the anti-austerity party Syriza led by Alex Tsipras is tipped to win.

What he proposes to do is to have the Troika right off half of the €billions of Greek debt. He says he'll undo all the austerity measures and then implement a massive spending program to kickstart the economy.

However, the Dutch prime minister has already given that one the thumbs down and Merkel is unlikely to accede to it either.

So he would either have to do a U-turn and stick to the original agreement, or Greece will be forced out of the Euro.

This morning when I checked, the Euro FX rate was 36 Baht. A Greek exit would send that figure spiralling south in no uncertain terms.

It looks like the Euroland fairy tale is unravelling fast.

[Daniel Boon]

If it's right - that Thai government wants baht value to go - then there is an ulterior motive; tourism will drop, exports will be priced out of the world market (including rice) and any correction (to reverse impact of losses) will cause many problems in Thailand economy

[masuk]

The current Australian $ exchange rate looks like going below ฿24 and it's starting to hurt.

[jwongbkk]

the govt's way to improve trade, tourism and the economy

STRENGTHEN the Thai Baht

I wonder which wonderful school of Economics the idiot who made this happen go to

The THAINESS SCHOOL OF DIMWITS?!

If the baht continues to strengthen with no valid reason whatsoever, so many Thai people are going to suffer due to reduced exports, tourism

Why is the govt too blind to all these?

[bangmai]

I have an idea: when the Euro hits parity with the USD; we can have a "Euro-Trash" themed party at Zoe, shouldn't take much preparation.

[Thai at Heart]

There's more bad news on the horizon next Sunday. That's the day the Greeks go to the Polls and at the moment, the anti-austerity party Syriza led by Alex Tsipras is tipped to win.

What he proposes to do is to have the Troika right off half of the billions of Greek debt. He says he'll undo all the austerity measures and then implement a massive spending program to kickstart the economy.

However, the Dutch prime minister has already given that one the thumbs down and Merkel is unlikely to accede to it either.

So he would either have to do a U-turn and stick to the original agreement, or Greece will be forced out of the Euro.

This morning when I checked, the Euro FX rate was 36 Baht. A Greek exit would send that figure spiralling south in no uncertain terms.

It looks like the Euroland fairy tale is unravelling fast.

The Euro experiment was being held up by the strength of Greek unemployed. The place is financially gutted with 30% unemployment among the youth and more layoffs coming to Greece public sector workers.

I am not surprised that the public vote for a left wing party. Anyone would. The entire premise of the euro is broken as it was predicted by thatchers economic people 30 years ago. Thank god that advice was followed.

You cannot have a single currency, without a central tax raising entity to limit or distribute funds and no homogeneity in taxes.the europeans knew the risks at the beginning and the seeds were sown when they had Portugal and Greece exploiting the loophole to borrow at German interest rates.

Crazy crazy economics. It will inevitably unravel.

[Thai at Heart]

the govt's way to improve trade, tourism and the economy

STRENGTHEN the Thai Baht

I wonder which wonderful school of Economics the idiot who made this happen go to

The THAINESS SCHOOL OF DIMWITS?!

If the baht continues to strengthen with no valid reason whatsoever, so many Thai people are going to suffer due to reduced exports, tourism

Why is the govt too blind to all these?

???

Europe is printing money not Thailand.

[maidee]

saving account interest will go to 0%

do they think people will start to invest in overrated stocks that magically overnight lose 95% of their value ?

do they think people will go spend more money, like on far east asia trips (thailand) where they get 20% value for their money than last year ?

[bangmai]

There's more bad news on the horizon next Sunday. That's the day the Greeks go to the Polls and at the moment, the anti-austerity party Syriza led by Alex Tsipras is tipped to win.

What he proposes to do is to have the Troika right off half of the billions of Greek debt. He says he'll undo all the austerity measures and then implement a massive spending program to kickstart the economy.

However, the Dutch prime minister has already given that one the thumbs down and Merkel is unlikely to accede to it either.

So he would either have to do a U-turn and stick to the original agreement, or Greece will be forced out of the Euro.

This morning when I checked, the Euro FX rate was 36 Baht. A Greek exit would send that figure spiralling south in no uncertain terms.

It looks like the Euroland fairy tale is unravelling fast.

The Euro experiment was being held up by the strength of Greek unemployed. The place is financially gutted with 30% unemployment among the youth and more layoffs coming to Greece public sector workers.

I am not surprised that the public vote for a left wing party. Anyone would. The entire premise of the euro is broken as it was predicted by thatchers economic people 30 years ago. Thank god that advice was followed.

You cannot have a single currency, without a central tax raising entity to limit or distribute funds and no homogeneity in taxes.the europeans knew the risks at the beginning and the seeds were sown when they had Portugal and Greece exploiting the loophole to borrow at German interest rates.

Crazy crazy economics. It will inevitably unravel.

50% youth unemployment in Italy and Spain......quite a few of them looking for work as English Teachers in LOS.

[ratcatcher]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

What do you expect him to say? He is in a position of power and needs to act accordingly.He cant say our exporters are doomed because of the weak euro, it will spark outrage. This is politics.

I would love nothing more than for Greece to default and then revert to a worthless drachma. A country that has sucked off the teat of the rest of the world for years and years gets it's just baklava.

Be careful what you wish for.

A Greek meltdown will probably have unwelcome consequences... especially for Europe.

Some people here may find it will Costas much to live in Thailand as in Greece.

[Thian]

"The minister said the QE program would likely create a massive capital inflow into Thailand and make the Thai currency strengthen. On the other hand, the program could benefit Thai exporters by boosting the European purchasing power, said Mr Sommai."

Seriously, these guys really don't understand currency appreciation/depreciation and the effects thereof.

What do you expect him to say? He is in a position of power and needs to act accordingly.He cant say our exporters are doomed because of the weak euro, it will spark outrage. This is politics.

I would love nothing more than for Greece to default and then revert to a worthless drachma. A country that has sucked off the teat of the rest of the world for years and years gets it's just baklava.

Be careful what you wish for.

A Greek meltdown will probably have unwelcome consequences... especially for Europe.

Where is our forumGreek now? He's always the first to reply on a subject.

I agree that the Greeks really played their hand over, what a bunch of louzy people they are, living on the wallet of other EU-members and all parking their money in Swisse. No respect anymore for them.

But a Greek meltdown can be a problem for Thailand in the way that it might become a very cheap holidaydestination. Greece also has great beaches/islands and they don't mind small bikini's there.

Backpackers on a budget might all go there to party instead of full moon partying in Thailand.

[bangon04]

I agree that the Greeks really played their hand over, what a bunch of louzy people they are, living on the wallet of other EU-members and all parking their money in Swisse. No respect anymore for them.

But a Greek meltdown can be a problem for Thailand in the way that it might become a very cheap holidaydestination. Greece also has great beaches/islands and they don't mind small bikini's there.

Backpackers on a budget might all go there to party instead of full moon partying in Thailand.

and the downside is...?

[Thian]

I agree that the Greeks really played their hand over, what a bunch of louzy people they are, living on the wallet of other EU-members and all parking their money in Swisse. No respect anymore for them.

But a Greek meltdown can be a problem for Thailand in the way that it might become a very cheap holidaydestination. Greece also has great beaches/islands and they don't mind small bikini's there.

Backpackers on a budget might all go there to party instead of full moon partying in Thailand.

and the downside is...?

The downside is that the RTP can't extort those backpackers anymore. They buy a lot of drugs on the party's and then suddenly the police shows up and knows exactly who bought what. Only for big money will they be released or live in the BKK Hilton for some years.

But the baht is much too strong. There is still crisis in the EU that's why the QE started so many people are looking for cheap holidays. Also Thai products like prawns are far too expensive. The crisis will cut deeper into Thailand then they expect and there's nothing to stop it. China is their last hope.

[Berkshire]

the govt's way to improve trade, tourism and the economy

STRENGTHEN the Thai Baht

I wonder which wonderful school of Economics the idiot who made this happen go to

The THAINESS SCHOOL OF DIMWITS?!

If the baht continues to strengthen with no valid reason whatsoever, so many Thai people are going to suffer due to reduced exports, tourism

Why is the govt too blind to all these?

???

Europe is printing money not Thailand.

Mr. jwong is clearly writing on emotion alone as he's clearly losing his ass on the Euro slide. But you're right, this has very little to do with Thailand and all to do with the EU "experiment" failing. The pain will only get worse.

[masuk]

The downside of the baht being tied to the Yankee dollar is that farangs on pensions can't afford to lose more than 20% in exchange rates, and tourists from affected countries will find cheaper places to visit, such as Bali.

[Diplomatico]

The downside of the baht being tied to the Yankee dollar is that farangs on pensions can't afford to lose more than 20% in exchange rates, and tourists from affected countries will find cheaper places to visit, such as Bali.

The only place the baht is tied to the "Yankee dollar" is in your mind. It's been a floating exchange rate currency for the past 18 years.

"Since 2 July 1997, Thailand has adopted the managed-float exchange rate regime, of which the value of the Baht is determined by market forces. The Bank of Thailand would intervene in the market only when necessary, in order to prevent excessive volatilities and achieve economic policy targets. The floating regime enhances flexibility and efficiency in monetary policy implementation and increases confidence of domestic and international investors."

http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=2

[Prbkk]

The downside of the baht being tied to the Yankee dollar is that farangs on pensions can't afford to lose more than 20% in exchange rates, and tourists from affected countries will find cheaper places to visit, such as Bali.

The only place the baht is tied to the "Yankee dollar" is in your mind. It's been a floating exchange rate currency for the past 18 years.

"Since 2 July 1997, Thailand has adopted the managed-float exchange rate regime, of which the value of the Baht is determined by market forces. The Bank of Thailand would intervene in the market only when necessary, in order to prevent excessive volatilities and achieve economic policy targets. The floating regime enhances flexibility and efficiency in monetary policy implementation and increases confidence of domestic and international investors."

http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=2

Time for another 0.25 cut in rates and maybe another later in the year. The high Baht will impede any potential recovery.( in addition to making beer more expensive for everyone other than Americans).