Thailand’s economic outlook worst in 40 years

[Robert24]

http://www.cnbc.com/id/102478587

Disinflation, low demand, crash a coming

If the BoT isn't supporting the baht, who is?

Springs to mind what the Swedish Central bank did with the Swedish crown in 1992, but here without the BoT trying to keep the value of the Thai baht.

According to news media, Thailand has 0% export growth, tourism in money is declining, investments in Thailand aren't growing.

What's the catch here?

Interest rates are relatively attractive compared to other currencies - this is why investors put money into Thai baht. This may change once the FED starts increasing rates but the market still sees this some time away.

Now I think it was mentioned before. The BoT have absolutely zero interest in a strong Thai baht. They would certainly prefer the baht to be weaker in order to help the export industry. It is investors that keep the baht strong. In a world where interest rates are zero or negative in many currencies big investors like the Thai baht.

[KamalaRider]

http://www.cnbc.com/id/102478587

Disinflation, low demand, crash a coming

If the BoT isn't supporting the baht, who is?

Springs to mind what the Swedish Central bank did with the Swedish crown in 1992, but here without the BoT trying to keep the value of the Thai baht.

According to news media, Thailand has 0% export growth, tourism in money is declining, investments in Thailand aren't growing.

What's the catch here?

Interest rates are relatively attractive compared to other currencies - this is why investors put money into Thai baht. This may change once the FED starts increasing rates but the market still sees this some time away.

Now I think it was mentioned before. The BoT have absolutely zero interest in a strong Thai baht. They would certainly prefer the baht to be weaker in order to help the export industry. It is investors that keep the baht strong. In a world where interest rates are zero or negative in many currencies big investors like the Thai baht.

Wouldn't investors be scared s-tless is the currency couldn't back up against real value, export, tourism, domestic production, domestic trading etc.?

I thought investors investing in real values, like properties, factories etc. would like to see a near 0% bank rate, or are you talking about currency investors only?

[Robert24]

http://www.cnbc.com/id/102478587

Disinflation, low demand, crash a coming

If the BoT isn't supporting the baht, who is?

Springs to mind what the Swedish Central bank did with the Swedish crown in 1992, but here without the BoT trying to keep the value of the Thai baht.

According to news media, Thailand has 0% export growth, tourism in money is declining, investments in Thailand aren't growing.

What's the catch here?

Interest rates are relatively attractive compared to other currencies - this is why investors put money into Thai baht. This may change once the FED starts increasing rates but the market still sees this some time away.

Now I think it was mentioned before. The BoT have absolutely zero interest in a strong Thai baht. They would certainly prefer the baht to be weaker in order to help the export industry. It is investors that keep the baht strong. In a world where interest rates are zero or negative in many currencies big investors like the Thai baht.

Wouldn't investors be scared s-tless is the currency couldn't back up against real value, export, tourism, domestic production, domestic trading etc.?

I thought investors investing in real values, like properties, factories etc. would like to see a near 0% bank rate, or are you talking about currency investors only?

I think the big investors are real money asset managers like pension funds, asset managers, sovereign investors, etc. the likes of Black Rock, GIC, PIMCO etc. they are all searching for yield. And they can still get a decent yield here (be it in bonds, real estate or equities) compared to other currencies. And they see the Thai economy probably in a much different light otherwise they wouldn't invest here.

[chiang mai]

Ask yourself, how does a currency become strong or weak - a large part of that answer is that it gets bought or sold against USD, the more that is bought, the stronger it becomes and vica versa.

Given that THB is a teeny weeny currency in forex terms and that it is the 9th most popularly traded currency AND, the forecast is for 28 million tourists, tell me that you can't see at least a partial answer in there somewhere.

[Sandman77]

On channel news asia I always here Thailand is the hub of asia economic i not want belive this 1st Singapore then 2. Malaysia and later Thailand !

The time Thailand was called the swiss of asia are over!

[chiang mai]

On channel news asia I always here Thailand is the hub of asia economic i not want belive this 1st Singapore then 2. Malaysia and later Thailand !

The time Thailand was called the swiss of asia are over!

The statistics don't lie!

http://www.nationmaster.com/country-info/compare/Malaysia/Thailand/Economy

[Robert24]

On channel news asia I always here Thailand is the hub of asia economic i not want belive this 1st Singapore then 2. Malaysia and later Thailand !

The time Thailand was called the swiss of asia are over!

In terms of manufacturing industry, Thailand's economy is way ahead of Malaysia and Singapore. Also in terms of GDP, the ranking would be Thailand ahead of Malaysia and Singapore. Singapore has a strong service sector in the financial industry.

But with regards to the size of the economy in Asia neither Singapore, Malaysia or Thailand is no 1. No 1 is China followed by Japan. I'm sure CNA wouldn't mention anything else.

[Naam]

http://www.cnbc.com/id/102478587

Disinflation, low demand, crash a coming

crash coming thursday after lunch

[Naam]

Now your starting to see what I knew all along Unless BOT comes out with new exchange rate along the lines Of say 44 to 1 USD that would in deed give Thailand a shot in it's economic engine that is needed. It would not only create more jobs and investments inflow but exports would double Construction would reboot defaults would halt because of new jobs allowing people who owe money earn and pay it back. The rate I suggested would have to remain in place at least 2 to 3 years then slowly adjust up wards. I would also venture a guess the expats living here would go on a buying spree unseen in Thailand in years Tourism would double if not triple. Crops prices would rise to to demand of feeding all the people coming into Thailand. And the BOT would be thought of as a genius. It boils down to supply and demand, You have the supply you need to create the demand.

[pattayasnowman]

Dec 4 2007 (Reuters) - Thailand has quietly abandoned the managed floating exchange rate of the baht it adopted in 1997 and reverted to the old system of a basket of currencies, the Nation newspaper reported on Tuesday.

Now using a basket of currencies, the BoT was managing the baht through a weighted average of movements of the major currencies in Thailand's foreign exchange reserves, it said.

It quoted a foreign exchange expert as saying the Thai reserves of more than $100 billion were held 60 percent in dollars, 30 percent in euros and 10 percent in yen.

So it is most heavily weighted in US$ and thus effectively pegged against the US dollar

It is not Floated that is it is not freely traded on the international currency markets.

My mistake earlier its the Yen not the BP that is the third currency in the basket

Edited April 18, 2015 by pattayasnowman

[Anthony5]

Yet the supported Baht stays strong!

But when it finally crashes, what will they say then?

They will say same as last time in 1997, that it's the fault of the foreigners, and raid foreign banks in Thailand.

[chiang mai]

Dec 4 2007 (Reuters) - Thailand has quietly abandoned the managed floating exchange rate of the baht it adopted in 1997 and reverted to the old system of a basket of currencies, the Nation newspaper reported on Tuesday.

Now using a basket of currencies, the BoT was managing the baht through a weighted average of movements of the major currencies in Thailand's foreign exchange reserves, it said.

It quoted a foreign exchange expert as saying the Thai reserves of more than $100 billion were held 60 percent in dollars, 30 percent in euros and 10 percent in yen.

So it is most heavily weighted in US$ and thus effectively pegged against the US dollar

It is not Floated that is it is not freely traded on the international currency markets.

My mistake earlier its the Yen not the BP that is the third currency in the basket

All of that was true in 2007, but what's happened since, with special emphasis on ASEAN, the demise of the Euro, China trade agreements, QE et al!

[lostoday]

Dec 4 2007 (Reuters) - Thailand has quietly abandoned the managed floating exchange rate of the baht it adopted in 1997 and reverted to the old system of a basket of currencies, the Nation newspaper reported on Tuesday.

Now using a basket of currencies, the BoT was managing the baht through a weighted average of movements of the major currencies in Thailand's foreign exchange reserves, it said.

It quoted a foreign exchange expert as saying the Thai reserves of more than $100 billion were held 60 percent in dollars, 30 percent in euros and 10 percent in yen.

So it is most heavily weighted in US$ and thus effectively pegged against the US dollar

It is not Floated that is it is not freely traded on the international currency markets.

My mistake earlier its the Yen not the BP that is the third currency in the basket

So you think the Thai baht is not traded on the international currency markets?

"The Thai Baht in the Forex Market

According to the Bank for International Settlements or BIS, the Thai Baht ranked 26^th among the most actively traded currencies in the forex market in April 2010, accounting for 0.2 percent of average daily forex market trading volume that month.

The Thai Baht trades most actively against the U.S. Dollar as the counter currency in the USD/THB currency pair. In the foreign exchange market, this pair is typically known as Dollar Baht. The Thai Baht lacks a popular nickname in the forex market, so it is typically referred to simply as the Thai Baht by forex traders."

http://www.ozforex.com.au/news-commentary/forex-wiki/currency-encyclopedia/thb

[chiang mai]

It is traded but not for delivery overseas.

[JetsetBkk]

Far be it from me to question this organisation's mathematical ability, but it does claim to have put forward three scenarios, all dependent on export growth being one of the following figures: 0.4%, 0%, -1% and 1.5%. While I fully appreciate that he is/ they are not comparing like with like (export growth and GDP are not the same), I make that four scenarios. This from a University of a Chamber of Commerce.

Is it me?

H.

Nobody expects the Spanish Inquisition...

[lostoday]

It is traded but not for delivery overseas.

Buying Thai Baht in the UK

Thai baht is widely stocked by most currency suppliers in the UK which means competition is strong,

Buying Thai Baht in the USA

1 USD is worth approximately 32 THB according to xe.com. Thai baht can be bought from most bureau de change.

You probably meant something else but the Baht is certainly traded internationally.

http://www.tripadvisor.com.sg/Travel-g293915-s601/Thailand:Banks.And.Money.html

Edited April 18, 2015 by lostoday

[KamalaRider]

I think it is being manipulated for some reason possibly pegged to the American dollar. I notice it rises and falls in tandem with the USA greenback. Bad news takes time to filter into exchange rates. I am waiting for a big move to bring money over.

No peg with the US$. As previously mentioned, the baht has weakened considerably against the US$ from 29 to now above 32. The problem is the baht relative strength to other Asian currencies and the Euro.

Stop telling people the exchange rate was 29 TBH for one US$, I'm getting paid in US$ and during three years now, the US$ have never been lower than 31 except for a quick drop at one point but BoT quickly called in the troops.

Maybe you should look at the charts of the USD/THB rate in post 120 and 121 to remind you of the times of the rate below 30. or maybe you remember the fight between the former Finance minister Kittirat with the BoT about the strength of the baht vs the $. remember?

Sorry, missed your post, have a vague memory of that fight, don't remember the outcome though.

Could you put in words what happened after, I'm truly interested to know more.

[KamalaRider]

Dec 4 2007 (Reuters) - Thailand has quietly abandoned the managed floating exchange rate of the baht it adopted in 1997 and reverted to the old system of a basket of currencies, the Nation newspaper reported on Tuesday.

Now using a basket of currencies, the BoT was managing the baht through a weighted average of movements of the major currencies in Thailand's foreign exchange reserves, it said.

It quoted a foreign exchange expert as saying the Thai reserves of more than $100 billion were held 60 percent in dollars, 30 percent in euros and 10 percent in yen.

So it is most heavily weighted in US$ and thus effectively pegged against the US dollar

It is not Floated that is it is not freely traded on the international currency markets.

My mistake earlier its the Yen not the BP that is the third currency in the basket

All of that was true in 2007, but what's happened since, with special emphasis on ASEAN, the demise of the Euro, China trade agreements, QE et al!

Wow, I thought you criticized me for saying the THB was pegged towards the US$ and NOTHING (much) have happened with Thai ASEAN fulfillments.

So what are you really saying, criticizing me for my wordings or do you have something substantial to say?

And are you saying pattayasnowoman (that hurt to write) is wrong or lying?

[pattayasnowman]

It is traded but not for delivery overseas.

Buying Thai Baht in the UK

Thai baht is widely stocked by most currency suppliers in the UK which means competition is strong,

Buying Thai Baht in the USA

1 USD is worth approximately 32 THB according to xe.com. Thai baht can be bought from most bureau de change.

You probably meant something else but the Baht is certainly traded internationally.

http://www.tripadvisor.com.sg/Travel-g293915-s601/Thailand:Banks.And.Money.html

Yes its traded - but it is value is not determined by open (free) market bidding .

[lostoday]

It is traded but not for delivery overseas.

Buying Thai Baht in the UK

Thai baht is widely stocked by most currency suppliers in the UK which means competition is strong,

Buying Thai Baht in the USA

1 USD is worth approximately 32 THB according to xe.com. Thai baht can be bought from most bureau de change.

You probably meant something else but the Baht is certainly traded internationally.

http://www.tripadvisor.com.sg/Travel-g293915-s601/Thailand:Banks.And.Money.html

Yes its traded - but it is value is not determined by open (free) market bidding .

I think the Bank of Thailand’s Monetary Policy Committee (MPC) still meets to determine the appropriate level of the 14-day repurchase rate, its target variable. Its main goals are to maintain price stability and keep inflation between 0 and 3.5% per year. The repurchase rate also helps financial institutions determine where short-term interest rates should be. This all can affect buying and saving behavior of businesses and consumers, which has an impact on economic growth.

The value of the Baht is determined by the market. The BOT of Thailand can do many things to effect the value of the baht as can any country with a freely traded currency.

It's value is also effected by the international credit rating agencies such as Moodys .

Standard & Poors credit rating for Thailand stands at BBB+. Moodys rating for Thailand sovereign debt is Baa1. Fitchs credit rating for Thailand is BBB. In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of Thailand thus having a big impact on the country's borrowing costs.

For example when the UK's credit rating was cut sterling hit a two-and-a-half year low against the dollar and a 16-month low against the euro.

The same thing would happen to the Baht if the credit rating was cut by one of the international agencies.

Try googling Credit ratings, currency movements and you

Edited April 18, 2015 by lostoday

[oldsailor35]

It ha gone down hill ever since the Dems got rid of Thailands best ever PM. Thaksin. When he was in power the county was going ahead in "leaps and bound" but the "Born to rule" mob in Bangkok got rid of him.

[chiang mai]

Dec 4 2007 (Reuters) - Thailand has quietly abandoned the managed floating exchange rate of the baht it adopted in 1997 and reverted to the old system of a basket of currencies, the Nation newspaper reported on Tuesday.

Now using a basket of currencies, the BoT was managing the baht through a weighted average of movements of the major currencies in Thailand's foreign exchange reserves, it said.

It quoted a foreign exchange expert as saying the Thai reserves of more than $100 billion were held 60 percent in dollars, 30 percent in euros and 10 percent in yen.

So it is most heavily weighted in US$ and thus effectively pegged against the US dollar

It is not Floated that is it is not freely traded on the international currency markets.

My mistake earlier its the Yen not the BP that is the third currency in the basket

All of that was true in 2007, but what's happened since, with special emphasis on ASEAN, the demise of the Euro, China trade agreements, QE et al!

Wow, I thought you criticized me for saying the THB was pegged towards the US$ and NOTHING (much) have happened with Thai ASEAN fulfillments.

So what are you really saying, criticizing me for my wordings or do you have something substantial to say?

And are you saying pattayasnowoman (that hurt to write) is wrong or lying?

There's no critism intended of anyone/anything, merely trying to ensure that the real world picture emerges, piece by piece, all of which is quite hard to do since posts containing information and data keep getting deleted ad-hoc!

OK, so, it's true that BOT did appear to abandon a managed float system around 2007 in favour of a basket of currencies, the two things however are part of the same process. In realkity BOT operates a manged float system and part of that management process involves a basket of currencies, which, changes over time and has almost certainly changed since 2007, make sence?

Secondly and this primarily for other posters:

THB is a freely traded currency but BOT regulations do not allow it to be exported. It is possible to obtain THB overseas as a result of indivduals who have taken it back home and sold it back to their banks plus banks have accumulated fairly small amounts in other ways and this is generally sold on to consumers.

Finally and this comes back to the first point, the value of THB. Yes the market does determine the value of THB. But because it is a very small currency in global forex terms and all trades for delivery must be approved by BOT AND because BOT has such large foriegn currency reserves, it can be said that in reality, BOT determines the value of THB in line with their managed float system against a basket of currencies.

Finally finally! Thailands credit rating has little bearing on the value of THB. During recent military coups whilst there was fighting on the streets of Bangkok!

Edited April 18, 2015 by chiang mai

[Naam]

THB is a freely traded currency but BOT regulations do not allow it to be exported. It is possible to obtain THB overseas as a result of indivduals who have taken it back home and sold it back to their banks plus banks have accumulated fairly small amounts in other ways and this is generally sold on to consumers.

that is absolute nonsense! THB is indeed a restricted currency but offshore THB are available galore. these are the restrictions:

Dear Client,

Thai Baht Currency Restrictions

Further to the Bank of Thailand’s Measure No. 33/2003 (Additional Measure to Prevent Thai Baht Speculation), which came into effect in October 2003, XYZ Bank, Singapore Branch is subject to restrictions affecting its holdings of Thai Baht currency. These include the following:

Maintaining THB accounts in Thailand for settlement purposes only, where settlement means the settlement of securities transactions and cash payment transactions. The exception is for deposits of a tenor of at least 6 months or more.

Forfeiture of credit interest on its accounts (other than deposits of a tenor of at least 6 months or more)

Ensuring that the aggregated end of day balances for cash accounts with all financial institutions in Thailand do not exceed THB 300 million (the “Daily THB Limit”)

Imposition of deposit charge on THB account balances.

In relation to the Daily THB Limit, XYZ Bank, Singapore Branch will be required to adjust its Thai Baht balances in all its client accounts to be compliant with the permitted level as determined by the Thai authorities on a daily basis. As such accounts may include balances in Thai Baht held on your behalf, it is critical that we are able to adjust client THB balances to ensure compliance.

Accordingly, at any time that you are holding a long position in THB, we reserve the right in our absolute discretion and without prior notice to you to convert your holding of THB, in whole or part, into United States dollars at the prevailing spot rate.

Yours truly,

XYZ Bank, Singapore Branch

[Scott]

This topic is getting a little heavy on the currency side of the discussion. Perhaps a little more focus on the actual economic outlook of the country would be more on topic.

[lostoday]

Anyone know why tax privileges Thailand was eligible for under the European Union (EU) Generalised System of Preferences (GSP) was terminated. The result is that more than 6,200 Thai products exported to the EU will see cost increases of up to 90 per cent. What did Thailand do to upset the EU? Seems like the EU is really trying to crush the Thai economy.

[Anthony5]

Anyone know why tax privileges Thailand was eligible for under the European Union (EU) Generalised System of Preferences (GSP) was terminated. The result is that more than 6,200 Thai products exported to the EU will see cost increases of up to 90 per cent. What did Thailand do to upset the EU? Seems like the EU is really trying to crush the Thai economy.

I'm sure that question can't be a serious one, especially because you claim in other threads to know everything about Thailand.

[lostoday]

Anyone know why tax privileges Thailand was eligible for under the European Union (EU) Generalised System of Preferences (GSP) was terminated. The result is that more than 6,200 Thai products exported to the EU will see cost increases of up to 90 per cent. What did Thailand do to upset the EU? Seems like the EU is really trying to crush the Thai economy.

I'm sure that question can't be a serious one, especially because you claim in other threads to know everything about Thailand.

The question was why the EU GSP system was terminated by EU. I don't know why the EU does stuff, that's why I asked the question.

[Anthony5]

Anyone know why tax privileges Thailand was eligible for under the European Union (EU) Generalised System of Preferences (GSP) was terminated. The result is that more than 6,200 Thai products exported to the EU will see cost increases of up to 90 per cent. What did Thailand do to upset the EU? Seems like the EU is really trying to crush the Thai economy.

I'm sure that question can't be a serious one, especially because you claim in other threads to know everything about Thailand.

The question was why the EU GSP system was terminated by EU. I don't know why the EU does stuff, that's why I asked the question.

Supavadee Chaiyanukulkitti, director of the Trade Preference Division, recently said the European Union (EU) will cancel the Generalised Scheme of Preferences (GSP) with Thailand on January 1, as Thailand’s per capita income now exceeds the GSP rate.

http://www.nationmultimedia.com/national/Thai-exporters-told-to-adapt-models-ahead-of-EUs-c-30250411.html

[lostoday]

Anyone know why tax privileges Thailand was eligible for under the European Union (EU) Generalised System of Preferences (GSP) was terminated. The result is that more than 6,200 Thai products exported to the EU will see cost increases of up to 90 per cent. What did Thailand do to upset the EU? Seems like the EU is really trying to crush the Thai economy.

I'm sure that question can't be a serious one, especially because you claim in other threads to know everything about Thailand.

The question was why the EU GSP system was terminated by EU. I don't know why the EU does stuff, that's why I asked the question.

Supavadee Chaiyanukulkitti, director of the Trade Preference Division, recently said the European Union (EU) will cancel the Generalised Scheme of Preferences (GSP) with Thailand on January 1, as Thailand’s per capita income now exceeds the GSP rate.

http://www.nationmultimedia.com/national/Thai-exporters-told-to-adapt-models-ahead-of-EUs-c-30250411.html

Thanks

[IMA_FARANG]

The Chinese are making a strong effort to slow their rate of growth..... they call it "the New Normal". China will be importing less and buying less from it's neighboring countries in the next couple of years or so.

That means Thai exports to China will drop, which means a slowdown in the Thai 'economy".

Some people forecast China's growth rate to be down below 6% by 2017 in former 7% annual growth rate.

If so, that will mean big changes in Asian growth, including Thailand..

In addition the Chinese just announced new restrictions on trading on the Chinese stock market which has been going up to fast from speculation money flowing in form Chinese and foreign investors.

These restrictions and capital requirements are intended to slow down the "bubble" in runaway growth of the Chinese stock exchange..

This could affect Thailand as the Chinese stock market has been regarded as a good place to

make money by many wealthy Thais.

Edited April 19, 2015 by IMA_FARANG