Thailand surprises with cut in interest rate

[Pib]

I bank with SCB and you do not think the smart money knew ahead of the announcement and also at the days end SCB was paying 25.04 and I do no convert in NZ in the end the thai Bhat dropped in my case v the nz because of the announcement from yesterdays 24.3 to between 25.05 I just happend to clip the ticket at 24.89 from yesterdays price. You happy now for I am??????

Naw, the great majority of economists/traders/money exchangers were unsure to surprised...that's why you saw the healthy spike "right after" the BOT announcement for numerous currency THB currency pairs. If the smart money had known in advance you would not have seen much of spike. Plus, the NZ $ along with some other currencies paired against the baht has been rising for about a week now due to weak economic data coming out on the Thai economy, but most money traders still felt BOT was not ready to move just yet....seems most was guessing it would occur at their 10 June meeting. And the NZ $ has been rising against other currency pairs like the US $ for about two weeks now which also helps it against the baht...see below.

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And then what one country's central bank giveth (like the BOT surprise rate cut) to help exchange rates, another country's central bank such as the New Zealand central bank taketh away with their comments yesterday afternoon. Partial quote regarding NZ Central Bank comments yesterday afternoon about the same time the BOT released its rate cut:

http://www.smh.com.au/business/markets/new-zealand-central-bank-holds-rates-but-says-easing-demand-may-bring-cut-20150429-1mwgop.html

New Zealand's central bank held its benchmark interest rate at 3.5 per cent on Thursday, as expected, and said it was not considering raising rates at the moment while adding that weaker demand may warrant easing down the line.

The New Zealand dollar shed more than half a US cent in immediate response to dovish comments from the Reserve Bank of New Zealand.

Using the Bangkok Bank TT Buying Rate for yesterday close of business the NZD-THB was 24.99; this morning opening rate was 24.85. Yeap, what one country's central bank giveth, another can taketh away.

[Robert24]

Well, I didn't major in economics and there are a lot of you smarter than me.

But, to say that devaluation of the baht won't help an agricultural country is something I can't understand.

It would help tourism also IMO.

Maybe someone can explain it for me: How a lower baht would hurt Thailand economically.

It won't hurt Thailand if the baht weakens say up 10-15% because about 60-70% of GDP is related to exports. However if there is a big devaluation it will hurt a lot, ie it will increase inflation a lot and it may destabilize companies who have borrowed a lot in foreign currencies.

But my view is that the baht stays relatively stable. Real interest rates are positive which is quite attractive for foreign investors compared to many other currencies where real interest rates are negative.

[carlyai]

sh

The country needs more than .25% interest rate to fix the economy. It needs to devalue to encourage exports and ramp up tax reforms.

Mostimportantly, it needs to enter the 21st century and encourage more foreign investment. Allow foreign ownership of property, even if

they restrict to one property with a reasonable value - this would encourage foreigners to come here, purhase prooperties and boost the

building sector.

Adopting a more welcome and honest approach to trade agreements, would also be a good idea. But maybe Iam dreaming1

What you are proposing is common sense, unfortunately you are dreaming as you pointed out. I've always said that Thailand's income could be significantly increased if they allowed ownership of property even if they capped it at 2 rai. Trouble is those pesky foreigners will be digging it up and taking it with them ... that's their perception at least. Yes can't have foreigners stealing the land as their won't be any left for the Thai. It's a train of thinking that beggars belief in modern times and one of the reasons economic growth is restricted.

I think the foreigners the Thais had in mind when they made these laws were the Chinese, way back then.

[connda]

Surprising to whom?

[luckyman]

The baht did not react after last month' rate cut and neither will it this time around.

Reality bites, hey, General ?

According to the Kasikorn Website the GBP is now back at 50 for TT's; that's an improvement :-)

And just checking now Superrich is quoting £:50.25 and the $32.75 .......................

hurry up and do an exchange then, as it will all be gone very soon!

[luckyman]

The baht did not react after last month' rate cut and neither will it this time around.

Reality bites, hey, General ?

Wrong !! haven't you been watching the exchange rates ??

Well, hurry up and do an exchange then, as it will all be gone very soon!

[luckyman]

The baht did not react after last month' rate cut and neither will it this time around.

Reality bites, hey, General ?

Well it weakened quite a bit......have a look at the currency rates

hurry up and do an exchange then, as it will all be gone very soon!

[NeverSure]

The baht has been edging over 33 to the USD in intraday trading. I have no idea what it will do next.

[Robert24]

Surprising to whom?

To most economists who were surveyed about their view of an interest rate cut by the BoT on their April meeting.

[SunLover2]

The baht has been edging over 33 to the USD in intraday trading. I have no idea what it will do next.

Now 33.21 to the USD. The trend is your friend...

SL