Thailand takes a hammer to the baht

[webfact]

Thailand takes a hammer to the baht
Leslie Shaffer

BANGKOK: -- Thailand's baht has long out-muscled regional peers, but amid a stumbling economy, the central bank has pulled the plug on supporting the currency.

The Bank of Thailand (BOT) last week sent a triple whammy to the markets: In a surprise move, it cut its benchmark interest rate by 25 basis-points to 1.5 percent. In its statement, the BOT mentioned its concerns about the continued strength of the baht. That was followed up with the easing of some of the country's capital controls, which will allow more funds to flow out of the country.

"All three things marked a strong message," said Santitarn Sathirathai, an analyst at Credit Suisse, noting it's rare for the BOT to mention the currency level. "If there is appreciation in the baht again, which could happen due to the current account surplus, then the Bank of Thailand could intervene to cap appreciation and to cap outperformance over regional currencies."

Full story: http://www.cnbc.com/id/102647724

-- CNBC 2015-05-06

[trogers]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

[lostoday]

When was the last time the BOT wanted to support the currency? Is he nuts?

[ExPratt]

Suits me I have most of my dough in Malaysian Ringgit which dropped about 12% against the baht over the last 7 months , gone back up 4% over the last couple of weeks

[Denim]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

Have no fear. If labour win the coming UK election the pound will nosedive without any outside help.

[theguyfromanotherforum]

I am quite happy with the gains. It went from $CDN 25.5 to $27.5 in just 2 weeks.

I was wondering what the reason was.

[eeeya]

down against the $US .. nice to have a few extra baht to spend.

[Strangebrew]

Just another scam being run In Thailand LOS land of scams

[khwaibah]

From April 30 to this morning the baht has taken a hammering.

[trogers]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

Have no fear. If labour win the coming UK election the pound will nosedive without any outside help.

And the factories in the UK would have lots of OT...

[TallGuyJohninBKK]

One year on the Thai Baht vs the USD (May 2014 to May 2015):

Looks like the highest now since a brief spike in Jan 2014...and before that back to 2010. 10 year chart.

Edited May 6, 2015 by TallGuyJohninBKK

[quidnunc]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

If the baht falls in relation to regional currencies that means that the odds are overwhelming that it will also have fallen in relation to the dollar.

[oneday]

"All three things marked a strong message,"

I had to read the article several times to make sure I didn't miss it, but I only found TWO things..."reduce interest rate" and "ease capital controls". Can someone point out the 3rd thing they did?

[lopburi3]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

Well got 33.12 today for USD which is 2.7% more than I received several weeks ago so a change in the right direction.

[falang07]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

If the baht falls in relation to regional currencies that means that the odds are overwhelming that it will also have fallen in relation to the dollar.

definitely, if it falls, if falls against all currencies / gold and everything else

[TheCruncher]

From April 30 to this morning the baht has taken a hammering.

At the time of your posting the Baht hadn't been traded yet since 30 April.

Edit: Just notice that the first round of exchange is 7am. Wonder how they do this as the financial markets in Thailand are still closed at that time.

Edited May 6, 2015 by TheCruncher

[sfokevin]

Just another scam being run In Thailand LOS land of scams

It's not a scam... Its a scheme.... Not same same...

[lovinglife]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

It is impossible to choose which currencies you are strong/weak against, if the weaken the THB, it weakens against everything.

All countries are playing this game at the moment, the Eurozone is printing money like crazy, that's why it has depreciated so much, The Japanese too have been at it, and even the Chinese, want a weaker Yuan.

[manchesterlalala]

"All three things marked a strong message,"

I had to read the article several times to make sure I didn't miss it, but I only found TWO things..."reduce interest rate" and "ease capital controls". Can someone point out the 3rd thing they did?

Me too. I just read it again. Here is a suggestion:

1. BOT reduces interests rates by .25%

2. BOT puts out a statement mentioning it is concerned about the strength of the baht

3. BOT eases some capital controls

"The Bank of Thailand (BOT) last week sent a triple whammy to the markets: In a surprise move, it cut its benchmark interest rate by 25 basis-points to 1.5 percent. In its statement, the BOT mentioned its concerns about the continued strength of the baht. That was followed up with the easing of some of the country's capital controls, which will allow more funds to flow out of the country."

[mercman24]

would anyone of you learned gents would like to show a graph of the baht versus £ over a period, just interested.. thanks

[Praematura]

Don't hold your breath with a huge current account surplus from oil prices.

Rice and rubber prices going to need a sledgehammer to begin to be competitive.

[TheCruncher]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

It is impossible to choose which currencies you are strong/weak against, if the weaken the THB, it weakens against everything.

All countries are playing this game at the moment, the Eurozone is printing money like crazy, that's why it has depreciated so much, The Japanese too have been at it, and even the Chinese, want a weaker Yuan.

The Euro depreciated before they started printing, after they started the Euro has only appreciated.

[ExPratt]

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would anyone of you learned gents would like to show a graph of the baht versus £ over a period, just interested.. thanks

try this link

http://www.xe.com/currencycharts/?from=GBP&to=THB&view=10Y

[DaddyWarbucks]

"All three things marked a strong message,"

I had to read the article several times to make sure I didn't miss it, but I only found TWO things..."reduce interest rate" and "ease capital controls". Can someone point out the 3rd thing they did?

They publicized what they were doing with uncharacteristic candor... that's the third thing.

[steve654]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

It is impossible to choose which currencies you are strong/weak against, if the weaken the THB, it weakens against everything.

All countries are playing this game at the moment, the Eurozone is printing money like crazy, that's why it has depreciated so much, The Japanese too have been at it, and even the Chinese, want a weaker Yuan.

Canada loves to play this game too. Whenever our dollar moves up, out comes all the bad news about how everything is failing over here in the hopes it drives down the dollar which it usually does. If all that doesn't work, a cut to the interest rates seems to do the trick.

[Happyman108]

Looking forward to USD 1 = 35 Baht

[mikemac]

Just another scam being run In Thailand LOS land of scams

So it's true then, a fool and his money will be parted.

[Prbkk]

Key to this is not the rate against the USD but the regional currencies competing with Thailand. A lower Baht is good but it is still way too high

Edited May 6, 2015 by Prbkk

[ExPratt]

Fitch report on Thai Baht

05 May 2015 9:30 PM

Thai Rate Cut No Panacea for Feeble Economy

https://www.fitchratings.com/gws/en/fitchwire/fitchwirearticle/Thai-Rate-Cut?pr_id=984161

Fitch Ratings-Hong Kong/Singapore-05 May 2015: The Thai central bank's decision last week to cut the policy rate and relax capital account restrictions highlight the persistent weakness of Thailand's economic outlook, says Fitch Ratings. Thailand's credit risk profile balances the country's relatively weak macroeconomic performance against a strong policy framework, and the recent policy action does not change that fundamental assessment.

The Bank of Thailand (BoT) surprised the market by cutting the policy rate by 25bp to 1.50% on 30 April, and then eased rules on Thai residents' foreign investments and non-residents' ability to borrow in baht, effective 1 May. The central bank's decisions came as weak demand and production indicators point to a lackluster economic recovery after growth fell below 1% last year amid political uncertainty and disruption.

[Jeremy50]

The concern is the baht's appreciation against regional currencies.

So do not hope for a large fall against the dollar or pound.

There has already been quite a large fall against the pound - 4 baht in a few days.