Thailand’s foreign reserves drop to US$158.5 billion

[Lite Beer]

Thailand’s foreign reserves drop to US$158.5 billion

BANGKOK: -- Thailand’s foreign reserves have dropped by 14 billion US dollars or 47.2 billion baht to 158.5 billion US dollars or 5.34 trillion baht as of May 29 at an exchange rate of 33.72 baht per one US dollar, according to the Bank of Thailand.

The forward position stood at 19.1 billion US dollars compared to a week earlier’s forward of 18.9 billion US dollars, resulting to net foreign reserves and forward position totaling 177.6 billion US dollars, said the central bank.

Analysts attributed the drop in foreign reserves to the assessment of assets in the form of baht currency whose value has dropped vis-à-vis the US dollars after the baht has weakened steadily.

Revolving fund in private sector and cash deposits of financial institutes held at the central bank stood at 1.557 trillion baht, a slight increase from last week’s 1.509 trillion baht, reflecting increased liquidity and consumers’ spending increase.

Source: http://englishnews.thaipbs.or.th/thailands-foreign-reserves-drop-to-us158-5-billion

-- Thai PBS 2015-06-05

[Naam]

oh dear! the end is near

[Manbing]

oh dear! the end is near

Actually that might not be the case. Sure the value of currency is based on the US dollar, and Thailand is in a economic downturn at present. But there's more to this than selling off dollars to pay Paul.

Dollars are a currency/commodity.

Sell when the price is high, buy cheaper currencies from countries where you might expect their currencies to rebound in the future, Look around for other currencies to speculate in, until you revert back to US dollars, when the price is low.

158 billion at a 1 percent profit is not a small dividend.

[ezzra]

Start a new rice, rubber, cheap cars, farmers hand outs schemes and that amount will be

soon gone too....

[noitom]

Who would really know what the Thais actually have. There is no real transparency. Thailand is totally opaque.

[Anthony5]

oh dear! the end is near

Actually that might not be the case. Sure the value of currency is based on the US dollar, and Thailand is in a economic downturn at present. But there's more to this than selling off dollars to pay Paul.

Dollars are a currency/commodity.

Sell when the price is high, buy cheaper currencies from countries where you might expect their currencies to rebound in the future, Look around for other currencies to speculate in, until you revert back to US dollars, when the price is low.

158 billion at a 1 percent profit is not a small dividend.

If only it was all that easy

[Calimotty]

Oh well being able to sell a couple of hot passports should pull it back a bit.

[SOUTHERNSTAR]

Doom and gloom again on TV today. But the reality is that Thailand still have a strong foreign reserve position compared to other countries in the region and the world. FX reserves in April 2015 Thailand had $ 161 BN, the UK $ 156 BN, France $ 141 bn, Germany $ 193 bn and the US $ 121 bn. So much for perceptions vs facts.

http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

[laubau]

My experiences can see why the foreign reserves in Thailand are dropping. I work in oil in another country and EVERY time I change money at Kasikorn Bank in Ban Pai, they will not take half of my US dollars. Kasikorn says this is because the rejected notes have a very small stamp on them from the bank of the foreign country. Almost every other bank takes this money. What total ignorance exhibited by Kasikorn!! Keep up the good work!!

[elgordo38]

Who would really know what the Thais actually have. There is no real transparency. Thailand is totally opaque.

Governments world wide massage numbers till they get them to the point of release. Not to hot and not to cold. We are spoon fed numbers. Happy numbers not sad ones.

[Konaboy1]

oh dear! the end is near

Actually that might not be the case. Sure the value of currency is based on the US dollar, and Thailand is in a economic downturn at present. But there's more to this than selling off dollars to pay Paul.

Dollars are a currency/commodity.

Sell when the price is high, buy cheaper currencies from countries where you might expect their currencies to rebound in the future, Look around for other currencies to speculate in, until you revert back to US dollars, when the price is low.

158 billion at a 1 percent profit is not a small dividend.

If only it was all that easy

Even the Thais cannot be sure of what they have in reserves. They do not account for the corruption discount!

With all the chat about vast sums to be spent on infrastructure, cleaning up the government, investigating the Southern insurrection, boat people, subsidies, National rail repair,etc etc.

I see a negative already. 1997? Deja Vue all over again?

Edited June 6, 2015 by ubonjoe
moved reply from quoted text

[Shiver]

Foreign reserve numbers aren't that meaningful on their own. If I have $10 assets and $20 liabilities, and I show you only the asset side ... well, you get the idea.

[Naam]

oh dear! the end is near

Actually that might not be the case. Sure the value of currency is based on the US dollar, and Thailand is in a economic downturn at present. But there's more to this than selling off dollars to pay Paul.

Dollars are a currency/commodity.

Sell when the price is high, buy cheaper currencies from countries where you might expect their currencies to rebound in the future, Look around for other currencies to speculate in, until you revert back to US dollars, when the price is low.

158 billion at a 1 percent profit is not a small dividend.

If only it was all that easy

Even the Thais cannot be sure of what they have in reserves. They do not account for the corruption discount!

With all the chat about vast sums to be spent on infrastructure, cleaning up the government, investigating the Southern insurrection, boat people, subsidies, National rail repair,etc etc.

I see a negative already. 1997? Deja Vue all over again?

i suggest you do a little homework and educate yourself what exactly forex reserves are and for what they are used instead of publishing ridiculous theories

[Robert24]

Foreign reserve numbers aren't that meaningful on their own. If I have $10 assets and $20 liabilities, and I show you only the asset side ... well, you get the idea.

The BoT publishes their balance sheet, you can look it up on their website, fully transparent. Both assets and liabilities.

[Robert24]

My experiences can see why the foreign reserves in Thailand are dropping. I work in oil in another country and EVERY time I change money at Kasikorn Bank in Ban Pai, they will not take half of my US dollars. Kasikorn says this is because the rejected notes have a very small stamp on them from the bank of the foreign country. Almost every other bank takes this money. What total ignorance exhibited by Kasikorn!! Keep up the good work!!

what does this have to do with BoT's foreign reserves?

[Srikcir]

Looks like someone has gone on a spending spree since mid-July 2014. And also about the same time period that BOT has tried to prop up the Thai BOT. Yuans, rubles and BRIC won't help Thailand's currency mess now. Only an increase in domestic consumption remains to grow the economy and household debt is the 800-pound gorilla there.

[Naam]

Looks like someone has gone on a spending spree since mid-July 2014.

one has to look at the bigger picture, e.g. foreign reserves in 1998 virtually zero compared to today's 158,000,000,000.- then it looks like "someone" has done a rather good job in accumulating reserves.

[OnMyWay2]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

[Manbing]

oh dear! the end is near

Actually that might not be the case. Sure the value of currency is based on the US dollar, and Thailand is in a economic downturn at present. But there's more to this than selling off dollars to pay Paul.

Dollars are a currency/commodity.

Sell when the price is high, buy cheaper currencies from countries where you might expect their currencies to rebound in the future, Look around for other currencies to speculate in, until you revert back to US dollars, when the price is low.

158 billion at a 1 percent profit is not a small dividend.

If only it was all that easy

Even the Thais cannot be sure of what they have in reserves. They do not account for the corruption discount!

With all the chat about vast sums to be spent on infrastructure, cleaning up the government, investigating the Southern insurrection, boat people, subsidies, National rail repair,etc etc.

I see a negative already. 1997? Deja Vue all over again?

i suggest you do a little homework and educate yourself what exactly forex reserves are and for what they are used instead of publishing ridiculous theories

Theories like 'oh dear the end is near?'

That was yours right?

[Robert24]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

you might be right on that. But it's still a lot more than most other emerging markets and to be honest even if the baht is falling more, say to about 40 to the $, I don't think BoT or the government would have a problem. Obviously if it falls much more than that, at some point inflation becomes an issue.

On the other side, I also don't think the FED is that interested in a very strong $. So that reversal trend may not happen that soon. But will see.

[Naam]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

about how much is about to get sucked out of Thailand's markets and what has that to do with the Thai forex reserves?

next thing i might read here is that the price of som tam in Nakhon Nowhere and the bar fines in Soi Cowboy "are about" to drain the reserves

[NeverSure]

Doom and gloom again on TV today. But the reality is that Thailand still have a strong foreign reserve position compared to other countries in the region and the world. FX reserves in April 2015 Thailand had $ 161 BN, the UK $ 156 BN, France $ 141 bn, Germany $ 193 bn and the US $ 121 bn. So much for perceptions vs facts.

http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

One of the main reasons that countries hold foreign reserves is so they can engage in foreign trade. I actually don't know if within Europe countries will buy and sell in Euro and Pounds interchangeably. If they do they wouldn't need as much reserve in USD which is the international unit of trade. The US doesn't need much foreign reserve because it has dollars.

Countries like China and Thailand need USD because most countries won't accept their currencies for trade.

Foreign reserves aren't necessarily a measure of wealth or liquidity as countries have to have them to trade. If Thailand and China sold all of their USD tomorrow they'd be out of the business of international trade, which is their bread and butter. BTW they usually hold their USD in US treasuries or debt. This may be where we (some people) get the myth that China has so much money it loans it to the US.

[morrobay]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

about how much is about to get sucked out of Thailand's markets and what has that to do with the Thai forex reserves?

next thing i might read here is that the price of som tam in Nakhon Nowhere and the bar fines in Soi Cowboy "are about" to drain the reserves

Whats " draining" Thailands so called 158 B in foreign currency reserves is the artificial propping up of the baht. Which is not sustainable - Forex always wins

[timewilltell]

Foreign reserves may be expressed in Dollars but not necessarily held in dollars !

[Naam]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

about how much is about to get sucked out of Thailand's markets and what has that to do with the Thai forex reserves?

next thing i might read here is that the price of som tam in Nakhon Nowhere and the bar fines in Soi Cowboy "are about" to drain the reserves

Whats " draining" Thailands so called 158 B in foreign currency reserves is the artificial propping up of the baht. Which is not sustainable - Forex always wins

"artificial" = unsubstantiated claim. where's the evidence? why are the reserves "so-called"? who of the resident eggsburts is qualified to judge what is sustainable or not and able to advise the Bank of Thailand in this respect?

[Robert24]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

about how much is about to get sucked out of Thailand's markets and what has that to do with the Thai forex reserves?

next thing i might read here is that the price of som tam in Nakhon Nowhere and the bar fines in Soi Cowboy "are about" to drain the reserves

Whats " draining" Thailands so called 158 B in foreign currency reserves is the artificial propping up of the baht. Which is not sustainable - Forex always wins

"artificial" = unsubstantiated claim. where's the evidence? why are the reserves "so-called"? who of the resident eggsburts is qualified to judge what is sustainable or not and able to advise the Bank of Thailand in this respect?

I think OnMyWay2's comment was relating to the huge amount of QE liquidity that flooded the Global markets incl emerging markets. So once the FED takes some of that liquidity out (i.e. reduce their balance sheet + increase interest rates), the $ will strengthen and people who leveraged themselves with cheap $s have a problem. That's the reversal trend that may happen at some point and some people are worried about. For Thailand that relates mainly to corporates with a lot of $ denominated debt that may run into a problem. Also in such a reversal trend the $ will become a lot stronger against most EM currencies.

So whilst I think this will happen at some point, it may not happen right away. As long as there is no inflation pressure in the US, the FED will hesitate to reduce liquidity because they worry that a strong $ may weaken their economy. But once inflation picks up, they will have no choice.

So the link between QE reversal and foreign reserves of the BoT is obviously that the foreign reserves can be used to soften any sharp movements of the Thai baht. But as I said in my last post, I don't think the BoT or the government would have an issue with a weaker baht, say I don't think that 40 to the $ is an issue.

makes sense?

[Naam]

$155B does not sound like too much compared to the $85B per month quantitative easing program that's about to get sucked out of emerging markets.

Whats " draining" Thailands so called 158 B in foreign currency reserves is the artificial propping up of the baht. Which is not sustainable - Forex always wins

"artificial" = unsubstantiated claim. where's the evidence? why are the reserves "so-called"? who of the resident eggsburts is qualified to judge what is sustainable or not and able to advise the Bank of Thailand in this respect?

I think OnMyWay2's comment was relating to the huge amount of QE liquidity that flooded the Global markets incl emerging markets. So once the FED takes some of that liquidity out (i.e. reduce their balance sheet + increase interest rates), the $ will strengthen and people who leveraged themselves with cheap $s have a problem. That's the reversal trend that may happen at some point and some people are worried about. For Thailand that relates mainly to corporates with a lot of $ denominated debt that may run into a problem. Also in such a reversal trend the $ will become a lot stronger against most EM currencies.

So whilst I think this will happen at some point, it may not happen right away. As long as there is no inflation pressure in the US, the FED will hesitate to reduce liquidity because they worry that a strong $ may weaken their economy. But once inflation picks up, they will have no choice.

So the link between QE reversal and foreign reserves of the BoT is obviously that the foreign reserves can be used to soften any sharp movements of the Thai baht. But as I said in my last post, I don't think the BoT or the government would have an issue with a weaker baht, say I don't think that 40 to the $ is an issue.

makes sense?

no it doesn't because it draws parallels and assumes conditions prevailing pre 1997 (extremely high corporate debt non-THB denominated) which does not exist nowadays.

anybody who is interested to invest in Thailand but in corporate debt denominated in USD, EUR, GBP or SGD (just to name a few currencies) will have to use a magnifying glass to identify the possibilities. no problem in the mid 90s when every bank or big corporation down to some small Somchai Co. Ltd. was indebted in non-Thai forex till the upper part of the lower lip and some till eye level.

[morrobay]

Re Thailands foreign currency reserves : In yesterdays paper headline said Thai social security admin is unhappy that government is borrowing 200 billion baht from its fundt for infrastructure projects.

Edited June 9, 2015 by morrobay

[KittenKong]

Foreign reserve numbers aren't that meaningful on their own. If I have $10 assets and $20 liabilities, and I show you only the asset side ... well, you get the idea.

The BoT publishes their balance sheet, you can look it up on their website, fully transparent. Both assets and liabilities.

My condo building management also publishes their balance sheet. It is full of errors and ommissions. I know where to look for these because as a committee member I have access to (some of) the real figures, but most people viewing the building accounts do not. Therefore they are none the wiser.

Official documents issued in Thailand are not high on my list of absolute truths.

[Robert24]

Re Thailands foreign currency reserves : In yesterdays paper headline said Thai social security admin is unhappy that government is borrowing 200 billion baht from its fundt for infrastructure projects.

this is the government not the BoT. Nothing to do with the foreign reserves of the BoT.