Thailand’s foreign reserves drop to US$158.5 billion

[Naam]

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.

discussing the colours of a rainbow with blind people is as futile as discussing Einstein's theory of relativity with a bargirl in Walking Street or Soi Cowboy

[Robert24]

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.

"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?

well I can find plenty of debt issued by Thai listed corporates denominated in $ but it may well be less than pre Asian crisis. I don't have any data to compare. What is different now for sure is that the government has most debt issued in local currency, so I don't see an issue for the government.

But I guess we will see what happens to EM + Thailand once the FED tightens monetary policy. Going by what happened with Taper Tantrum, maybe it will be more rocky than you think. But then again, tightening by the FED may not happen as soon as people think. I guess we go with what Warren Buffet said “when the tide goes out, you can see who's been skinny dipping"

[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.

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.

personally I wouldn't compare the BoT with your condo building management but I guess you can question all central bank or government data in every country.

but I give more credit to people that have some arguments going with their points, i.e. if someone questions that the China GDP is growing 7% by pointing out that overall electricity consumption is negative yoy, or Korea + Taiwan exports to China are down yoy, than I think he has a point. Or say someone challenges the government's statistics on inflation on the basis of a flawed composition of the basket of goods/services used to calculate CPI, then I think he has a point.

[KittenKong]

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.

personally I wouldn't compare the BoT with your condo building management but I guess you can question all central bank or government data in every country.

It seems that most sectors of Thai life and government are subject to large amounts of corruption and dishonesty that just doesn't happen to anywhere near the same extent in the sort of countries I come from.

Why should the central bank be any different?

[morrobay]

http://en.wikipedia.org/wiki/Bank_of_Thailand

The Bank of Thailand is the Thai Central Bank. The Thai Central Bank is part of the Thai government

[Naam]

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.

personally I wouldn't compare the BoT with your condo building management but I guess you can question all central bank or government data in every country.

It seems that most sectors of Thai life and government are subject to large amounts of corruption and dishonesty that just doesn't happen to anywhere near the same extent in the sort of countries I come from.

Why should the central bank be any different?

what it seems is irrelevant. also irrelevant are bitching comments by resident expats as far as the balance sheet or the policies of the Bank of Thailand is concerned. of course it is a well known fact that the latter are targeting with negative effects mainly those expats because...

-they don't like us,

-they only want our money,

-they keep changing the goal posts,

-they charge foreigners additional 5 Baht for a bowl of soup.

[KittenKong]

It seems that most sectors of Thai life and government are subject to large amounts of corruption and dishonesty that just doesn't happen to anywhere near the same extent in the sort of countries I come from.

Why should the central bank be any different?

what it seems is irrelevant. also irrelevant are bitching comments by resident expats as far as the balance sheet or the policies of the Bank of Thailand is concerned. of course it is a well known fact that the latter are targeting with negative effects mainly those expats because...

-they don't like us,

-they only want our money,

-they keep changing the goal posts,

-they charge foreigners additional 5 Baht for a bowl of soup.

Irrelevant indeed, but all those last 4 are often true.

And I'm not bitching, just saying that I have very little faith in Thai accounting and official declarations.