Greek financial tragedy will have little impact on Thailand: Finance Ministry

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Greek financial tragedy will have little impact on Thailand: Finance Ministry
ERICH PARPART
THE NATION

BANGKOK: -- THE FINANCIAL problems Greece is facing have affected money and capital markets across the world, but its effects on the euro zone economy, the Thai currency and Thailand's export sector will be limited, the Finance Ministry said yesterday.

However, Asian capital markets have been hit, with the Stock Exchange of Thailand's index dropping by 15.57 points to 1502 basis points as of 3.30pm yesterday as the possibility of "Grexit" rises and is feared to cause panic selling. The turnover yesterday was Bt21.909 billion.

The decline in Thai shares is in line with regional movements where shares in Malaysia's Kuala Lumpur Composite Index, Indonesia's Jakarta Stock Exchange Composite Index and Singapore's Straits Times Index have dropped by 19.52, 46.24 and 42.18 points respectively during the same period.

The value of the euro currency strengthened from 1.1167 euro per US dollar on Friday to 1.1080 euro per dollar as of 3.30pm yesterday, while the Thai baht depreciated from Bt33.78 per greenback to Bt33.786 during the same period.

Maybank Kim Eng Securities expects the Thai currency to stand at around Bt34.5 per dollar by the end of the third quarter.

Gold fetched $1,179.55 (Bt39,892.40) per ounce yesterday compared to US$1,172.90 per ounce on Friday.

"The Thai government does not hold any Greek government bonds, which means we are not one of their creditors, so there will be no effect on Thailand's finances if Greece defaults on June 30 [today]," Finance Minister Sommai Phasee said yesterday.

"There will be some short-term effects due to the psychological impact, but the influence of the Greece situation will be limited and differ from the problems that hit Thailand during the 1997 tom yam goong crisis. This time, the crisis in Greece has been going on for a while, and most of Europe has already taken measures to deal with it," he added.

Sommai also said the mass withdrawals that forced Greek banks to close yesterday would not have much effect on the capital flow to Thailand, as it was more of a domestic problem.

Greece imposed controls yesterday by capping withdrawals at 60 euro per account per day for Greek nationals and restricting overseas cash transfers. There was no cap for foreigners. The Greek government said that banks would remain closed until July 7 - a sign that Greece is preparing for the impact of its default on the International Monetary Fund (IMF) 1.6-billion euro loan. Greece has not been given any additional aid and has until today to repay all its outstanding debts.

Krisda Chinavicharana, director-general of the Fiscal Policy Office, said: "Greece only accounts for 2 per cent of the euro zone economy and most of their debtors are not governments, but institutions, so there should be no effect on financial institutions in individual EU countries.

"The office is not concerned about the effects Grexit will have on Thai exports, as the impact will be limited. Also, the EU economy is still recovering and the effect on the Thai baht will be temporary," he added.

On a July 5 referendum, Greeks will be asked to decide on whether they will accept a draft agreement submitted by the European Commission, the European Central Bank and the IMF at a Euro group meeting held last Thursday.

Uwe Parpart, chief strategist and head of research at Hong Kong-based investment firm Reorient, said the referendum will not change anything as IMF's managing director, Christine Lagarde, had told the BBC late on Saturday that "legally speaking, the referendum will relate to proposals and arrangements which are no longer valid".

"As things now stand, Greece will run out of money by Tuesday and is unlikely to meet the 1.6-billion euro payment to the IMF. Once the Greek sovereign is bust, certainly the ECB [European Central Bank] can no longer uphold the fiction of the soundness of the Greek banks, a precondition for continued emergency liquidity assistance," Parpart added.

Source: http://www.nationmultimedia.com/business/Greek-financial-tragedy-will-have-little-impact-on-30263408.html


-- The Nation 2015-06-30

[Snig27]

It will have little impact until it's handy to blame it for a downward forecasts of course.

[Crazy chef 1]

nothing in this world can have an impact on Thailand...

[Anthony5]

Teflon Thailand once again.

[IamNoone88]

Correct. The collapse of Greece and the fallout will have little effect ....... when compared to 10 years of political Thai turmoil and equally poor governance.

[realfunster]

Quite amusing - this is from the front page of the Nation and includes comments from the Finance Ministry that there is little of concern.

However, front page of business section has the Commerce Ministry warning of impacts in Thailand from a Greek default/exit.

I'm siding more with the latter.

[MobileContent]

The Asian Financial Crisis in 97 started in Thailand and had a global impact and if the EU and Greece can't put their act together it will have dire consequences throughout the global markets.

[carstenp]

It will have little impact until it's handy to blame it for a downward forecasts of course.

yesterday they was saying it will hit the GDP down with 0.3%

Who is lying

[DM07]

Waiting for TAT to state something similar, concerning tourism in 5...4...3...

[lvr181]

Finance Ministry = blind freddy?

[realenglish1]

Thailand still has its head in the sand

If the Greek problem effects other economies it will also have an adverse affect on Thailand

Its the old saying

If you believe we are in a bad economic times then you stop spending and we are in a economic trouble

[Johnny S]

nothing in this world can have an impact on Thailand...

Dont you know that Thailand is the World ...

[NCC1701A]

lets see... no more UK/EU pensions, worthless euros and USD. civil war in Greece and kicked out of NATO and EU, sky high Baht or crashed with the rest of the world? take your pick. haircuts for all EU bank depositors, no more china real state market, japan, south korea, no more thai exports... no tourists, no airlines, no usa, no russia. puerto rico is collapsing right now. some US states to follow. 18 trillion dollar us fed debt. possible war with china. huge supply, no demand. yes thailand will be fine.

When is that train to Pattaya going to b finished? i need to spend my last federal reserve dollars...

Edited June 30, 2015 by NCC1701A

[Thai at Heart]

I suppose it is one European country they might be able to export some seafood to in a few months time, when the Grexit is complete

[englishoak]

I suppose it is one European country they might be able to export some seafood to in a few months time, when the Grexit is complete

Not that Greeks will be able to afford seafood, but I guess the EU tourists who will flock to Greece for a cheap holiday might.

[NeverSure]

I wouldn't want to have my wagon hitched to the EU right now...

[overherebc]

lets see... no more UK/EU pensions, worthless euros and USD. civil war in Greece and kicked out of NATO and EU, sky high Baht or crashed with the rest of the world? take your pick. haircuts for all EU bank depositors, no more china real state market, japan, south korea, no more thai exports... no tourists, no airlines, no usa, no russia. puerto rico is collapsing right now. some US states to follow. 18 trillion dollar us fed debt. possible war with china. huge supply, no demand. yes thailand will be fine.

When is that train to Pattaya going to b finished? i need to spend my last federal reserve dollars...

Don't know why you should worry about all that because tourist numbers will increase 5% a month in Thailand as they have always done, so, it'll be fine, really, honestly, no kidding, it's true, believe me.

[NeverSure]

I suppose it is one European country they might be able to export some seafood to in a few months time, when the Grexit is complete

Not that Greeks will be able to afford seafood, but I guess the EU tourists who will flock to Greece for a cheap holiday might.

"...the EU tourists who will flock to Greece for a cheap holiday might."

Not after they get the bill for Italy Spain Portugal Greece.

[Yunla]

Yet another frock covered in out-splurted morning coffee. I should start reading these headlines in a Sou'wester and oilskins.

[lvr181]

Ostriches can talk whith head in sand? Wow, I am impressed

[a99az]

Little!! depends how you view the loss of tourism from the Euro zone. Yes true it's is a little now but if the Greeks crash who knows how far the ripples will go.I would start to think about it and ready to act.

[jcisco]

I wouldn't want to have my wagon hitched to the EU right now...

I'd hate to be a rider in the greek Moochers wagon right now, the road of golden handouts and electoral moocher dominance may come to an abrupt end.

[chrisrazz]

indiegogo.com (Greece Bailout) A crowd funding exercise to raise money to help Greece has raised 1.83 million euros in 2 days. Anybody receiving pensions, now or in the near future, reliant on the markets should be contributing. Contribute either with direct donations or spreading this on your social networks. Though unlikely to fix the underlying problems or reach the target it would be good to show the banksters and political fraudsters the influence of 'people power'.

Edited July 1, 2015 by chrisrazz

[Thai at Heart]

They will have quite a problem if the euro collapses which if Greece goes will probably take less than a year or so