webfact Posted July 26, 2015 Share Posted July 26, 2015 FOREIGN EXCHANGEBOT receives foreign exchange warningErich ParpartThe Nation BANGKOK: -- The Bank of Thailand (BOT) should think twice before increasing its usage of foreign exchange rates as one of the central bank's monetary targets since Thailand's hand is already showing and the repercussions could be severe, said Usara Wilaipich, senior economist at Standard Chartered Bank."If we leave it to the fundamentals and we are more patient, the baht will be weaker by itself in the next five years from the increase of imports since the rate of investment will eventually increase as machines will expire and the private sector has practically not invested in the past eighteen years. Public investment is also increasing," she said.Thailand is carrying a current account surplus of US$2.127 billion as of May 2015 and the country is a net creditor with lending worth around $190 billion with a government debt of around $140 billion (46 per cent of the $373.8 billion gross domestic product).The country has a foreign exchange reserves worth $160.274 billion as of June, 2015, and it is a net importer of oil where the global price has dropped by 50 per cent to around $55 per barrel and expected to be at this level for a while from the increase in supply in the United States."I am personally concerned and surprised about the central bank's growing usage of foreign exchange rate as one of the monetary targets since it is costly and risky and we might be under the control of the market instead of being in control of our own rate," she added.Her call came after the BOT's Monetary Policy Committee (MPC) provided the depreciation of the Thai baht as one of the reasons why the committee has decided to consecutively cut the policy interest rate in March and April this year.As a result, the baht has been trending down since the MPC's decision and the currency is currently heading towards a six-year low from the strengthening of the US dollar and foreign speculation that BOT will decide to cut the policy interest rate once again at their meeting on August 5.The baht was trading at Bt32.835 per US dollar on April 29 (the day of the consecutive cut) before trending down to closed at Bt34.895 last Friday on July 24.Supant Mongkolsuthree, chairman of the Federation of Thai Industries, who has been advocating for the baht to be weak to help exporters since the beginning of the year last week expressed his concern that the baht is depreciating too fast and it could hurt the country's financial stability and further worsen the private sector's sentiment to invest.Usara explained that Thailand is already showing our hand since even though we are a net creditor but there is only around $50 billion left to play with ($190 billion credit against $140 billion debt) against baht speculators, who together have much more capital and they know that the country will not allow its debts to trump its reserves."We can start to play with $50 billion in hand but later on we will be under the control of the speculators because they will come with collective hands and their character is to keep on playing, they will not stop, so the best way is to keep to the fundamentals and keep ourselves healthy," she said."Fast or slow the baht will weaken from the increase in imports but slower will be better for us in the long run since we need to invest and quickly weakening the baht would mean that investing will be more costly," she added.Source: http://www.nationmultimedia.com/business/BOT-receives-foreign-exchange-warning-30265255.html-- The Nation 2015-07-27 Link to comment Share on other sites More sharing options...
CNXTim Posted July 27, 2015 Share Posted July 27, 2015 The problem for the local economy and the THB value remains primarily one of fresh external investment. Whether it is for new enterprise or the replacement of aging plant and equipment. Currently, there is no indication that is or will improve. Link to comment Share on other sites More sharing options...
TheAppletons Posted July 27, 2015 Share Posted July 27, 2015 Credit Suisse is already predicting another rate cute from BoT, from 1.5% to 1.25% later this year due to the tanking economy. Link to comment Share on other sites More sharing options...
noitom Posted July 27, 2015 Share Posted July 27, 2015 The Thais are already on the run talking about "speculators playing." Link to comment Share on other sites More sharing options...
englishoak Posted July 27, 2015 Share Posted July 27, 2015 Naaa Thailand is booming, tourism is booming, everyones happy and rushing to invest here..... Link to comment Share on other sites More sharing options...
Thian Posted July 27, 2015 Share Posted July 27, 2015 Just wait untill the big boys start shorting the baht. Then there's no way to stop it, she 's right in that. But Thailand can also make Chinese investments in Yuan. Why do investments have to be in us$? Link to comment Share on other sites More sharing options...
stoli Posted July 27, 2015 Share Posted July 27, 2015 A lot of investors, whether they are big Boys or Small Fry, lose billions daily by shorting many different items. They make guesses, and hope it goes their way, but shorting does not mean they can force a win for themselves. Link to comment Share on other sites More sharing options...
Srikcir Posted July 27, 2015 Share Posted July 27, 2015 "we might be under the control of the market instead of being in control of our own rate," Thailand like Russia? What is staving off an even greater collapse of the ruble has been influx of domestic-owned foreign capital (aka USD) by the Russian oligarchy (ie., billionaire Putin) controlling the government. If the Junta wants to stay in power to the end of 2015 it must stem Thailand's collapsing baht in the same manner. I estimate that the Thai military and its "associates" are collectively worth more than $200 billion USD. It's time to decide if they too should privately reinforce their nation's currency or give up the reins of power. Link to comment Share on other sites More sharing options...
yuv06 Posted July 27, 2015 Share Posted July 27, 2015 I thought the retooling of machinery were already done after the flood of 2011 Link to comment Share on other sites More sharing options...
diehard60 Posted July 27, 2015 Share Posted July 27, 2015 The exchange rate should be at about 35 - 38 Baht / $. That is where it would be good for exporters. Link to comment Share on other sites More sharing options...
sfokevin Posted July 27, 2015 Share Posted July 27, 2015 ^^^ 40 is a more appropriate rate... A nice round number that makes it easier to calculate exchange rates in your head... Link to comment Share on other sites More sharing options...
allan michaud Posted July 27, 2015 Share Posted July 27, 2015 "we might be under the control of the market instead of being in control of our own rate," Thailand like Russia? What is staving off an even greater collapse of the ruble has been influx of domestic-owned foreign capital (aka USD) by the Russian oligarchy (ie., billionaire Putin) controlling the government. If the Junta wants to stay in power to the end of 2015 it must stem Thailand's collapsing baht in the same manner. I estimate that the Thai military and its "associates" are collectively worth more than $200 billion USD. It's time to decide if they too should privately reinforce their nation's currency or give up the reins of power. You estimate? Where do you get this figure from? It is quite possibly accurate (quite possibly a lot higher depending on who you chose to include) however if you are going to make such a sweeping statement how about providing some evidence please. Link to comment Share on other sites More sharing options...
Thian Posted July 27, 2015 Share Posted July 27, 2015 A lot of investors, whether they are big Boys or Small Fry, lose billions daily by shorting many different items. They make guesses, and hope it goes their way, but shorting does not mean they can force a win for themselves. Then you have no idea how the big boys work. If they all go short on the baht then it will go down, no matter if what or when. It happened to the euro, commodities and multinationals. Thailand has 50bn $ to play with, the hedgefunds together always have more. My wife is short on the baht since it was 35 to the euro. Now it's 38 but she 'll wait untill 45 or more. Link to comment Share on other sites More sharing options...
mommysboy Posted July 27, 2015 Share Posted July 27, 2015 A move from 31- 34 is more a fluctuation. In order to compete in exports with similar Asian countries it really needs a significant devaluation to around 40. Link to comment Share on other sites More sharing options...
masquerade Posted July 27, 2015 Share Posted July 27, 2015 ^^^ 40 is a more appropriate rate... A nice round number that makes it easier to calculate exchange rates in your head... Can't argue with that, simple is always better, only I would like to be the Aussie dollar also. Not one person in Thailandhas the mentality to understand money except for wanting as much as they can get the easiest way they can, so a litte convincing they will make big out of it and they will buy it. Link to comment Share on other sites More sharing options...
sawadee1947 Posted July 27, 2015 Share Posted July 27, 2015 Naaa Thailand is booming, tourism is booming, everyones happy and rushing to invest here..... Yeah...and manna will come from heaven........but then dreams shattered and you wake up....Oh shit... Link to comment Share on other sites More sharing options...
Jimlove Posted July 27, 2015 Share Posted July 27, 2015 Stick head in sand and think "Happiness" and all will be good ... TAT say all is good - Supreme Leader say Happiness is going back to people Thailand is #1 in World - Center of Universe, nothing can go wrong here Link to comment Share on other sites More sharing options...
SOTIRIOS Posted July 27, 2015 Share Posted July 27, 2015 ....when will all this 'pretend' end..... Link to comment Share on other sites More sharing options...
schvonsky1 Posted July 27, 2015 Share Posted July 27, 2015 Naaa Thailand is booming, tourism is booming, everyones happy and rushing to invest here.....Psml tourism booming not at all give heed a shake ?? Link to comment Share on other sites More sharing options...
Robert24 Posted July 27, 2015 Share Posted July 27, 2015 A lot of investors, whether they are big Boys or Small Fry, lose billions daily by shorting many different items. They make guesses, and hope it goes their way, but shorting does not mean they can force a win for themselves. Then you have no idea how the big boys work. If they all go short on the baht then it will go down, no matter if what or when. It happened to the euro, commodities and multinationals. Thailand has 50bn $ to play with, the hedgefunds together always have more. My wife is short on the baht since it was 35 to the euro. Now it's 38 but she 'll wait untill 45 or more. well shorting the baht is ok, but you are long the wrong currency. you should be long the $ and certainly not the Euro. Link to comment Share on other sites More sharing options...
NCC1701A Posted July 27, 2015 Share Posted July 27, 2015 construction is booming in Hua Hin. I'm waiting for the real estate bubble to pop. but it may never happen. Link to comment Share on other sites More sharing options...
Jim walker Posted July 27, 2015 Share Posted July 27, 2015 Dont panic the generals know exactly what they are doing the Baht is safe with us its all in hand everything is on the up and up, wont be long until Thailand is a super power. Link to comment Share on other sites More sharing options...
TallGuyJohninBKK Posted July 27, 2015 Share Posted July 27, 2015 Well, if they don't buy the Chinese submarines, they'd have another 30-40 billion baht to "play" around with.... That oughta help!!! Link to comment Share on other sites More sharing options...
Time Traveller Posted July 27, 2015 Share Posted July 27, 2015 A move from 31- 34 is more a fluctuation. In order to compete in exports with similar Asian countries it really needs a significant devaluation to around 40. That's a pretty big fluctuation - >10%.....the real problem is not the baht level. It's stability. No exporter can operate efficiently if their input costs are changing so often. Link to comment Share on other sites More sharing options...
LannaGuy Posted July 27, 2015 Share Posted July 27, 2015 any idea of effect on the GBP rate? Link to comment Share on other sites More sharing options...
gyrosman Posted July 27, 2015 Share Posted July 27, 2015 The problem for the local economy and the THB value remains primarily one of fresh external investment. Whether it is for new enterprise or the replacement of aging plant and equipment. Currently, there is no indication that is or will improve. How the about A.S.E.A.N? Its a system similar to the USA's NFTA. Trust me, I lived and worked in Singapore like the Maylasia, etc are licking their lips waiting to pounce on Thailand with its cash, better than China getting in. When the money comes, it will change. Right now a low baht brings foreign investment looking for a good deal. Link to comment Share on other sites More sharing options...
Thai at Heart Posted July 27, 2015 Share Posted July 27, 2015 Why are they starting now to target an exchange rate? Just let it find its own value. Link to comment Share on other sites More sharing options...
charmonman Posted July 27, 2015 Share Posted July 27, 2015 The concept that the baht has been weakening might seem strange to holders of currencies such as the Canadian dollar, the Australian dollar, the Indonesian rupiah etcetera. It seems to me the only reason the baht is "weakening" is that the US dollar is so strong relative to virtually every other currency in the world. Link to comment Share on other sites More sharing options...
easybullet3 Posted July 27, 2015 Share Posted July 27, 2015 (edited) i absolutely 'hate' the 180 baht ATM charge. I think its disgusting. (its dramatically HIGH, compared to thai living standards). i know why they did it, and I fully disresopect them for their greedy decisions. Edited July 27, 2015 by easybullet3 Link to comment Share on other sites More sharing options...
sfokevin Posted July 27, 2015 Share Posted July 27, 2015 i absolutely 'hate' the 180 baht ATM charge. I think its disgusting. (its dramatically HIGH, compared to thai living standards). i know why they did it, and I fully disresopect them for their greedy decisions. And most of us here disresopect you for being totally off topic and not being smart enough to find a credit card that reimburses you for the customary fee... Link to comment Share on other sites More sharing options...
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