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[webfact]

BoT plays down baht volatility

  

BANGKOK, 1 September 2016 (NNT) - The private sector has called on the Bank of Thailand (BoT) to prevent the baht currency from appreciating too much and keep it at 34.50 baht to the U.S. dollar. 

BoT Governor Veerathai Santiprabhob on Wednesday declined to comment on an idea to fix the baht at a certain level. He said the central bank had continuously talked with the private sector about the baht situation and found that the private sector was still able to manage risks from currency exchange rates well, said the governor. 

The Thai currency has appreciated by around 4% since the beginning of this year. Malaysia’s ringgit, Korea’s won and Japan’s yen had strengthened more than the baht, said the governor. 

Mr. Weerathai added that the volatility of the baht would continue due to external factors, especially the monetary policy of advanced industrial countries. If the policy affected the Thai business sector and economy, the central bank would deploy tools to curb the baht, said the governor. 

 

-- nnt 2016-09-01

[Somtamnication]

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

[chiang mai]

20 minutes ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

 

The trend is unmistakably up, ignore that at your peril.

[Acharn]

2 hours ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

Strength? You mean back when it was 28.5 to the dollar? Good grief! That was before the coup, wasn't it? I could look it up of XE dot com, but am still working on my first coffee. Just to try to normalize our language here, 35.5 is weaker than 34.5. It means the same number of baht buys fewer dollars. I recall the baht fluctuated around 32 for over a year back six or seven years ago, then it strengthened to nearly 28. 28 is stronger than 32, because a given number of baht can buy more dollars.

[robblok]

2 hours ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

 

Its because there is a trade surplus and the country has a large reserve of currency. I like many others would like a lower baht but its unrealistic to think this will happen as long as there is a trade surplus and a large reserve of foreign currency. Just wishing it down won't help.

[Srikcir]

2 hours ago, webfact said:

that the private sector was still able to manage risks from currency exchange rates well

Yet just yesterday Chairman of the Thai National Shippers Council Mr Nopporn Thepsittha said,

Comparatively, the value of the currency of other competing countries such as Vietnam and China had fallen which has had a significant impact on Thailand’s exports..... if no effort is made to control the value of the national currency, exports will continue to suffer.

http://englishnews.thaipbs.or.th/exporters-voice-concern-export-contraction-year/

The problem for the BOT is that it seems inclined to follow Prayut's yarn that the economcy is recovering. And means do nothing.

[hobobo]

3 hours ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

It's like the Baht is on permanent Viagra! Time for a wee heart attack?

[chiang mai]

57 minutes ago, hobobo said:

It's like the Baht is on permanent Viagra! Time for a wee heart attack?

 

I suspect it will be TVF posters who will have the heart attacks when they realise what the new norm is.

[Baerboxer]

6 hours ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

 

What exactly do you think is suspicious?

 

Those charged with rigging Forex have been Westerners connected with multinational banks. 

[gandalf12]

4 hours ago, Acharn said:

Strength? You mean back when it was 28.5 to the dollar? Good grief! That was before the coup, wasn't it? I could look it up of XE dot com, but am still working on my first coffee. Just to try to normalize our language here, 35.5 is weaker than 34.5. It means the same number of baht buys fewer dollars. I recall the baht fluctuated around 32 for over a year back six or seven years ago, then it strengthened to nearly 28. 28 is stronger than 32, because a given number of baht can buy more dollars.

Back in the 80's it was a little over 25 to the dollar

[dageurreotype]

6 minutes ago, gandalf12 said:

Back in the 80's it was a little over 25 to the dollar

 

When somtum was 5 baht a bag. These back-in-the-day comparisons are silly.

[gandalf12]

1 minute ago, dageurreotype said:

 

When somtum was 5 baht a bag. These back-in-the-day comparisons are silly.

 

1 minute ago, dageurreotype said:

 

When somtum was 5 baht a bag. These back-in-the-day comparisons are silly.

No they are not silly. The exchange rate is not fixed as you obviously think to a bag of Som Tam. I would suggest you do a little reading of economics before engaging mouth

[Agent Sumo]

7 hours ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

 

The baht isn't strong. 

 

The GBP/EUR/AUD are just weak. People who've been calling for the baht to collapse will eventually be right since even a stopped clock is right twice a day but I don't think the BoT is going to emulate the idiots at Western central banks and introduce negative interest rates and quantitative easing any time soon.

 

You'd better try to get used to it and maybe lobby the government/central bank in whichever country you come from to stop debasing its currency

[elgordo38]

7 hours ago, Somtamnication said:

What goes up must come down. It is only a matter of time.  Never understood the baht's strength AND for so long. Highly suspicious. 

Yes I am suspicious to. I love his comment on tools its the same language that Yellen speaks although I think her tool box is rather empty so she must jaw bone to get her point across. She is really not being fair with the markets doing this. Thailand is an exporting tourism country and having a competitive currency is a must. I am amazed at this statement " He said the central bank had continuously talked with the private sector about the baht situation and found that the private sector was still able to manage risks from currency exchange rates well, said the governor." Usually manufacturers are constantly crying to the government to lower the currency strange? Tourism could take a hit with terrorism and the zika scare so it stands to reason that the currency should be competitive. Yes I know using the term stands to reason is out of place here in the LOS

[NCC1701A]

It aint the baht going up it's your country's currency going into the toilet, China included.

[Hawk]

How come the B.P. gives a different version of this story saying that exporters are complaining loudly.

 

Now the Bank of Thailand says the strengthening baht is okay, no problem but two weeks ago the very same Bank of Thailand was complaining about the strengthening baht as well and how it would affect the economic recovery.

 

As for the Malaysia ringgit I have noticed that it has lost value against the baht as well. It seems therefore only the baht is strengthening against all currencies which is bound to have repercussions sooner or later.

Edited September 1, 2016 by Hawk

[denkiblue555]

Why don't they just invoke section 44 to 'control the baht' - seems to solve everything else....lol

[elgordo38]

2 hours ago, Hawk said:

How come the B.P. gives a different version of this story saying that exporters are complaining loudly.

 

Now the Bank of Thailand says the strengthening baht is okay, no problem but two weeks ago the very same Bank of Thailand was complaining about the strengthening baht as well and how it would affect the economic recovery.

 

As for the Malaysia ringgit I have noticed that it has lost value against the baht as well. It seems therefore only the baht is strengthening against all currencies which is bound to have repercussions sooner or later.

Yes the ringgit has had its problems with the 1 mbd affair. Nabob is jailing people left and right who are challenging him on this. Its the old saying total power corrupts totally. His pockets are full of gold he more than likely has his trusty steed ordered to ride off into the sunset. This also has been the way of life in Africa for decades. Its riches stolen by politicians.  Mugabee will never live to spend all he has stolen. 

[Skeptic7]

7 hours ago, gandalf12 said:

Back in the 80's it was a little over 25 to the dollar

It was unrealistically pegged to the USD back then, which ultimately led to the collapse of the baht and Thai economy in 1997-98. Things were considerably cheaper back then, despite the low exchange rate.

[Skeptic7]

7 hours ago, Baerboxer said:

 

What exactly do you think is suspicious?

 

Those charged with rigging Forex have been Westerners connected with multinational banks. 

Don't know about suspicious, but it's amazing that Thailand suffers through 2 recent coups...martial law...violent and dangerous protests...airport shutdown...major intersection shutdowns during shutdown Bangkok...floods...droughts...terrorist attacks...unending political unrest and politically motivated bombings just recently...

 

...yet the baht still remains relatively strong. 

[joeyg]

1 hour ago, Skeptic7 said:

Don't know about suspicious, but it's amazing that Thailand suffers through 2 recent coups...martial law...violent and dangerous protests...airport shutdown...major intersection shutdowns during shutdown Bangkok...floods...droughts...terrorist attacks...unending political unrest and politically motivated bombings just recently...

 

...yet the baht still remains relatively strong. 

Isn't that why it's called "Amazing Thailand?"

[Naam]

9 hours ago, gandalf12 said:

Back in the 80's it was a little over 25 to the dollar

back in the 70s (till 85) it was 20 Baht for one Dollar.

[Acharn]

On 9/1/2016 at 0:33 PM, gandalf12 said:

Back in the 80's it was a little over 25 to the dollar

When I retired and came back to Thailand in 1982 the fixed rate was 22.5 to the dollar. In 1971, when I was first stationed here, it had been fixed at 20 to the dollar for many years. I don't recall when it was reduced to 25 to the dollar -- during the Chatchai government? Or under Chuan Leekpai? Anyway, after 1997 it dropped to the high 40s. I've seen a number of people claim it was over 50 for a while, but I did not observe that myself, or maybe I just don't remember. Anyway, it strengthened under Thaksin and the BoT has done a pretty credible job since of managing the floating rate so fluctuations are not so abrupt. I would be delighted if they would try to hold it around 34.5. Over 35 is even better for me, but I'm expecting the dollar to weaken after the Chinese economy collapses, so I guess it's probably going to go to 30 over the next couple of years. Trying to predict it is a mugs game, so don't fall for the foreign exchange scams out there, promising you can get rich from trading. Lots of Japanese housewives make a bit on the side with carry trade lending, but you need to know what you're doing.

[Acharn]

On 9/1/2016 at 7:37 PM, Skeptic7 said:

It was unrealistically pegged to the USD back then, which ultimately led to the collapse of the baht and Thai economy in 1997-98. Things were considerably cheaper back then, despite the low exchange rate.

Actually, at the time it was pegged to 25 that was a quite realistic rate. It was later, during the real estate bubble from about 1993 to 1997 that the fundamentals collapsed. By the way, Soros has always insisted that his company was not one of those which attacked the baht. I believe him, because it would enhance his reputation if he could say he succeeded against another overvalued currency. Yes, things were cheaper then. The low inflation we've experienced since about 2009 has been remarkable. It used to be normal to see 3% every year, certainly throughout the '90s.

Edited September 2, 2016 by Acharn
ETA: comment on low inflation rate.