Baht Likely To Stay High Until Mid-2007

[george]

Baht likely to stay high until mid-2007

BANGKOK: -- Economists predict continued baht strength until the middle of next year and a booming stock market, but warned that a more dramatic braking of the US economy could yet see funds flowing out of the region as fast as they have flowed in.

Usara Wilaipich, senior economist at Standard Chartered Bank in Bangkok, said at a seminar on Investment Prospect in the Year of the Pig held by the Stock Exchange of Thailand, that Thai investors need to monitor the economic development in the US closely.

She attributed the baht rise to the recent influx of foreign investment into the financial and stock markets, pushing the baht, along with other Asian currencies, to record highs. Investor sentiment has been buoyed by low inflation, low interest rates and a healthy trade balance, Usara added.

However, the country’s general election, scheduled for the third quarter of next year, might prompt foreign investors to re-evaluate the political outlook, she warned. Profit-taking of the baht at that stage should come as a no surprise, she added, noting that an exchange rate of Bt39 to a US dollar was a real possibility.

Visit Ongpipattanakul, deputy managing director of Trinity Securities, opined that the prospect of easier monetary conditions in the US in the not-too-distant future would help sustain the bullish activities in the Thai stock market. The US Federal Reserve is seen as likely to ease monetary policy next year as economic growth slows.

He said the SET index is likely to reach 760-770 early next year as a result. However, short-term profit-taking might cause sporadic volatility in the market.

--TNA 2006-12-03

[Francis Maube]

The Economist is going along the same line, however, the greenback is in line with its 30 years average. It was 25 Baht to the US$ before 97, so we can probably live with 36 and even a bit lower for a while.

[astral]

Hardly world class economics,

given the dramtic slide of the US$ in the last few days.

I get paid in $ so I now earn 22.5% less than I did 4 years ago,

relative to the GBP.

[Jai Dee]

Thai central bank details measures to rein in baht

BANGKOK, Dec 4 (Reuters) - Non-resident sell-buy Thai baht swaps must be at least six months against three months now, central bank chief Tarisa Watanagase said on Monday.

Other measures it was imposing to restrain the baht's rapid rise against the dollar included non-residents holding Thai bonds and treasury bills for at least three months, she told a news conference.

The baht was traded around 35.90 baht per dollar at 0753 GMT from Friday's eight-year high of 35.70.

Source: Reuters - 4 December 2006

[Jai Dee]

Commerce minister to meet finance minister about strong Baht

Commerce Minister Krirkkrai Jirapaet said Monday he will meet with Finance Minister Pridiyathorn Devakula today to discuss measures which can help local firms deal with the strength of the baht, which hit a fresh eight-year high last week.

Exporters have been complaining as the dollar declines, but Krirkkrai said they should focus on the dollar value of their exports.

The strong baht is not all bad for the country, as it lowers the price of imports, he said.

Krirkkrai didn't elaborate on the measures to be discussed with Finance Minister

The dollar was quoted at Bt35.905 today, up from Bt35.86 in early trade due to profit-taking ahead of a press conference to be held by the Bank of Thailand today.

The central bank is expected to announce measures to tighten its restrictions on the supply of baht available to speculators, as it warned it would do after the dollar fell to an 8-year low of Bt35.72 Friday.

Source: The Nation - 4 December 2006

[chuchok]

Exporters have been complaining as the dollar declines, but Krirkkrai said they should focus on the dollar value of their exports.

The strong baht is not all bad for the country, as it lowers the price of imports, he said

Profound stuff.

So while the country is getting much less for exports,the price of fully built up cars will be reducing.Now that really helps the majority of the population.....

[stoneman]

Profound stuff.

So while the country is getting much less for exports,the price of fully built up cars will be reducing.Now that really helps the majority of the population.....

One thing that you need to remember is that the number 1 US$ expenditure in Thailand is imported oil and to be able to buy oil at 35 baht instead of 37 or 38 baht is a significant saving. Also I think there are a bunch of new airplanes and subway and skytrain cars to be bought... So I think the govt will continue to allow the speculators to feast on the baht as long as it is good for the govt and they will continue to tell the exporters that there is nothing the govt can do and they should learn to be more efficient.