Why doesn't the Thai baht move?

[Naam]

2 hours ago, Dustdevil said:

In fact under Obama the national debt has reduced,

 

 

Edited November 25, 2016 by Naam

[Naam]

latest on US national debt:

 

Quote

Today’s Federal Debt is $19,907,540,739,514.52

 

[Grubster]

15 hours ago, chiang mai said:

THB is not always at 35, if you look at the near history you'll see that against USD, it trades in a range of 29 to 36 in recent times.

 

BOT operates a managed float which means they intervene in the markets to smooth out any volatility in the exchange rate so as to protect export. Having said that BOT holds extremely large amounts of foreign currency reserves hence that, plus comparatively low levels of public debt etc etc means the baht remains naturally strong. 

 

Now queue the conspiracy theorists who will tell us the Bangkok elite are managing the exchange rate for their own self interests, when they do, ask they how they do and to provide proof.

How could someone provide proof as you have not done. Only talk is all you or anybody can do. I think the elite [as you say] are investing their money abroad, a strong baht is good for that, when they are finished with that they will let the baht crash and then sell their foriegn interests and buy whats left here. Is that a good conspiracy or what? Other countries try to keep an artificially low currency as to make there products more attractive in the world market don't they? Letting the baht fall would protect the Thai exports greatly as most economists here have been calling for.

[lannarebirth]

15 hours ago, Henryford said:

When the USA's National Debt reaches 40 trillion and the annual deficit is 3 trillion watch the dollar crumble.

 

OK, but crumble from what valuation?

[lannarebirth]

10 hours ago, Kabula said:

Because the European banker families who own the Central Banks and all of us want it that way!

 

It will go up and down depending on their agenda.

 

It's as simple as that!

 

 

Don't any of you folks watch the Bond market?

[elgordo38]

8 hours ago, chiang mai said:

 

I'm not sure where you're coming from with those remarks but look, if we're going to debate the subject let's at least have accurate facts and as many of them as possible otherwise it's a pointless debate.

Lets have a little fun debating. Don't be a stick in the mud. 

[elgordo38]

8 hours ago, kenk24 said:

To the OP - - -  Would you prefer a lot more volatility? 

 

Rather than virgins, can I put in a request for a few talented professionals? 

Give me a second to find my magic wand darn it. Love the humor. Some people get so serious on here. 

Signed

Funny Fat Foreigner

[hawker9000]

17 hours ago, Henryford said:

When the USA's National Debt reaches 40 trillion and the annual deficit is 3 trillion watch the dollar crumble.

'Been saying this for years & years.  <yawn>   But no.  The "progressive" strategy will be to inflate their way out of the debt (which'll look good compared to the govt austerity common sense already dictates).  Retirees, welfare class & low-to-middle income earners will take it on the chin, but fail to understand where the pain is actually coming from.  The result will be a greater & greater divide between the have & the have-nots, which socialist-progressives will then spin into the usual vast right-wing conspiracy crap.  Mainstream media will as always be glad to help.

 

As for the Thai baht, it actually hasn't shown much trend in quite awhile now (the last 18 months). Short-lived spikes a little above 36 BHT/USD last fall and in Jan of this year, and that's about it.  (The highs & lows mentioned elsewhere in this thread are practically ancient history at this point.  Even going back to 2007 the highs & lows were certainly tradable, but not exactly breath-taking.)  Their reputedly vast foreign currency reserves may explain it.  But I tend to think it's that coupled with pegging the baht and discouraging speculators being simply one thing Thailand happens to do extraordinarily well. 

Edited November 25, 2016 by hawker9000

[YeahSiam]

The prevailing "logic" - for the moment - is that Trump's US fiscal stimulus will stoke inflation.

This, apparently, will force either the Fed or the market to push US interest rates up.

This, apparently, makes the US dollar more attractive as an investment.

[dave_boo]

6 hours ago, Naam said:

latest on US national debt:

 

 

I'll pull 20฿ out and knock it down to a round number (and no I don't need change back).

[chiang mai]

13 hours ago, Shiver said:

I'd like to see the 'basket of currencies' weighting that the Baht is pegged to.  I have thought for many years that it must be 80-90% USD.

 

I don't think the USD is getting stronger, but all the peripheral currencies are taking the dive first and they revolve around the USD as the global currency, so may be the last one to go down the plug hole unless there are some break away actions from other countries.

 

 

The Baht is not pegged, the central bank operates a floating peg which means it intervenes to smooth out volatility.

 

Foreign currency reserves, the last time I looked, contained 22 different currencies including those of ASEAN and the major trading partners including Japan, China, UK, EU, Australia, USD was something like 60% as I recall. and India - reserves as a whole however are expressed in USD even if they are not all held in that currency.

[chiang mai]

5 hours ago, Grubster said:

How could someone provide proof as you have not done. Only talk is all you or anybody can do. I think the elite [as you say] are investing their money abroad, a strong baht is good for that, when they are finished with that they will let the baht crash and then sell their foriegn interests and buy whats left here. Is that a good conspiracy or what? Other countries try to keep an artificially low currency as to make there products more attractive in the world market don't they? Letting the baht fall would protect the Thai exports greatly as most economists here have been calling for.

 

Far too many questions here:

 

Who are these elite?

 

How much money do they have between them?

 

Is the sum total of their wealth sufficient to influence and control the entire Thai economy?

 

And if their money is invested abroad, how do they manage to influence THB, given that it's a semi-restricted currency which is only capable of large scale exchange inside Thailand?

 

And when "they sell their foreign interests and buy what's left here", that would require exchanging foreign currency for THB which would cause THB to soar in value, would it not?

 

Finally a quiz: where has BOT spent more money in the past five years. (A) propping up THB to make it stronger, OR  (B) in attempts to weaken the currency to prevent it from becoming overly strong?

[marquis22]

16 hours ago, elgordo38 said:

Love your statement when I watch one new car after another drive down the street. I guess all the articles in the news of high debt here in Thailand are pure fiction. 

Same thought, as many Thais I know (one in particular) have a huge debt, especially from buying new cars.

[bokningar]

1 hour ago, chiang mai said:

 

Far too many questions here:

 

Who are these elite?

 

How much money do they have between them?

 

Is the sum total of their wealth sufficient to influence and control the entire Thai economy?

 

And if their money is invested abroad, how do they manage to influence THB, given that it's a semi-restricted currency which is only capable of large scale exchange inside Thailand?

 

And when "they sell their foreign interests and buy what's left here", that would require exchanging foreign currency for THB which would cause THB to soar in value, would it not?

 

Finally a quiz: where has BOT spent more money in the past five years. (A) propping up THB to make it stronger, OR  (B) in attempts to weaken the currency to prevent it from becoming overly strong?

https://en.wikipedia.org/wiki/List_of_Thais_by_net_worth

 

Ranking	Name	Citizenship	Net Worth (USD)	Sources of wealth
1	Dhanin Chearavanont & family	Thailand	14.4 billion	Charoen Pokphand Group
2	Charoen Sirivadhanabhakdi	Thailand	13 billion	ThaiBev
3	Tos Chirathivat & family	Thailand	12.3 billion	Central Group
4	Chalerm Yoovidhya	Thailand	9.6 billion	Red Bull
5	Krit Ratanarak	Thailand	4.7 billion	Bangkok Broadcasting & TV
6	Vanich Chaiyawan	Thailand	4 billion	Thai Life Insurance
7	Santi Bhirombhakdi & family	Thailand	2.9 billion	Boon Rawd Brewery
8	Prasert Prasarttong-Osoth	Thailand	2.8 billion	Bangkok Dusit Medical Services
9	Vichai Srivaddhanaprabha	Thailand	2.5 billion	King Power
10	Thaksin Shinawatra & family	Thailand	1.7 billion	SC Asset
11	Ratch Osathanugrah & family	Thailand	1.6 billion	Osotspa
12	Keeree Kanjanapas	Thailand	1.6 billion	BTS Group Holdings
13	Wichai Thongtang	Thailand	1.5 billion	CTH
14	Chatri Sophonpanich & family	Thailand	1.5 billion	Bangkok Bank
15	Rit Thirakomen & family	Thailand	1.5 billion	MK Restaurant
16	Isara Vongkusolkit & family	Thailand	1.5 billion	Mitr Phol Group
17	Thongma Vijitpongpun	Thailand	1.4 billion	Pruksa Real Estate
18	Prayudh Mahagitsiri & family	Thailand	1.4 billion	Quality Coffee Products
19	Vichai Maleenont & family	Thailand	1.4 billion	BEC-TERO
20	Praneetsilpa Vacharaphol & family	Thailand	1.3 billion	Thai Rath

 

[chiang mai]

3 minutes ago, bokningar said:

https://en.wikipedia.org/wiki/List_of_Thais_by_net_worth

 

Ranking	Name	Citizenship	Net Worth (USD)	Sources of wealth
1	Dhanin Chearavanont & family	Thailand	14.4 billion	Charoen Pokphand Group
2	Charoen Sirivadhanabhakdi	Thailand	13 billion	ThaiBev
3	Tos Chirathivat & family	Thailand	12.3 billion	Central Group
4	Chalerm Yoovidhya	Thailand	9.6 billion	Red Bull
5	Krit Ratanarak	Thailand	4.7 billion	Bangkok Broadcasting & TV
6	Vanich Chaiyawan	Thailand	4 billion	Thai Life Insurance
7	Santi Bhirombhakdi & family	Thailand	2.9 billion	Boon Rawd Brewery
8	Prasert Prasarttong-Osoth	Thailand	2.8 billion	Bangkok Dusit Medical Services
9	Vichai Srivaddhanaprabha	Thailand	2.5 billion	King Power
10	Thaksin Shinawatra & family	Thailand	1.7 billion	SC Asset
11	Ratch Osathanugrah & family	Thailand	1.6 billion	Osotspa
12	Keeree Kanjanapas	Thailand	1.6 billion	BTS Group Holdings
13	Wichai Thongtang	Thailand	1.5 billion	CTH
14	Chatri Sophonpanich & family	Thailand	1.5 billion	Bangkok Bank
15	Rit Thirakomen & family	Thailand	1.5 billion	MK Restaurant
16	Isara Vongkusolkit & family	Thailand	1.5 billion	Mitr Phol Group
17	Thongma Vijitpongpun	Thailand	1.4 billion	Pruksa Real Estate
18	Prayudh Mahagitsiri & family	Thailand	1.4 billion	Quality Coffee Products
19	Vichai Maleenont & family	Thailand	1.4 billion	BEC-TERO
20	Praneetsilpa Vacharaphol & family	Thailand	1.3 billion	Thai Rath

 

 

And?

[johnnybgood]

14 hours ago, IMA_FARANG said:

According to a report I just read the Thais have a large Baht foriegn currency surplus (in Dollars) they can use to keep the Baht stable againdt the Dollar.

Not sure about that, but that is what the report said.

 

 

 

Maybe this report? They seem to have a strong defense against speculators.

 

http://www.bloomberg.com/news/articles/2016-11-24/in-asia-currency-reserve-checkup-two-countries-come-out-on-top

[Grubster]

2 hours ago, chiang mai said:

 

Far too many questions here:

 

Who are these elite?

 

How much money do they have between them?

 

Is the sum total of their wealth sufficient to influence and control the entire Thai economy?

 

And if their money is invested abroad, how do they manage to influence THB, given that it's a semi-restricted currency which is only capable of large scale exchange inside Thailand?

 

And when "they sell their foreign interests and buy what's left here", that would require exchanging foreign currency for THB which would cause THB to soar in value, would it not?

 

Finally a quiz: where has BOT spent more money in the past five years. (A) propping up THB to make it stronger, OR  (B) in attempts to weaken the currency to prevent it from becoming overly strong?

Answer #1 They are the people who call the shots and their cronies, would I need to know their names for my blanket statement to have any truth? #2  I have no idea, but its a lot. #3 They use their Power to control. #4 Again they use their power. #5 They will only buy when it works in their favor, it won't happen over night. #6 B is what they say they are doing, A is what their doing.   The Thai manufacturing sector has been screaming like a crushed cat for allowing the baht to fall for a few years.

 

            Question for you.  Have countries not manipulated their currencies to favor their exports? How do they do that? Why couldn't Thailand do that?

 

 

 

 

 

 

[chiang mai]

4 minutes ago, Grubster said:

Answer #1 They are the people who call the shots and their cronies, would I need to know their names for my blanket statement to have any truth? #2  I have no idea, but its a lot. #3 They use their Power to control. #4 Again they use their power. #5 They will only buy when it works in their favor, it won't happen over night. #6 B is what they say they are doing, A is what their doing.   The Thai manufacturing sector has been screaming like a crushed cat for allowing the baht to fall for a few years.

 

            Question for you.  Have countries not manipulated their currencies to favor their exports? How do they do that? Why couldn't Thailand do that?

 

 

 

 

 

 

 

Indeed some countries have manipulated the value of their currency to aid exports and Thailand could do the same. The way to do that is to sell your own currency and buy USD, that has the effect of weakening your own currency and strengthening USD. Thailand has abut  USD186 billion in foreign currency reserves which it could use to weaken the currency and it has done this several times in the past. The problem though is that the Baht is a naturally strengthening currency hence it becomes expensive to try and weaken it, a bit like King Canute trying to stop the tide coming in! Most importantly however is that we would know when the BOT is intervening in markets because this would be reflected in the value of the foreign currency reserves found below, thus far there is no indication of any action:

 

https://www.bot.or.th/English/Statistics/EconomicAndFinancial/Pages/StatInternationalReserves.aspx 

 

So back to the elite and their alleged manipulation of THB. Well first off, we don't see any manipulation of the BOT currency reserves hence they appear to not be using their influence on BOT to do the job for them. So that means they must be doing it themselves perhaps, maybe what they're doing is selling their own THB and buying USD in which case they, just like BOT, have lost shed loads of money over the years. And what about when they eventually want to sell their USD and buy back THB, that in itself causes THB to strengthen.

 

Nope, I'm sorry, but you haven't made a case that the elite are doing anything to manipulate THB, mostly because there's not really any way they can do that successfully. BTW you are aware that all sales of THB go through the BOT, even the elite's!

 

[Kwasaki]

17 hours ago, Cook my sock said:

When did Brexit happen? Did I miss it?

 

 OK I'll bite so typo but you knew what l meant the UK voted for Brexit and the article 50 thingy is no big deal while the presentation plan is being compiled.

[elgenon]

23 hours ago, Henryford said:

When the USA's National Debt reaches 40 trillion and the annual deficit is 3 trillion watch the dollar crumble.

 

 

The "Chicken Little" scenario has been around for many years. 10 years ago my bud sold everything in America and bought gold. Oops!

 

Wishful thinking doesn't create reality.

 

As above poster said : as long as the $ is the basis for the world it will do well. If that should change then whoops.

 

Would you rather hold yen or dollars? I see many Chinese continue to bring their money out of China to invest in the stability of the US. Even they don't trust the Chinese government.

[Kwasaki]

14 hours ago, Retiredandhappyhere said:

Fortunately, it recently recovered to around 44, which is very welcome for those of us expats whose total income is derived from the UK.

 

If someones intentions are to stay in Thailand there's nothing better than being a boy-scout. 

 

14 hours ago, Retiredandhappyhere said:

Visa requirement (at 808,000) whereas at an exchange rate of 44, he would have a slightly bigger margin at 846000, but still a bit precarious,

 

Agree to have work on 44 in the planning when £-Bht history is available is precarious indeed.

There is help available in Thailand, many ads on it. 

 

14 hours ago, Retiredandhappyhere said:

particularly if he has a wife and kid(s) over here and has to go back home.

 

Marriage is showing 400,000 for 3 months of the year or 40,000 per month income.

[Grubster]

19 minutes ago, chiang mai said:

 

Indeed some countries have manipulated the value of their currency to aid exports and Thailand could do the same. The way to do that is to sell your own currency and buy USD, that has the effect of weakening your own currency and strengthening USD. Thailand has abut  USD186 billion in foreign currency reserves which it could use to weaken the currency and it has done this several times in the past. The problem though is that the Baht is a naturally strengthening currency hence it becomes expensive to try and weaken it, a bit like King Canute trying to stop the tide coming in! Most importantly however is that we would know when the BOT is intervening in markets because this would be reflected in the value of the foreign currency reserves found below, thus far there is no indication of any action:

 

https://www.bot.or.th/English/Statistics/EconomicAndFinancial/Pages/StatInternationalReserves.aspx 

 

So back to the elite and their alleged manipulation of THB. Well first off, we don't see any manipulation of the BOT currency reserves hence they appear to not be using their influence on BOT to do the job for them. So that means they must be doing it themselves perhaps, maybe what they're doing is selling their own THB and buying USD in which case they, just like BOT, have lost shed loads of money over the years. And what about when they eventually want to sell their USD and buy back THB, that in itself causes THB to strengthen.

 

Nope, I'm sorry, but you haven't made a case that the elite are doing anything to manipulate THB, mostly because there's not really any way they can do that successfully. BTW you are aware that all sales of THB go through the BOT, even the elite's!

 

I can assure you that their are no non elites with any power at the BOT, and yes they can manipulate the baht as you have stated above. The fact that they haven't does not mean they shouldn't if it could help the economy.  As I said before the Thai economists and business sector has been screaming for it.  I only said that I think they are holding the baht artificially high.  When it falls it will do it hard, and it will work in the favor of the rich, probably a bit late for many businesses that have failed and will be owned by the banks etc.  A lower baht would sell rice too wouldn't it.

[chiang mai]

1 minute ago, Grubster said:

I can assure you that their are no non elites with any power at the BOT, and yes they can manipulate the baht as you have stated above. The fact that they haven't does not mean they shouldn't if it could help the economy.  As I said before the Thai economists and business sector has been screaming for it.  I only said that I think they are holding the baht artificially high.  When it falls it will do it hard, and it will work in the favor of the rich, probably a bit late for many businesses that have failed and will be owned by the banks etc.  A lower baht would sell rice too wouldn't it.

 

"I think they are holding the baht artificially high", how do they do that is the question?

 

And given that THB is currently at 35, the weakest it's been for quite some time, if they can't sell rice at that level when they were able to at 29, the strength of THB is not the problem.

[Naam]

9 hours ago, Grubster said:

Letting the baht fall would protect the Thai exports greatly as most economists here have been calling for.

you are forgetting that a lower Baht will also make imports more expensive. Thailand has a healthy trade balance but the difference imports/exports amounting to ~15% does not justify any calls to intervene in order to weaken the Baht.

Quote

Thailand is the 22nd largest export economy in the world and the 36th most complex economy according to the Economic Complexity Index (ECI). In 2014, Thailand exported $240B and imported $210B, resulting in a positive trade balance of $29.4B.

http://atlas.media.mit.edu/en/profile/country/tha/

 

[superdome]

On 11/25/2016 at 9:19 AM, Cook my sock said:

The country is considered stable ATM so the baht is strong. But Trump has def helped, it was up to 44 to the £ a few days back. Give it a couple of years, maybe Brexit won't happen and we'll be back to 55

Brexit wont happen....in your dreams...you must be a Tony Blair fan..UK is OUT OUT OUT...all you remainers get used to it...were out...got it

[Naam]

Just now, superdome said:

Brexit wont happen....in your dreams...you must be a Tony Blair fan..UK is OUT OUT OUT...all you remainers get used to it...were out...got it

did you get THIS?

Quote

The full ‘Brexit blow’ to the economy has been laid bare as the Chancellor revealed that output will shrink – while borrowing will balloon by £122bn.

 

Philip Hammond told MPs that economic growth was now forecast to be 2.4 per cent lower in 2020 than predicted back in March, because of the June referendum result.

The annual budget deficit is forecast to be £30bn in 2019-20, instead of the £10bn projected in March, a staggering £40 billion swing into the red.

http://www.independent.co.uk/news/uk/politics/brexit-uk-growth-forecast-autumn-statement-philip-hammond-a7433941.html

 

[superdome]

5 minutes ago, Naam said:

did you get THIS?

 

in life...always remember....believe nothing you read[from politicians] ans half you see...and you wont go far wrong...am 72 now,my dad told me that when i was a boy...have never forgotten.  

[Grubster]

28 minutes ago, chiang mai said:

 

"I think they are holding the baht artificially high", how do they do that is the question?

 

And given that THB is currently at 35, the weakest it's been for quite some time, if they can't sell rice at that level when they were able to at 29, the strength of THB is not the problem.

The Thai baht is much stronger now than it was at 29 baht per dollar. The strong dollar only means the baht is weaker against the dollar. I don't think it would be wise for you to be telling Europeans, Australians, Kiwi's, Russians, Chinese,Scandinavians etc that the Thai baht is weaker.

    If the Thai baht were 29 now, then rice and all other goods would be about 16% cheaper on the world market. Sales of all products would jump dramatically and so would tourism.

[Dustdevil]

13 hours ago, Naam said:

the Baht was never for a long time 31 to the Dollar but a long time 1970 till 1985 the rate was 20 and after 1985 till the float in 1997 the rate was 25.

 

here's a look at USD/THB (last 26 years):

 

Right. But it did hover around 30 to 32 from 2010 to 2014 based on the chart.

[Grubster]

32 minutes ago, Naam said:

you are forgetting that a lower Baht will also make imports more expensive. Thailand has a healthy trade balance but the difference imports/exports amounting to ~15% does not justify any calls to intervene in order to weaken the Baht.

 

 

37 minutes ago, Naam said:

you are forgetting that a lower Baht will also make imports more expensive. Thailand has a healthy trade balance but the difference imports/exports amounting to ~15% does not justify any calls to intervene in order to weaken the Baht.

 

Well obviously I disagree. Most of Thai imports are in products that they are not capable of producing themselves, like, oil, coal, electricity etc. etc. Yes if the baht weakened the price of these things would go up driving them to increase their domestic capacities of these things creating good jobs and boosting the economy. While their exports would increase dramatically creating many more jobs and making some of their failing products like rubber and rice much more attractive on the world market.