Thailand ‘unlikely to be hit by Fed rate hike’

[webfact]

Thailand ‘unlikely to be hit by Fed rate hike’
By   SUCHEERA PINIJPARAKARN 
SOMLUCK SRIMALEE 
THE NATION 

 

BANGKOK: -- Emerging markets will see capital outflows after the US Federal Reserve (Fed) raised its key interest rate for the first time in 2016 by 25 basis points to 0.75 per cent, many experts believe.

 

But it will have less impact on Thailand as foreign investors here mostly hold Thai bonds totalling US$18 billion, according to Kobsidthi Silpachai, head of Capital Markets, Kasikornbank.

 

However, there could be an impact on the baht and the central bank has revised upward its 2017 foreign exchange target by 50 basis points to Bt36.50 against the US dollar.

 

He said the baht will not weaken as much against the US dollar as other regional currencies because Thailand has a current account surplus.

 

Yesterday, the baht closed at Bt35.77 to the dollar, weakening from Bt35.62 on Wednesday.

 

Banthoon Lamsam, chairman of the board and chief executive officer of Kasikornbank, added that the weakening of the baht following the Fed rate hike would benefit Thai exporters, although the capital outflow situation should be watched.

 

Full story: http://www.nationmultimedia.com/news/business/EconomyAndTourism/30302189

-- © Copyright The Nation 2016-12-16

[digibum]

The US Fed said that they will become more aggressive in raising rates in 2017.  These statements from Kobsidthi are looking at a snapshot event that does not take into account other likely events.  

 

Sort of like saying that the hurricane will not have much of an impact on my house because I live well outside the likely path of the storm, forgetting the flooding that will occur afterward because the house is downstream.  

 

 

[Prbkk]

Teflon Thailand as usual, all is wonderful in the LOS, nothing will cause any damage or problems: except no one will articulate why the economy is in the toilet , with worse times ahead. Playing to an audience is one thing but the problem is some of these officials and politicians actually believe the fantasy they spin.

[NongKhaiKid]

59 minutes ago, Prbkk said:

Teflon Thailand as usual, all is wonderful in the LOS, nothing will cause any damage or problems: except no one will articulate why the economy is in the toilet , with worse times ahead. Playing to an audience is one thing but the problem is some of these officials and politicians actually believe the fantasy they spin.

Oh yes but this and things like Brexit are kept up the sleeve to be magically produced when any excuse is needed.

Problems about the economy etc have to be sourced overseas.

[humqdpf]

Fed rate "HIKE"! A hike would be if they moved it to 5% or something like that. .25% increase (from .5 to .75%) is hardly a hike in anyone's language

[Prbkk]

9 minutes ago, humqdpf said:

Fed rate "HIKE"! A hike would be if they moved it to 5% or something like that. .25% increase (from .5 to .75%) is hardly a hike in anyone's language

 

Indeed: for those of us who can recall the days of 17% mortgages this seems a bit pale to be called a hike.

[Langsuan Man]

Right, no effect at all

 

[YeahSiam]

This time last year, the Fed said it was going to raise interest 3 or 4 times in 2016. They ended up hiking just once

On Wednesday, they said they're going to raise interest rates 3 or 4 times in 2017. It's not going to happen.

 

 When inflation does indeed kick in, they will allow it to run hot for fear of derailing economic growth.

The current euphoria can't last.

This isn't the 1980s and Trump is not Reagan.

This time next year, the dollar will be in the toilet.

 

Edited December 16, 2016 by YeahSiam

[soalbundy]

The fact that Thailand is now giving out helicopter money to the poor doesn't appear to be a harbinger of good news for the Thai economy. In the market town where i live in Isaan the road is blocked with motorbikes outside the government bank, my mother-in-law is prepared to spend all day there.

[HiSoLowSoNoSo]

Even if the sun was falling down they would say Thailand 'unlikely to be hit.

[Khun Paul]

Ok little effect coming from this Govt when it states Tourism is up , when it is in decline, Education improving when it is not, financial targets kept when they are not, iplanes wil continue to fly when some companies are losing their licences, TYhai fishing boats complying when some are going elsewhere. Actually the onkly fact that is certain is that nothing is actually doing very well at all, the more they dig the more they find things wrong/ illegal/ un-licensed, every day something thought to be good is ion fact not good at all . Truth is hard to swallow but Thailand has to tell the truth before it can re-emerge positively.  

[baboon]

1 hour ago, NongKhaiKid said:

Oh yes but this and things like Brexit are kept up the sleeve to be magically produced when any excuse is needed.

Problems about the economy etc have to be sourced overseas.

It also helps when you can say anything you want because you are accountable to no - one and can block your sheeple from viewing alternative viewpoints.

[Eric Loh]

28 minutes ago, YeahSiam said:

This time last year, the Fed said it was going to raise interest 3 or 4 times in 2016. They ended up hiking just once

On Wednesday, they said they're going to raise interest rates 3 or 4 times in 2017. It's not going to happen.

 

 When inflation does indeed kick in, they will allow it to run hot for fear of derailing economic growth.

The current euphoria can't last.

This isn't the 1980s and Trump is not Reagan.

This time next year, the dollar will be in the toilet.

 

 

This is what Marc Faber of the fame Gloom, Boom and Doom publication said this morning. USD will reverse its current strength when reality sets in next year. The US economy is so sub-par and scared and will take a herculean task by Trump to re-tool the fiscal and monetary policies. Next year rate hikes are not set in concrete according to Yellen and dependent on economic reality. The reality is that the uncertainty that Trump brings to the table with his protectionism rhetoric.   

[YeahSiam]

15 minutes ago, Eric Loh said:

 

This is what Marc Faber of the fame Gloom, Boom and Doom publication said this morning. USD will reverse its current strength when reality sets in next year. The US economy is so sub-par and scared and will take a herculean task by Trump to re-tool the fiscal and monetary policies. Next year rate hikes are not set in concrete according to Yellen and dependent on economic reality. The reality is that the uncertainty that Trump brings to the table with his protectionism rhetoric.   

 

I think Faber's lost a lot of credibility over the years.

He's been calling for a crash in the US bubble forever and a day - Peter Schiff too - but even a stopped clock is right twice a day and when it does happen, it'll be absolutely seismic.

It will change the world

[spidermike007]

Tourism is up. The quality of tourists is up. Foreign investment is up. Consumer confidence is up. The malls are absolutely packed. Every resort in Thailand is sold out for the upcoming holiday season. The western tourists are starting to return. The baht will remain strong. Nothing will effect our nation.We are above natural and financial laws and rules. We cannot be touched. We have a supreme leader, with the kind of skills never seen before. 

 

Yeah right.

[NCC1701A]

Breaking News:

Asteroid to destroy the Earth on Wednesday.

Bank of Thailand says Baht unaffected.

 

[Beats56]

2 hours ago, Prbkk said:

 

Indeed: for those of us who can recall the days of 17% mortgages this seems a bit pale to be called a hike.

My Morgage was 19% when I bought 

my first house! Great if you had savings in the bank like my grandfather but bad for youngsters like me starting out.

 

[George Graham]

27 minutes ago, NCC1701A said:

Breaking News:

Asteroid to destroy the Earth on Wednesday.

Bank of Thailand says Baht unaffected.

 

What self-respecting asteroid would bother with Thailand?

[Srikcir]

6 hours ago, webfact said:

the baht will not weaken as much against the US dollar as other regional currencies because Thailand has a current account surplus.

But still the baht will weaken, further stimulating more domestic capital flight out of Thailand. Foreign capital investment largely took flight earlier in 2016. No investment - no growth.

 

 

[4MyEgo]

4 hours ago, Prbkk said:

 

Indeed: for those of us who can recall the days of 17% mortgages this seems a bit pale to be called a hike.

 

1989 holding 4 properties on a variable rate which skyrocketed to 18.25% with St George Bank, yes the dragon did have a go, but driving cabs on the weekend as a 2nd job meant I held on, but if one of my tenants decided to leave, it could have been all over, suffice to say I made sure all leases were resigned for a further 12 months guaranteeing them of no increases in rent each time they renewed.

[ScotBkk]

Oh yes but this and things like Brexit are kept up the sleeve to be magically produced when any excuse is needed.
Problems about the economy etc have to be sourced overseas.

I agree
The militia coup takeover will sooner or later see the reversal of good fortune is at large & nigh and cannot possibly hide behind farcical financial propaganda me personally believing 2017 will see changes in the Thai baht and could be in for a quite a dramatic decline.

When the Thais achieved what can only be perceived as less independence, they invariably inherited either the extractive institutions that coerced the masses to produce new found wealth for their dictatorships the elite, or else institutions by which the former government shared power and gave people incentives to pursue these extractive retarded institutions as economic developments.


Sent from my iPhone using Tapatalk

[soalbundy]

4 hours ago, Eric Loh said:

 

This is what Marc Faber of the fame Gloom, Boom and Doom publication said this morning. USD will reverse its current strength when reality sets in next year. The US economy is so sub-par and scared and will take a herculean task by Trump to re-tool the fiscal and monetary policies. Next year rate hikes are not set in concrete according to Yellen and dependent on economic reality. The reality is that the uncertainty that Trump brings to the table with his protectionism rhetoric.   

I read a report, Telegraph i think, that said Trump is doing a boom and bust for America, the bust is due in 2019

[soalbundy]

4 hours ago, YeahSiam said:

 

I think Faber's lost a lot of credibility over the years.

He's been calling for a crash in the US bubble forever and a day - Peter Schiff too - but even a stopped clock is right twice a day and when it does happen, it'll be absolutely seismic.

It will change the world

Without 'funny money' he would have been right years ago, now Japan and the ECB are finding out that central banks cant control anything much anymore. People want an end to austerity but what does that mean, more and more debt until implosion then austerity will be forced on them, keep kicking the can,the debts are enormous. 

[soalbundy]

2 hours ago, Srikcir said:

But still the baht will weaken, further stimulating more domestic capital flight out of Thailand. Foreign capital investment largely took flight earlier in 2016. No investment - no growth.

 

 

Little investment but still around 3% growth is expected (also expected by economists in Bloomberg ) Thailand has proved to be remarkably resilient and despite a poor export performance they appear more stable than their neighbours, they must have some good people in the finance ministry. 

[YeahSiam]

1 hour ago, soalbundy said:

Without 'funny money' he would have been right years ago, now Japan and the ECB are finding out that central banks cant control anything much anymore. People want an end to austerity but what does that mean, more and more debt until implosion then austerity will be forced on them, keep kicking the can,the debts are enormous. 

 

I agree that without QE, he'd have been right years ago but the fact is he continued to make calls for Armageddon even though the Fed were busily buying $85 billion a month in treasuries and mortgage-backed securities.

He never adjusted his viewpoint.

[Srikcir]

1 hour ago, soalbundy said:

they appear more stable than their neighbours

Thailand - 2.8% GDP growth in 2015; projected 3% growth in 2016 at the cost of hundreds of billions baht that will not be repeated in 2017. Meanwhile the average growth in the East Asia and Pacific Region forecasted by The Wolrd Bank is 6.3%; the Asian Development Outlook for 2016 in Asian region is about 5.7%. All ASEAN countries are outperforming Thailand.

 

Thailand's economy is about as stable as a corpse.

[GOLDBUGGY]

6 hours ago, Beats56 said:

My Morgage was 19% when I bought 

my first house! Great if you had savings in the bank like my grandfather but bad for youngsters like me starting out.

 

I remember those days to. When I used to get a 14% raise every years as well. I think I liked it better back then. But not if I was Retired.  

[soalbundy]

14 hours ago, YeahSiam said:

 

I agree that without QE, he'd have been right years ago but the fact is he continued to make calls for Armageddon even though the Fed were busily buying $85 billion a month in treasuries and mortgage-backed securities.

He never adjusted his viewpoint.

He didn't need to adjust, all QE did was kick the can further down the road. He see's that there is basically a fault in the system world wide and it is being ignored. The great depression which started with the collapse of the stock market in 1929 came about when people lost trust in a system without substance. We too have no substance, like a man indebted over his head with a mortgage and payments on a new car looking round to borrow more money for a journey around the world, sooner or later the banks will lose trust in him and want their money back, unfortunately he cant pay.

[Grubster]

On 12/16/2016 at 8:56 AM, humqdpf said:

Fed rate "HIKE"! A hike would be if they moved it to 5% or something like that. .25% increase (from .5 to .75%) is hardly a hike in anyone's language

It will probably raise mortgage rates over 1% though and that is substantial.

[Grubster]

On 12/16/2016 at 1:08 PM, Srikcir said:

But still the baht will weaken, further stimulating more domestic capital flight out of Thailand. Foreign capital investment largely took flight earlier in 2016. No investment - no growth.

 

 

Why would domestic capital fly out when it can buy less abroad when it weakens. I could see some foreign investment coming in on a baht fall, and surely exports would gain from a fall in the baht.