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Thai central bank chief - Baht strength from current account surplus, not rate hike


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Thai central bank chief - Baht strength from current account surplus, not rate hike

 

2019-02-14T065051Z_1_LYNXNPEF1D0DK_RTROPTP_4_THAILAND-ECONOMY-CENBANK.JPG

FILE PHOTO: Thailand’s Central Bank Governor Veerathai Santiprabhob is seen during an interview with Reuters at the Bank of Thailand headquarters in Bangkok, Thailand March 14, 2018. REUTERS/Jorge Silva/File Photo

 

BANGKOK (Reuters) - Appreciation of the Thai baht is due to a weaker dollar and current account surplus, Bank of Thailand governor said on Thursday.

 

This year, the baht has strengthened about 3.9 percent against the dollar.

 

Factors strengthening baht include "a high current account surplus, due to trade and tourism revenue recovering," Governor Veerathai Santiprabhob told reporters, adding that the gain was not rooted in December's interest rate hike.

 

In 2018, there was a $37 billion current account surplus, he said.

 

This year, there was $400 million outflow in bonds and an inflow of $100 million into capital markets, resulting in a net outflow of $300 million, he said.

 

"We are concerned about the baht moving too fast. We're ready to take care of irregular movement," Veerathai said, adding that Thailand would be careful to avoid any accusation of manipulating the baht.

 

(Reporting by Kitiphong Thaichareon; Writing by Chayut Setboonsarng; Editing by Richard Borsuk)

 

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-- © Copyright Reuters 2019-02-14
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1 hour ago, webfact said:

"We are concerned about the baht moving too fast. We're ready to take care of irregular movement," Veerathai said, adding that Thailand would be careful to avoid any accusation of manipulating the baht. 

People from around the world have been talking about this happening for years now so a little late to avoid the accusations .

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what goes up must come down, problem with Thailand is greed and corruption drive everything - when the baht comes down it will come crashing down, first sign will be a sudden increase in inflation - and can get out of control very quickly 

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9 minutes ago, ukrules said:

There is probably only one thing that can destroy Thailands tourism industry permanently and that's the Baht being too strong.

 

That and a widespread civil war.

 

 

1 minute ago, smedly said:

what goes up must come down, problem with Thailand is greed and corruption drive everything - when the baht comes down it will come crashing down, first sign will be a sudden increase in inflation - and can get out of control very quickly 

Geese, and golden eggs...

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I thought tourism was just a teeny weeny source of foreign currency and Thailand, the supreme 1st world powerhouse, got it's $ from hi-tech exports and IP rights. I guess the cash flowing through the bar cashier is piling up.

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10 minutes ago, DrTuner said:

I thought tourism was just a teeny weeny source of foreign currency and Thailand, the supreme 1st world powerhouse, got it's $ from hi-tech exports and IP rights. I guess the cash flowing through the bar cashier is piling up.

Manufacturing is the most important sector and accounts for 34 percent of GDP. Services constitute around 44 percent of GDP. Within services, the most important are wholesale and retail trade (13 percent of GDP); transport, storage and communication (7 percent of GDP); hotels and restaurants (5 percent of GDP) and public administration, defense and social security (4.5 percent of GDP). Agriculture also makes a significant contribution - around 13 percent of GDP.

 

https://tradingeconomics.com/thailand/gdp-growth-annual

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1 hour ago, smedly said:

what goes up must come down, problem with Thailand is greed and corruption drive everything - when the baht comes down it will come crashing down, first sign will be a sudden increase in inflation - and can get out of control very quickly 

The worlds economy and population and production has been going up for 2000 years.  When do you think it will come down? 

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1 hour ago, ukrules said:

There is probably only one thing that can destroy Thailands tourism industry permanently and that's the Baht being too strong.

 

That and a widespread civil war.

 

I do agree. For me personally I'm going to leave Thailand after more than 7 years here. I do feel I had a good income to live here in a 3 world country , but with the month income reduced from more than 120000 baht every month to only 96000 over the last years, its not worth it anymore. 

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Thailand is doing great. nothing wrong with the Baht and there will not be repeat of 1997 no matter how much we would like to see more baht for the what ever you got. 

 

and plan your retirement in the coming decades around the baht and SEA growing in economic strength and your home currency except the US dollar just going down in value over time.    

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5 minutes ago, NCC1701A said:

Thailand is doing great. nothing wrong with the Baht and there will not be repeat of 1997 no matter how much we would like to see more baht for the what ever you got. 

 

and plan your retirement in the coming decades around the baht and SEA growing in economic strength and your home currency except the US dollar just going down in value over time.    

Your are right. I've seen analyses of the USD/THB going to 25-28 long term

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For other to read. From last year why many believe the Bath is undervalued.

 

https://www.cfr.org/blog/thailand-really-and-i-mean-really-close-meeting-treasurys-manipulation-criteria

 

Quote

The Thai baht did appreciate in 2017, and appreciated by a bit more in early 2018. This shouldn't be surprising. Most countries that intervene do so to limit the pace of appreciation, not to drive the currency down—e.g. they tolerate market pressure to depreciate, but not market pressure to appreciate. In the first part of 2017, Thailand's central bank looks to have intervened to keep the baht from appreciating through 34 before shifting to defending 33 (against the dollar). With the dollar's broad weakness in 2018, they are now possibly defending the 32 mark.

Today they are defending 31 mark

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