Strong baht to deliver Bt66 bn hit

[Tayaout]

15 minutes ago, Benroon said:

Really ? What country is best placed to mop up a significant part of Chinas raw material exports to the US once Trump has introduced his tariffs worth hundreds of billions of dollars ?

 

That would be Thailand

Vietnam is currently doing it and much closer to China. 

[rkidlad]

20 minutes ago, Benroon said:

Really ? What country is best placed to mop up a significant part of Chinas raw material exports to the US once Trump has introduced his tariffs worth hundreds of billions of dollars ?

 

That would be Thailand

Well, until when or even if that happens, what I said still rings true. 

[buick]

2 hours ago, RobboR said:

Thailand does not have a huge current account surplus

 

https://www.ceicdata.com/en/indicator/thailand/current-account-balance

 

It does keep a lot of foreign reserves though so it can control/manipulate it's currency. 

 

Simple video:

 

https://www.khanacademy.org/economics-finance-domain/macroeconomics/forex-trade-topic/macro-the-foreign-exchange-market/v/using-reserves-to-stablize-currency

 

There are people at the BOT who think that the foreign reserves should be put to work re infrastructure but it falls on deaf ears.

 

It much prefers to borrow trillions off book from the Chinese. There are quite a few things off book that keep the situation looking rosier than it actually is

 

 

 

interesting information, thanks for sharing it.  i've always wondered about how the banks in thailand account for their property loans.  one example, that huge, unfinished project in pattaya (the waterfront ?).  has that loan been written down to zero ?  i'm seeing alot of new 40 story condos in the sukhumvit area of bkk.  several thousand units that are vacant.  how are those valued ?  do they use the cost of construction ?  or do they base it on the recent sale prices of units ?  said another way, it seems like the thai banks are sitting on alot of bad loans that might not be categorized as such.  maybe because they've been given a 'guaranty' by the developer (who probably can't cover the guaranty).  if these 'bad' loans were dealt with properly (written off partially or in full, etc...), cash injections to the banks from the govt might be required to keep them afloat, what impact would that have on their current account surplus, cash reserves and the value of the THB.  some in the banking industry call it 'pretend and extend'. 

 

maybe the property loans are only a small component of assets held by the banks and large write offs would not be a big problem compared to the total cash reserves, etc... 

[Ozman52]

3 hours ago, lipflipper said:

Despite warnings from the U.S. Treasury and being placed on a watch list of countries who seem to be manipulating their currencies the Bank of Thailand continues to keep the Baht strong. So what if it hurts most of the Thai people in some fashion?? This huge hit to the Thai exports is not small potatoes and it will have a severe impact in the long run unless something is done. But this being Thailand where the big money people have the final say so the Baht will continue to be kept strong to keep their wealth from dimishing and to hell with anyone else. Let's hope the U.S. Treasury Department keeps their word and declares Thailand a currency manipulator, then and only then will the Bank of Thailand sit up and take notice and put the Baht where it rightfully should be and that's at the 33 to 34 baht to the U.S. dollar.

Sent from my CMR-AL19 using Thailand Forum - Thaivisa mobile app
 

Doh! The US (under Trump) decides that a country is manipulating currency by 3 factors, That it has a balance of trade of 7% in its favour (Yes), that the balance exceeds $20 billion pa (No, it is $19 billion),  and it is seen to be artificially keeping its currency low. Keeping its currency low is exactly the opposite of what is happening here.

 

The first 2 are not really indications of currency manipulation, but a reflection of the fact that the USA perpetually spends more than it earns, which is why there "debt ceiling" is continually raised.

[madmen]

Men in black running around pumping the baht as soon as it hits a down trend so the "elite" can keep stocking up on Rolex watches and louis vuitton handbags ..only on TV ????

[garyk]

7 hours ago, NCC1701A said:

want to get really freaked out?

 

" The Morgan Stanley Business Conditions Index fell by 32 points in June, to a level of 13 from a level of 45 in May. This drop is the largest one-month decline on record."

 

https://www.cnbc.com/2019/06/13/a-morgan-stanley-reading-on-the-economy-collapses-by-the-most-ever.html

 

Curious to see what happens in the future for sure. But, the U.S. stock market is surging and shows no signs of a slow down. I find it quite amazing people following these reports. As a matter of fact analysts are now turning, and saying it may be a good time to invest in stocks.

 

Have you seen the China market? It is the worst in years, why does that not hit the headlines? I personally think it is anti American sentiment in south east Asia, even from Americans?  And the fact that Thailand has gone in hook line and sinker with China. 

 

If Trump wins another 4 years and the trade war with China is not resolved and is escalated, which looks like a real possibility. The trickle down effect will hit Thailand hard.

 

Lets see how the Thai Baht hold up after a recession in China!

[gamini]

13 hours ago, PatOngo said:

A high baht buys more US dollars for the corrupt officials with offshore accounts! Why would they want to lower the baht?

It's sad to see this  continuous ignorant Thai bashing. Have you any proof that any officials have offshore accounts. 

[madmen]

10 minutes ago, gamini said:

It's sad to see this  continuous ignorant Thai bashing. Have you any proof that any officials have offshore accounts. 

He has 100% undeniable proof while sat on a bar stool he met someone that new a friend of a friend of a friend that knew someone that was a high ranking official at BOT who confirmed it was true  ????

[rkidlad]

12 minutes ago, Benroon said:

How ? Yet again if Trump imposes tariffs on China, Thailand will be a major benefactor ! The goods have to come from somewhere.

 

The Thai baht has now reached YEN status and wouldn't be affected by any recession in China (that won't happen)

You seem to be extremely knowledgeable on foreign currencies. Quick question - what is YEN status? 

[metisdead]

A post containing a fake web link has been removed:

 

15) Any links posted must lead to the website the link indicates. Links that are misleading or direct to a site different than the one indicated are not allowed.

[rkidlad]

9 minutes ago, Benroon said:

Yep - launder your money into assets that can only be converted into a weaker currency - makes perfect sense.

 

Could you just take us through the process of how the 'clans' demand, and get, a higher baht please.

Why do laundered assets have to be converted back into local currency? Couldn’t you say, for example, launder money to buy a property and let its value appreciate? I always thought a currency’s value can appreciate or depreciate over time. 

[rkidlad]

2 minutes ago, Benroon said:

The Japanese Yen has for a very long time been seen as a safe haven, as does gold and the swiss franc. The thai baht is approaching that status. When the shit hits the fan, these currencies get bought, the surpluses increase, and the currency gets stronger!

 

I have a few currency dealer mates from when I worked for an arab bank - touch base every now and then, which is why I can also say with a fair degree of certainty - you will be dreaming of 40 baht to the pound already and 30 in about 5 years time !

Okay, but what does Japanese yen have to with the US-China trade war and Thailand’s ability to profit from it? 

[rkidlad]

Just now, Benroon said:

Yes you could - or save yourself all that hassle and bank it in a stronger currency (avoiding a few taxes along the way too) - I certainly wouldn't be trading baht for anything else right now.

 

All the usual suspects bleating never to buy Thai property over the last 10 years are looking pretty stupid right now.

Again, what has anything you’ve been taking about got anything to with Thailand being the victors from the US-China trade war? 

[metisdead]

A post containing inflammatory remarks directed at another member has been removed. 

[garyk]

3 hours ago, Benroon said:

How ? Yet again if Trump imposes tariffs on China, Thailand will be a major benefactor ! The goods have to come from somewhere.

 

The Thai baht has now reached YEN status and wouldn't be affected by any recession in China (that won't happen)

 

Of course it is all speculation at this point.

China is considered a huge cash cow for Thailand. Buying goods and trade. As well as tourism, which Thailand is heavily reliant on. Thailand, 20% GDP dependent on tourism. 

If China falls into a resession, Thailand will be hit very hard. 

 

Not only that but Thailand will loose out to Vietnam and others. For small goods, manufacturing is shifting.

YEN status. hummmm  .. Is that an acronym for "You Eat Noodles"

[LongTang]

19 hours ago, Sonhia said:

 

What does Thailand offer to the rest of the world, apart from the obvious illigal activities which can easily be sought in places such as Pattaya Bangkok plus Phuket.

 

 

And what are these illegal activities that everyone seek might be exactly??

Or are you from the camp of the wealthy people that enjoy destroying the livelihood of less fortunate ones Just so they can feel good about themselves?

 

 

[garyk]

4 hours ago, Benroon said:

Of course they haven't, but what's really tragic is the stupidity of the comments. If you're holding baht, one of the strongest currencies on the planet and only likely to get stronger in the short term why would you offload them to buy far more risky dollars ?

Everyone knows the Baht is one of Asia's strongest currencies. In good Global conditions it will flourish.

It makes no difference, if and when China starts having real problems Thailand will follow.

 

 

[daveAustin]

20 hours ago, NCC1701A said:

because they will never let the events of 1997 happen again. A farang (the evil filth George Soros) collapsed the Bank of Thailand and destroyed their economy.

 

After 1997 the world bank made suggestions to prevent a repeat. and they followed them. huge surplus of cash now. 

 

Ironically the USA and others did not follow their own advice.

 

Thailand is booming.  

Not for the average Somchai. Cash part of it - though many countries have set aside far more - but they'll price themselves out of the all-important tourist market eventually. Thinking it's Vietnam's turn to shine. 

[garyk]

4 hours ago, Benroon said:

Yes you could - or save yourself all that hassle and bank it in a stronger currency (avoiding a few taxes along the way too) - I certainly wouldn't be trading baht for anything else right now.

 

All the usual suspects bleating never to buy Thai property over the last 10 years are looking pretty stupid right now.

If you owned commercial, industrial property it would be a dream come true right now. China is buying commercial property in Thailand trying to relocate their factories.  Same in Vietnam and other countries. Other than that property in Thailand for the average joe is a mine field at best. 

The "usual suspects" as you put it. Are the smart ones by far IMO. You don't come to Thailand to buy property if you do not know what you are doing. Which is 99% of the folks here.

 

[Stygge]

I think the strong bath depends on many reason but two things sticks out as special thai reasons.
The Deposit Interest Rate is at the moment 1.75% which is considerably more than the eurozoon ecb 0.0 % or in counties like Sweden -0.25 %. In Sweden it means you actually have to pay to deposit swedish currency in swedish banks. Sweden and ECB wants a weak currency for export reasons thus keep the interest low. International currency traders then prefer to keep currencies like the thai bath which then increase in value. This is a concious deciscion of the thai central bank. They could weaken the bath if they lowered the interest rate. They choose not to.
Of cours this hurt the export but not as much as one would think. The reason can be found in the thai society.
Thailand is not a democracy. It´s still ruled by a military junta, in spite of the recent election. It´s a shared governance between the military, the royal family and about a dozen very influencial and rich thai-chinese families.
They control almost all major enterprices in Thailand, and also the major export business.
These powers benefit from the strong bath. They trade in imports for personal consumption and exchange large sums of money to deposit in banks abroad. They also buy properties abroad to be able to leave Thailand in a hurry if needed.
The tourist industry is officially around 12 % of the thai economy but in reality a good bit higher. It benefits from a strong thai bath.
But to avoid the tourist sector and the export to hurt to much an important factor needs to stay in place.
Low wages. The official minimum wage is 350 bath/day but in realtiy lower then that and it has not changed for many years. Thailand has one of the greatest inequality rates between the poor workers and the few rich families in the world. Since Thailand is not a democracy the thai people can´t change that. Not all thais go for this minimum wage of course, there is a small and thriving middle class in the bigger citys earning considerably more. But the junta has a large, poorly educated population to do low wage job for export and infrastructure for tourism. So, the junta keep the wages low and education poor to compensate for the strong bath and still have a reasonable good export and cost low enough for tourists to keep comming.


Sent from my SM-N960F using Thailand Forum - Thaivisa mobile app

[Lenny Jones]

22 hours ago, steven100 said:

That's great .... please refrain from reading any further posts.  ???? lol

Simple mathematics:

Stronger baht = exports down + imports up.

Keep that up and the countries financial reserves go down and national dept goes up.

That's how third world countries collapse - leaving a population in poverty and a select few with offshore bank accounts very rich.  It has happened many times before and it is happening here now - - - - -

[spidermike007]

A friend of mine, who seems to be well informed about this, says it is about manufacturing, a relatively strong economy overall, and some BS about low inflation. The trade war with China seems to be helping Thailand, and tourism inflows remain fairly strong. I think Thailand is also benefitting from a weak US dollar due to the Trump manufactured trade war, and inane foreign policy on the part of the US. 

 

Just a few contributing factors, though I think the inflation numbers are pure BS.

 

Global investors purchased a net $256 million of local equities this month through Jan. 30, the largest inflow since September 2016. The current-account surplus widened to $5 billion in December from $1.6 billion in November, beating the estimate of a $3.5 billion excess, according to central bank data. The balance has been in surplus every month since September 2014 and totaled $37.7 billion in 2018. Inflation remains benign at 0.4 percent in December, the slowest gain since 2017. The Finance Ministry expects 4 percent economic growth in 2019, with exports forecast to climb 4.5 percent. Tourists arrivals will hit a record 41.1 million in 2019, the government said the currency is also riding on a wave of optimism for emerging markets, as a more dovish Federal Reserve eases upward pressure on the dollar, while prospects that the U.S.-China trade tension may ease is boosting risk appetite.

 

https://thepattayanews.com/2019/02/01/baht-continues-to-grow-stronger-and-stronger-here-is-why/

 

 

[marcusarelus]

4 hours ago, Lenny Jones said:

Simple mathematics:

Stronger baht = exports down + imports up.

Keep that up and the countries financial reserves go down and national dept goes up.

That's how third world countries collapse - leaving a population in poverty and a select few with offshore bank accounts very rich.  It has happened many times before and it is happening here now - - - - -

1.  Thailand compared to other nations in South East Asia exports?  Auto?  2.  Did this happen to Singapore?  The countries financial reserves?  OK lets look.  You just made your post up and it is a complete error.  

[watcharacters]

On 6/14/2019 at 8:44 AM, rkidlad said:

Oh no, Steven. I shall continue to scrutinise and mock your ideas when they're bad. You're welcome to do the same back to me. It's called being an adult. People should always be free to talk and ask questions. Ideas should always be out in the open ready to be exposed if they're bad. After all, sunlight is the best disinfectant. 

 

Are you sure such a scrutinizing approach is welcomed in Thailand?   ????

 

 

[rkidlad]

18 minutes ago, watcharacters said:

 

Are you sure such a scrutinizing approach is welcomed in Thailand?   ????

 

 

It is when it comes to foreigners here who like to celebrate oppression. 

[marcusarelus]

4 minutes ago, rkidlad said:

It is when it comes to foreigners here who like to celebrate oppression. 

Who has a more oppressive government - Thailand or Singapore?    

[rkidlad]

9 minutes ago, marcusarelus said:

Who has a more oppressive government - Thailand or Singapore?    

Ask someone who’s lived in both countries. I have no idea. 

[marcusarelus]

1 minute ago, rkidlad said:

Ask someone who’s lived in both countries. I have no idea. 

If you are discussing oppression in South East Asia it would behoove you to know something about the political systems in the area. Why not discuss something you know something about like Brexit, Boris or Donald?  

[Eric Loh]

52 minutes ago, marcusarelus said:

Who has a more oppressive government - Thailand or Singapore?    

A naive comparison from someone who probably does not live in either country long enough to know the difference.

[marcusarelus]

2 minutes ago, Eric Loh said:

A naive comparison from someone who probably does not live in either country long enough to know the difference.

I lived in Singapore when everyone still peed in elevators and fought with Thai troops during the Vietnam war.  I moved to South East Asia when I retired 20 years ago.  Given the state of the two countries today I feel much freer in Thailand.  

 

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