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Thailand says strong baht, financial stability remain a concern

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Thailand says strong baht, financial stability remain a concern

By Kitiphong Thaichareon

 

2019-08-13T110059Z_1_LYNXNPEF7C0S9_RTROPTP_4_BUSINESS-CURRENCY.JPG

FILE PHOTO: A Thailand Baht note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

 

BANGKOK (Reuters) - The strong baht remains a problem for Thailand's industries and exports, a key driver of the country's growth, and more will be done to help exporters, the industry minister said on Tuesday.

 

The ministry will support exporters in currency hedging and will discuss measures to promote investment and imports of machines, Industry Minister Suriya Juangroongruangkit told reporters after meeting with the central bank governor.

 

The baht's strength has been driven by Thailand's high current account surplus of $17 billion this year and the central bank has already acted on the currency's appreciation, he said.

 

"I just knew that today. Previously, I just heard that the baht was strong because of our high interest rate and foreign investors parking money in our country," Suriya said, referring to the current account surplus.

 

"The central bank said it has already acted on the baht's strength, but it needs to be careful in doing so, or Thailand will be seen as a currency manipulator for trade advantage."

 

The baht <THB=TH> is Asia's best performing currency, up around 5.5% against the dollar so far this year.

 

Earlier on Tuesday, Bank of Thailand Governor Veerathai Santiprabhob said the central bank was still concerned about financial stability after last week's interest rate cut.

 

He added that a new joint policy committee would have no impact on the central bank's monetary decisions.

 

"We still give importance to financial stability and will need to adopt measures to take care of it, particularly at a time of lower interest rates," Veerathai said without giving further details.

 

Last week, the Bank of Thailand's monetary policy committee unexpectedly voted 5-2 to cut the key interest rate <THCBIR=ECI> by a quarter point to 1.50%. Two dissenters favoured no policy change.

 

Veerathai said the rate cut was due to the increasing impact of escalating trade protectionism on Thailand's trade-driven economy and on lower fuel prices that could pull inflation below target this year.

 

He also said the establishment of the committee to discuss fiscal and monetary policy will have no impact on the central bank's decision-making as it will only serve as an advisory council.

 

Finance Minister Uttama Savanayana said on Friday there will be no interference in the central bank's policy.

 

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-- © Copyright Reuters 2019-08-13
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So they sit on their hands with no clues what to do, OMG.

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Jeez after 2 days the Thai baht and financial stability is still a concern how long will it drag on for?Another day?2 more days?Surely the world will have ended before then.

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13 hours ago, DrTuner said:

Fun fact: Thailand still hasn't implemented OECD's CRS.

Long may it stay that way........

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13 hours ago, DrTuner said:

He should have read TVF. Everybody and their long lost Thai cousin here have said Chinese are piling in the cash to Thailand to put it through the rinse cycle. There's your reason for the accounts bursting at seams.

A lot of truth in what you say.. but why can't they see it?

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I think the Industry Minister Suriya got this right. The strong Baht will remain due to the favourable fundamentals that Thailand enjoyed for now. The BOT responsibility is to keep the Baht stable by soaking up wild gyrations and using fiscal policies. BOT must remain independent and not submit to political pressure and interference. To offset the currency strength, companies will have to be more productive and that's where the government can help by training and grants for automation and mechanization.  

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14 hours ago, snoop1130 said:

The ministry will support exporters in currency hedging and will discuss measures to promote investment and imports of machines

Whatever it takes to protect the SET.

Whatever cash doesn't go offshore or into real estate, right now the stock market is a good place to park it in large corporate stocks; especially those companies benefiting from Chinese capital investments as a means to hedge their yuan.

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So the Chinese stopped washing their money in the USA and are sending it to Thailand? Another fallout from some idiot's tariff war.

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14 hours ago, snoop1130 said:

I just knew that today. Previously, I just heard that the baht was strong because of our high interest rate and foreign investors parking money in our country," Suriya said, referring to the current account surplus.

I just heard? My God! Sounds so naive for a minister! 

Why don’t they spend that surplus on making Thailand have better schools, hospitals and infrastructure? 

I wonder what’s in store for the future? It does not look good. Private Debt gone mad, economy slowing, spending is all on borrowed cash and from my little experience here, Thais have no clue about simple finance management rules. 

 

My gf who has just bought her 3rd property in less that 18 months ( 95% borrowings) says property prices in Thailand never go down. And serious mortgage stress as 2 properties have no income.

Is she worried? Mai pen rai! Lender....Government Housing Bank. 

Wow! 

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10 hours ago, Brickbat said:

My gf who has just bought her 3rd property in less that 18 months ( 95% borrowings) says property prices in Thailand never go down. And serious mortgage stress as 2 properties have no income.

Is she worried? Mai pen rai! Lender....Government Housing Bank. 

Wow! 

Are you fat and old to have a gf with IQ of a rock?

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50 minutes ago, HeyHeyHey said:

Are you fat and old to have a gf with IQ of a rock?

Hey Hey Hey ....Hah hah hah. I agree. Low IQ. But it’s not the only criteria. Being kind, caring and considerate and a willingness to learn also counts. After all, the education and information here creates low IQ folks....for a damn good reason too. 

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On 8/13/2019 at 8:41 PM, ThomasThBKK said:

Good for some on the other hand, we just came back from the maldives and it was full with thai people on holiday.

I was the only non-thai on our boat back to the airport.

Really sorry to hear that

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