Thailand fights against its own currency's success

[StayinThailand2much]

44 minutes ago, Number 6 said:

A nation surely doesn't want to tank it's currency. Must be half dozen tools left in the kit. I don't think lowering interest rates is sound. Expand money supply, spend foreign reserves on infrastructure (...)

 

Not much leeway left lowering interest rates. That 1. odd percent would, probably, not make the baht any weaker. IMHO, they would need to expand the money supply ECB-style, investing aggressively into healthcare, pension systems, education, and infrastructure. Fat chance that this will happen in the foreseeable future...

[IsaanAussie]

Just now, StayinThailand2much said:

Thailand is just lucky. - Does the BOT currently sit on vast foreign currency reserves? Hell, yeah! But what, if for some reason, a high percentage of the depositors or Thailand bond holders suddenly wanted their money back? The reason might be a world recession, or just a liquidity crunch in China... 

Lucky? No bitter experience from the 97 Asian Financial Crisis. As I understand it Thailand has foreign reserves to cover over a years imports, maybe two. People who suddenly want their money back will be issued a ticket and can wait until the number is assigned to a teller, same as everywhere else. 

As for a liquidity crunch in China pulling down the world? Oh come on waste some more money on Fox News subscriptions. 1.3 Trillion in USD bonds behind them and they have an external problem? Forgot how many thousand tonnes of gold they have, but it might help... who knows

 

[StayinThailand2much]

12 minutes ago, IsaanAussie said:

As for a liquidity crunch in China pulling down the world? Oh come on waste some more money on Fox News subscriptions. 1.3 Trillion in USD bonds behind them and they have an external problem? Forgot how many thousand tonnes of gold they have, but it might help... who knows

 

You're right in regards to China's external liquidity. However, internally, cities' and provinces' situation is a different story...

 

Hot money from mainland China is not always accounted for. In the past it found it's way to Macau, Hong Kong, Australia, and NZ. Nowadays Thailand is the choice destination, for whatever reason. So, what, if Beijing wanted the money to be repatriated quickly?

 

[IsaanAussie]

Just now, StayinThailand2much said:

expand the money supply ECB-style, investing aggressively into healthcare, pension systems, education, and infrastructure.

ECB or Fed Reserve style absolutely not, never happen in Thailand, diversely opposed to the culture of these people. This country is all about helping the people, the rest is already happening or has happened.  

[StayinThailand2much]

16 minutes ago, IsaanAussie said:

This country is all about helping the people, the rest is already happening or has happened.  

ROTFLOL... ????????

[White Christmas13]

4 hours ago, StayinThailand2much said:

On one side, 50 families at the top of Thai society, who want to buy up property overseas cheaply with the help of an overvalued currency.

 

On the other, 69 million farmers, factory workers, hotel staff, exporters, and others, who want to make a living.

 

Guess, who will be taken seriously by government and BOT...

you really need an answer to that?

[the guest]

Yet another couple (friends of mine) not returning back to Thailand after years religiously coming for their winter break, spending their hard earned currency.

 

Does Thailand really think that manipulating the currency will benefit the country in the long term?

 

Tourism - down

Exports - down

Foreign Investment - down

 

For a country that gives foreigners a really hard time, ironically it depends on us to support their economy.

 

[racket]

11 hours ago, trainman34014 said:

If they were serious they would devalue the Baht by around 20% in the same way Malaysia did two or three years ago.  Truth is they are not interested and just give Lip Service to the matter !

They can't devalue because the thai baht is a floating currency. 

[kevin612]

That’s what I am talking about. The other day there was a guy talking something already happened after interest rate cut. He is bul l<deleted>ing.

[shy coconut]

11 hours ago, jlwilliamsjr18 said:

Come on folks...we've been here before.  When it gets to the point tourist turn elsewhere (i.e Philippines) and the elite 500 have stashed enough dollars, you'll see a change.  You will not see a consumer advantage. Inflation will fly like an eagle.  Brace yourselves, this ain't no joke.  Recession is just around the corner. 

Are the Philippines really a top tourist destination?

 

I know some expats have been flirting with the idea of relocating as the visa

requirements are more affordable, but for the average tourist, what do the Philippines

offer?

 

I have met a lot of Filipinos in London whilst working for the NHS and they are

lovely people, but I have never seen it as a place I would love to visit.

[Thomas Hannah]

15 hours ago, RotBenz8888 said:

Sure, but the condo bubble hasn't bust yet.

Yes it has.Burst over 2 years ago.

[Henryford]

Many posters talk about the strong baht and imply it is the Thai Government that has created this position (for the rich Thais to buy properties overseas!!). Is that really the case? I have always believed it is it not the baht that is strong but other currencies that are weak. Europe and the USA have spend the last 10 years printing trillions of funny money and running massive fiscal deficits. Thailand by comparison has a very "sensible" financial strategy with low debt levels and a relatively strong export/manufacturing base. It is not surprising that the Baht has improved in that environment. So the answer to this problem lies not with the Thai Government but with the West, who unfortunately show no sign of reversing their reliance of more debt.

[5633572526]

18 hours ago, CNXexpat said:

Not so easy as you think. They can´t say: "Today the value of our currency is 20% less". The US would like to do it also, but they can´t. If one country starts with it, a currency war will come soon, because other countries will do the same.

Very easy to do. China did it a couple years back and with trump recently removing their preferential trading status they have the perfect excuse.

thailands economy is much too small to spark a currency war.

[Caine]

22 hours ago, RotBenz8888 said:

Sure, but the condo bubble hasn't bust yet.

Have you looked around Pattaya lately they can’t give them away. Even recently built ones are falling into disrepair.

[Angry Dragon]

2 hours ago, Henryford said:

Many posters talk about the strong baht and imply it is the Thai Government that has created this position (for the rich Thais to buy properties overseas!!). Is that really the case? I have always believed it is it not the baht that is strong but other currencies that are weak. Europe and the USA have spend the last 10 years printing trillions of funny money and running massive fiscal deficits. Thailand by comparison has a very "sensible" financial strategy with low debt levels and a relatively strong export/manufacturing base. It is not surprising that the Baht has improved in that environment. So the answer to this problem lies not with the Thai Government but with the West, who unfortunately show no sign of reversing their reliance of more debt.

well put, but this doesn't sit well with the TV narrative that sees the THB as grossly overvalued.  It needs to be talked down so that those who rely on foreign currency income get more THB in the exchange.  

[Caine]

20 hours ago, miamiman123 said:

Cognitive dissonance ....I can’t and won’t sell that 13 year Mitsubishi Pajero for 400,000 baht. It’s like new and I bought it for 1.3 million just 13 years ago. 
ddduh? 

Driven better motors down to the scrap yards in the U.K. you’re dead right they’re having a laugh ????????????????

[IsaanAussie]

For us aussies fast falling FX against the USD and the Baht increasing since yesterday's start of trade, means we are down 0.5baht that's about 2.5%. Most of that in the first 4 hours of today. 

 

[CNXexpat]

2 hours ago, 5633572526 said:

Very easy to do. China did it a couple years back and with trump recently removing their preferential trading status they have the perfect excuse.

thailands economy is much too small to spark a currency war.

A currency war in SEA. Vietnam and other countries are rivals in the tourist industry and also in exports, by example of rice. What Do you think will they Do if they see that Thailand has success? Also a increasing currency happens for some economic reason.

[mikebell]

23 hours ago, RotBenz8888 said:

Sure, but the condo bubble hasn't bust yet.

Have you tried to sell one yet?  For sale signs all over Pattaya.

[todlad]

On 11/13/2019 at 7:09 PM, IsaanAussie said:

Dont be surprised it has nothing to do with "normal" analysis. Here it has always been more cultural than economic. It is changing as the younger generations become more financially literate. 

The best I can offer in explanation is, I own something, it has value that I paid for it, if I drop the price I devalue myself. Sorry but hope that helps.

Common thread, no loss if not sold.

I came to a similar conclusion: my reasoning is that in Thailand, a car is likely to be the largest value asset anyone owns and, as you say, they are not willing to throw away any of the value of their biggest asset to anyone.

Why is the depreciation of vehicles different in other places? Where I come from, the largest value asset I am likely to own is a house and the thought that we might lose capital value on a house is too much to think about.

[jvs]

36 minutes ago, todlad said:

I came to a similar conclusion: my reasoning is that in Thailand, a car is likely to be the largest value asset anyone owns and, as you say, they are not willing to throw away any of the value of their biggest asset to anyone.

Why is the depreciation of vehicles different in other places? Where I come from, the largest value asset I am likely to own is a house and the thought that we might lose capital value on a house is too much to think about.

36 minutes ago, todlad said:

 

I sold a Toyota Tiger for nearly half the new price,it was 14 years old but looked like new.

Absolutely no rust anywhere so that is one reason they tend to keep their value.

Another reason is the low cost when you need it fixed,labour is often not even charged.

You pay for the part installed.

[mruniverse]

On 11/14/2019 at 8:13 AM, Henryford said:

Many posters talk about the strong baht and imply it is the Thai Government that has created this position (for the rich Thais to buy properties overseas!!). Is that really the case? I have always believed it is it not the baht that is strong but other currencies that are weak. Europe and the USA have spend the last 10 years printing trillions of funny money and running massive fiscal deficits. Thailand by comparison has a very "sensible" financial strategy with low debt levels and a relatively strong export/manufacturing base. It is not surprising that the Baht has improved in that environment. So the answer to this problem lies not with the Thai Government but with the West, who unfortunately show no sign of reversing their reliance of more debt.

 

On 11/14/2019 at 10:26 AM, Angry Dragon said:

well put, but this doesn't sit well with the TV narrative that sees the THB as grossly overvalued.  It needs to be talked down so that those who rely on foreign currency income get more THB in the exchange.  

Yep exactly right.  Most TV posters are living on bringing funds in from currencies that are being devalued by their home central banks and their preference would for the Thai currency to drop faster so they can buy beer cheaper.  I get paid in Thai baht and am more than happy with a historically high Thai baht.