Thai central bank chief says 'very worried' about strength of baht

[chilli42]

20 hours ago, racket said:

They are out of ammo to do anything about it, and they don't want to repeat the mistakes of 1997. 

Not so sure they are out of ammo.  They are just not using the ammo they have.  Simplistically, drop the interest rate and things will change fast.  The downside is that Thai’s get further in debt.  Fix that by making the banks elevate minimum requirements to qualify for a loan.

[samran]

30 minutes ago, Thaidream said:

I am not putting myself in the same educational category as the BOT Governor. I don't have an education degree in Economics but I have watched economic trends in Thailand for 50 years.

 

If you believe that the BOT is fiercly independent-  you don't understand Thai psyche and society.  All the Finance Minster Somkid has to do is call  the Governor and indicate (not order) that the PM is interested in following a certain policy and it's done whether the BOT agrees or not. In fact, the  BOT Governors warning is an indication that the Government is following the wrong policy.  

 

The BOT doesn't have to lower interest rates- but they need capital controls which they have successfully used  before.   However, the current Government needs to keep the foreign money flowing inbound to finance it's budget deficit.

 

During the 1997 crash- the BOT intervened massivly trying to hold up the Baht on orders from the then Thai Government  General Chavalit and the markets got wind of the  account balance in the reserves account ; as well as what was happening in the Thai Banking  Industry (Google Finance One and Rakesh Saxena )and the route was on.

 

Thailand's overall budget is in deficit and will remain that way while the Government pursues the wrong economic policies- strong Baht- massive purchases of weapons and equipment from abroad- economic stimulus to the wrong sectors and ignoring the export market.

 

Not all of us are worried about are foreign income flows but about Thailand's future and our children's opportunities.

Well, i am half thai, but not that means anything...you just have to watch and understand the BOT.

 

The BOT is fairly insulated legally. I know you will scoff, but its one of the laws which is taken seriously. The BOT just doesn't have independence from the MOF and the government written into its charter, the governor of the BOT can't be fired once appointed. That buys you a lot of independence from the MOF, Somkid and Prayuth. 

 

The charter is different now than it was in 1997, independence deliberately written in post AFC, to avoid a repeat of government interference which led to 1997. The problems the Thai economy, and the strong baht pose now are not the same as those in 1997.

 

As for capital controls....not sure what you are saying. Outward capital controls are being relaxed as they want funds to exit as easily as possible, and weaken the baht. I'm not sure why you'd want inward capital controls...then exporters wouldn't be able to be paid as easily, a real kick in the guts.

 

As for Thailand's budget deficit, and I stand to be corrected, but it is tiny comparatively speaking and can be financed domestically if they wanted to via bond issuance. As for the strong baht and the purchases of assets offshore? So what, it also means Thailand can import much needed capital equipment cheaply. So its not all doom and gloom, except, it seems, you have come here on a pension.

[Jackin1960]

Great news for some who are cashing in and moving out like me. When I moved to Thailand I got 70 to the GBP now I want to move cash back to GBP while I can get a good return. All I have to do now is sell the property.

[geisha]

The big shock will come after the first quarter of 2020. High season gone down the drain and an even sharper fall in exports through the west winter. Thailand will have to make do with Indian roupies and the Yuan . 

[EricTh]

Well, the interest rate cut didn't do much to weaken the Thai baht except for one week before it strengthened again. LOL

 

It's the speculation money that is the culprit.

 

 

[shoupy]

I predict Baht = 35 = U.S. Dollar within one year.

[overherebc]

5 hours ago, Nong Khai Man said:

Better try 3 Years !!

Yep.

[Mavideol]

1 hour ago, shoupy said:

I predict Baht = 35 = U.S. Dollar within one year.

are you, by any chance, shape or form, related to the fortune teller that said the same thing 2-3 months ago

[Steve Vincent]

No kidding Sherlock April the 1st jokes still be printed in November after the theft of mrs Huay money from Kasikornbank bank I’m predicting they will be underpinning the baht until further notice !

[Isaan sailor]

9 hours ago, Lee4Life said:

      They keep saying that the strengthening of the baht is the result of huge foreign reserves, but they don't explain the source of those reserves. Where did they come from, or where are they coming from?

I’ll venture a guess—from ChiComs.  Every time the Chinese Yuan goes up—the USD goes down—and the Baht also rises.  China gets rid of their USD treasuries as they come due—and pumps them into Bank of Thailand, as hot money inflows.

China toxic to western currencies, but PM Cha-Cha loves them.

[earlinclaifornia]

I spend 14,000 baht less a month now because of the strength.

[Acharn]

On 11/18/2019 at 6:04 PM, CharlieH said:

Took you long enough to realize what we have all been feeling for months !

Don't know what you're on about. He's been saying for months that it's a worrisome development. Haven't you been reading Thai Visa? He's in a tough place, because if he moves to aggressively to reduce the baht the Americans will accuse him of manipulating the currency, which is what he would be doing. Thailand would be subject to very harsh punishment.

[samran]

3 hours ago, Isaan sailor said:

I’ll venture a guess—from ChiComs.  Every time the Chinese Yuan goes up—the USD goes down—and the Baht also rises.  China gets rid of their USD treasuries as they come due—and pumps them into Bank of Thailand, as hot money inflows.

China toxic to western currencies, but PM Cha-Cha loves them.

Or, you could just go to their website....

 

https://www.bot.or.th/English/Statistics/EconomicAndFinancial/Pages/StatInternationalReserves.aspx

[roadrunner32]

Does he worried? Take action then, as central bank chief he have the power to do that. China and other countries have devalued their currencies when it was necessary. Thailand can do the same If there's the will of course. 

[bergan]

3 hours ago, earlinclaifornia said:

I spend 14,000 baht less a month now because of the strength.

As a private person, I would reckon? Now, imagine being an SME, exporting goods and/or services for quite some years. Quite a few of us are at the brink, and a lot will go under if the baht strengthens further. We really would have already, had we not expanded our business volume and improved out business model after taking out (private) loans to keep floating.

 

That's a lot of workers being out of a job, and the more the baht strengthens the more the people will suffer. Then you have the tourism sector to boot. Won't make any predictions, I'm not that versed in the world of economics, but there's no doubt the massive strength of the THB over many years will cause huge problems.

 

I also have reports of local businesses, catering to Thai people, are struggling massively due to a lack of customers, but I can't really verify that or know exactly how bad it is.

 

All in all, I personally can't see how it's at all sustainable or good for the Thai people. But that's just my opinion.

[mindfulness]

YA picture paints a thousand words. 

He looks like he has no idea what to do, incompetence at all levels. 

Did he pay to get the position ? 

 

You do know that court judges in Thailand can become a judge straight from graduating in law. With zero hours of actually experience in prosecuting or defending. Talk about wisdom yeah ! 

[mindfulness]

Talking Thailand business owners. They are totally fed up and very annoyed with this PM and his cronies. One exporter has mentioned their is more corruption at the ports authority as they are losing tea money  so they are pricing up their game of hold containers to ransom before they will allow them to be loaded onboard ships. Prices before 400bt now 2,000bt

 

They also understand this PM has done a great mind job on the sheep mentality who most have welfare money paid to them by having government jobs, and the elitists have his blessing. 

 

They have no idea what they are doing and destroying businesses every day of the week currently. They have little if no understanding on economics.

 

Will there be yet another coup to oust these idiots out ? 

Certainly are putting this place back 25 years ago. 

 

[mindfulness]

are his Sabai, Sabai, Jai Yen Yen levels getting to a breaking point. 

 

Next headlines BOT gov taken in to hospital after found wandering around BKK in his underpants shouting out, Pau Lao Pau Lao !!! 

[samran]

2 hours ago, mindfulness said:

 

He looks like he has no idea what to do, incompetence at all levels. 

 

Clearly you've never seen him in action.

 

He's got a masters and PhD for Harvard with plenty of blue chip experience. 

 

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

 

What are your qualifications?

[uli65]

maybe his qualifications is just to use his common sense and not useless masters

[samran]

10 minutes ago, uli65 said:

maybe his qualifications is just to use his common sense and not useless masters

Okay so he goes with the bar stool experts. He lowers interest rates for already a quite low number. 1.5% down to what should it be???

 

Then he has to deal with a precarious condo sector which is already over leveraged. The lower interest rates will no doubt make that worse.

 

Consumer credit debt levels are already at a record. Lower interest rates will just make that worse.

 

The baht....may or may not move in the direction the pensioners want it to. He doesn’t control world markets and to try and do so is to just ask for a repeat of 1997. 
 

So you’ve lowered interest rates - pump primed an already overheated construction market, exacerbated consumer debt.

 

Oh and maybe, just maybe, lowered the baht. 
 

what is your ‘common sense’ solution?

[dallen52]

<deleted> does he think that the people who try to live here feel?

 

It's a little bit more than worried. 

 

My lady is still waiting for the explanation of why I have 15000 baht less each month. 

 

I tried to say fluctuations. 

She responded with fluck you farang too.

[samran]

7 minutes ago, dallen52 said:

<deleted> does he think that the people who try to live here feel?

 

It's a little bit more than worried. 

 

My lady is still waiting for the explanation of why I have 15000 baht less each month. 

 

I tried to say fluctuations. 

She responded with fluck you farang too.

Minimising pensioners forex exposure isn't one of the roles and responsibilities laid out in the Bank of Thailand Act...

[bkksteve123]

1 hour ago, dallen52 said:

<deleted> does he think that the people who try to live here feel?

 

It's a little bit more than worried. 

 

My lady is still waiting for the explanation of why I have 15000 baht less each month. 

 

I tried to say fluctuations. 

She responded with fluck you farang too.

Sounds like a keeper 

[kiwikeith]

On 11/19/2019 at 12:04 AM, CharlieH said:

Took you long enough to realize what we have all been feeling for months !

meanwhile the big boys buy up usd and stockpile it waiting to cash in!

[hobz]

On 11/19/2019 at 12:22 PM, ExpatOilWorker said:

Have a look at Venezuela and Argentina how well that works. Financial uncertainty and instability will kill any kind of long term growth.

Japan and Sweden has negative and zero interest rates... Seems fine...

[kiwikeith]

49 minutes ago, hobz said:

Japan and Sweden has negative and zero interest rates... Seems fine...

people live in shoe boxes in Japan and that's fine

[huberthammer]

On 11/19/2019 at 4:30 PM, EricTh said:

Well, the interest rate cut didn't do much to weaken the Thai baht except for one week before it strengthened again. LOL

 

It's the speculation money that is the culprit.

 

 

pls tell, why did you come to the conclusion that it is the speculation money?

 

[EricTh]

2 minutes ago, huberthammer said:

pls tell, why did you come to the conclusion that it is the speculation money?

 

I have read many newspaper reports over the years. Money is flowing to safe haven such as Japanese Yen and Thai baht because of trade war between China and USA etc.

 

You can google all those articles yourself.

 

[huberthammer]

20 hours ago, samran said:

What are your qualifications?

He must be an engineer who has knowledge of the switch "Currency up" and Currency down" Common sense ja....

 

Quite shocking how people have great opinions about this and think it is very easy for a country to manage your currency to a specific level. God forbid that somebody finds a way to impact their currency, then you will be in the crosshairs of the Donald for currency manipulation.