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On 1/14/2020 at 8:38 AM, deej said:

How can that be classed as Sad

Smell the coffee😀

The Thai Baht is over valued by minuim of 20% in  some cases 30% (currencys) and that is Fact😀

 

for my and other people's education, could you share the data underpinning those facts with us ?
 

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One significant aspect influencing the exchange rate almost never finds a mention - speculation.

Considering the fact that total currency volume trade exceeds 5 Trillion Dollars per day, it goes without saying that the vast majority of those trades are not based on genuine international trade in goods and services.

It is estimated that at least 80% can be attributed to speculation.

The Baht specific trade volume is averaging 1.6 Billion $ per day or $584B per year, an amount which exceeds the entire GDP of Thailand.

Thailand's low inflation, favorable terms of trade, low public debt and "relative" political stability are partly responsible for the relentless rise of the baht.

The Governor of the Bank of Thailand has undoubtedly a difficult task to reign in the Baht particularly to discourage the speculators on the demand side which are largely responsible for driving the value over and above what could be attributed to favorable fundamentals. They base their decisions on future developments and like every other investor hate uncertainties.

The Governor's tools at his disposal are admittedly limited and discussed at nauseum in the media.

But IMHO he is at the very least naive and incompetent in one area - dealing with the public in press comferences and releasing statements. With statements like - quote "We cannot reduce the key interest rates any further because they are already at a historic low" and continuous talk for months on end of fearing to be placed on list of currency manipulators  as well as "that he is ready to implement further measures" without acting in any meaningful way (cry wolf syndrom?) he plays straight into the hands of speculators who are gleaming at the prospect of nothing happening and gives them additional certainty in their decision making process.

A poker player who signals to his opponents what card he holds, will never be successful at the game.

This Governor reminds me of such a player.

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1 hour ago, traveller101 said:

One significant aspect influencing the exchange rate almost never finds a mention - speculation.

Considering the fact that total currency volume trade exceeds 5 Trillion Dollars per day, it goes without saying that the vast majority of those trades are not based on genuine international trade in goods and services.

It is estimated that at least 80% can be attributed to speculation.

The Baht specific trade volume is averaging 1.6 Billion $ per day or $584B per year, an amount which exceeds the entire GDP of Thailand.

Thailand's low inflation, favorable terms of trade, low public debt and "relative" political stability are partly responsible for the relentless rise of the baht.

The Governor of the Bank of Thailand has undoubtedly a difficult task to reign in the Baht particularly to discourage the speculators on the demand side which are largely responsible for driving the value over and above what could be attributed to favorable fundamentals. They base their decisions on future developments and like every other investor hate uncertainties.

The Governor's tools at his disposal are admittedly limited and discussed at nauseum in the media.

But IMHO he is at the very least naive and incompetent in one area - dealing with the public in press comferences and releasing statements. With statements like - quote "We cannot reduce the key interest rates any further because they are already at a historic low" and continuous talk for months on end of fearing to be placed on list of currency manipulators  as well as "that he is ready to implement further measures" without acting in any meaningful way (cry wolf syndrom?) he plays straight into the hands of speculators who are gleaming at the prospect of nothing happening and gives them additional certainty in their decision making process.

A poker player who signals to his opponents what card he holds, will never be successful at the game.

This Governor reminds me of such a player.

Baht speculation is not an issue because it is a restricted currency, it is not fully convertible and may not be exported, overseas banks can only hold limited amounts. Because of those things speculators cannot take a position against THB, people can deal on an account basis but not for delivery of the currency.

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