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State of economy worse than initially estimated: BOT

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 Highly doubtful there are foreign investors now pouring money into

Thailand with this Economy. Tourists will also look elsewhere to

spend their precious money since the inflated Thai baht is a No Welcome

sign. With COVID 19 causing massive unemployment, most travelers will likely

stay close to home this next year. Making Thailand attractive again seems to be

the last thing on the Government's mind.

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2 minutes ago, mberbae said:

 Highly doubtful there are foreign investors now pouring money into

Thailand with this Economy. Tourists will also look elsewhere to

spend their precious money since the inflated Thai baht is a No Welcome

sign. With COVID 19 causing massive unemployment, most travelers will likely

stay close to home this next year. Making Thailand attractive again seems to be

the last thing on the Government's mind.

Foreign Direct Investment in Thailand increased by 73682.49 THB Million in March of 2020."

https://tradingeconomics.com/thailand/foreign-direct-investment

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3 hours ago, Trillian said:

0.5% is the base rate set by the MPC at BOT. Individual banks use that as the base to determine the rates of interest they will pay customers on savings and how much they will charge to lend for loans, including mortgages. As the base rate moves so do most of the other rates for new loans, not for existing ones, unless a variable rate loan is in effect. 

As I understand all mortgages are based on BOT MRR rate? Have MRR moved at all? Should not  the base rate reflect on consumers or do banks just use the lower MPC rates to increase their margins?
Comparing to Europe mortgages here are very expensive.

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5 minutes ago, hugolars said:

As I understand all mortgages are based on BOT MRR rate? Have MRR moved at all? Should not  the base rate reflect on consumers or do banks just use the lower MPC rates to increase their margins?
Comparing to Europe mortgages here are very expensive.

I really don't know much about mortgage lending rates in Thailand. I know that MLR and MRR are floating rates for top tier customers, those with good credit and wanting large loans, everyone else gets MLR +

 

Perhaps others can comment more knowledgably.

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THB to USD= 40

Tourists would flock here.

But, it ain´t gonna happen.

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Posted (edited)

Hmmm...wonder why??? 🙄

Edited by Skeptic7

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12 minutes ago, Skeptic7 said:

Hmmm...wonder why??? 🙄

Because they don't need to do that, they know they can still get tourists at 30 to the USD, they even got record numbers of them at that rate. 

 

Let's say for example they dropped the rate to 40 per USD, that means they would easily earn that 12% of their GDP that is tourism. But the next 48% of GDP that is the rest of exports would suffer a 25% loss, they would be selling their exports at a 25% discount. 

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Posted (edited)
On 6/3/2020 at 4:45 PM, Trillian said:

Inflation is falling, not soaring, it's a major issue for the bank, April CPI was -3%:

https://think.ing.com/articles/thailand-steepest-price-fall-since-financial-crisis-reflects-huge-demand-drop/

 

The ever weakening USD is a concern when it comes to Baht strength, people have been dumping the Dollar which is causing it to weaken. The main reasons for that fall are the riots, and the high level of borrowings, as a result THB looks like a very sound and stable currency since government debt is below 42% of GDP. 

 

 

It's deflation - slack economy. There's a difference.

 

USD is not being dumped and certainly not because of the riots. That's just nonsense. BOT could hold gold or Euro (oops that's about to implode) or RMB or whatever. It need not be only dollars.

 

Edited by Number 6
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Posted (edited)
6 minutes ago, Number 6 said:

It's deflation - slack economy. There's a difference.

 

USD is not being dumped and certainly not because of the riots. That's just nonsense. 

Regardless of the cause, inflation has fallen.

 

Not dumped, post 16 argues it was/is being sold and statistically it was/is. If you think the Bloomberg opinion piece is nonsence that's your perogative, personally I think it's probably quite accurate.

Edited by Trillian

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7 minutes ago, Trillian said:

Because they don't need to do that, they know they can still get tourists at 30 to the USD, they even got record numbers of them at that rate. 

 

Let's say for example they dropped the rate to 40 per USD, that means they would easily earn that 12% of their GDP that is tourism. But the next 48% of GDP that is the rest of exports would suffer a 25% loss, they would be selling their exports at a 25% discount. 

Thailand is basically a third world country with first world aspirations and prices,they,'ve taken western tourists for granted over the last twenty years and in view of the forthcoming depression and tats attitude are going to get a rude awakening.

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Posted (edited)
12 minutes ago, Trillian said:

Let's say for example they dropped the rate to 40 per USD,

The currency floats on the open market. You cant just depreciate your currency lol. That's total manipulation.

 

Why would Thais want to lose 20% of their purchasing power?!

 

Edited by Number 6

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Posted (edited)
4 minutes ago, Number 6 said:

The currency floats on the open market. You cant just depreciate your currency lol. That's total manipulation.

 

Why would Thais want to lose 20% of their purchasing power?!

 

The Baht floats on a managed float basis, it is not free floating.

 

I gave a hypothetical case in order to make the point, (as evidenced by the wordds "for example") as to why the Thailand would not devalue their currency, I did not suggest they would or could do so.

Edited by Trillian

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41 minutes ago, bkk6060 said:

THB to USD= 40

Tourists would flock here.

But, it ain´t gonna happen.

What with an economy based on tourists (who won,t be coming) and exports no one will be able to afford,it just might happen.

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Depreciating the currency is simple. Just print money and give it all the banks and corporations to prop up their businesses. Bunch of wreckless parliamentary spending bills. Easy.

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4 minutes ago, Number 6 said:

Depreciating the currency is simple. Just print money and give it all the banks and corporations to prop up their businesses. Bunch of wreckless parliamentary spending bills. Easy.

You do understand that THB is not freely convertible and is not exportable? You should also understand that there is very little in Thailand by way of foreign competition, almost all business is home grown. And the term printing money means extending the credit lines on banks balance sheets, it doesn't actually mean printing notes or paper money. As a consequence of those things there's nothing in your simple solution that would actually result in a depreciated currency, only in greater lending by banks to the general population.

 

 

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