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  1. #1
    Thailand Expat misskit's Avatar
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    Thai Baht Extends Itís Gains Crossing Over 32 US Dollar Benchmark

    BANGKOK Ė The Thai baht extended its gains on Friday, trading at below 32 to the US dollar and ending the first two weeks of the year up 2%, while exporters have asked the central bank to take measures to put the baht in line with its trade counterparts to retain a competitive advantage.


    The Thai bahtís strength since early last year could be due to the dollarís retreat and Thailandís current account surplus, while capital flow to portfolio investment is still minimal, said Chantavarn Sucharitakul, assistant governor for corporate strategy and relations at the Bank of Thailand.


    The local currency is moving in line with regional peers and volatility is moderate, Mrs Chantavarn said after a meeting on Friday with the Thai National Shippersí Council (TNSC).
    Foreign investors cashed out of Thai shares at a net 7.24 billion baht year-to-date, according to the Stock Exchange of Thailand (SET). Net foreign inflows into Thai bonds reached 47 billion baht as of Jan 11, the Thai Bond Market Association said.



    Ė
    The baht at one point on Friday rose to 31.91 against the greenback, firming 2.1% year-to-date, before slipping to 31.96 in late trade.
    In 2017, the baht was the second-best gainer in the region after the South Korean won, with the former up 10% and the latter up 11%.
    Exporters and business operators have fretted over the bahtís rapid gain, requesting the meeting with the central bank and setting up a committee tasked with monitoring the currencyís movement.
    The TNSC recently estimated that every one-baht rise against the dollar would cause a loss of 230 billion baht worth of export income, while the spillover effect from the loss would mean 791 billion worth of liquidity disappearing from the economic system.
    Mrs Chantavarn said the central bank has intervened periodically when the bahtís strength was detrimental to the countryís economy to alleviate the effects on business operators.
    She said the current rise could be attributed to the upsurge in foreign reserves last year.
    The central bankís intervention is not aimed at making Thailand gain a trade advantage against other countries or resist market forces, she said, adding that any action would be intended to help the private sector adjust.

    The central bank reported that Thailandís foreign reserves climbed to US$204 billion (6.5 trillion baht) as of Jan 5 from $202.6 billion at the end of last year and $171.9 billion at the end of 2016.
    Amid high uncertainty over the trade policies of major economies and geopolitical tensions, the Bank of Thailand agreed to coordinate to support and promote business operators to hedge against foreign exchange risks or shift to quote prices in terms of baht or other currencies moving in line with the baht instead of the US dollar, she said.
    Almost 80% of operators still stick to quoting their product prices in dollar terms, but the US accounts for less than 20% of Thai trade, she said.
    Moreover, operators who are liable for foreign-currency-denominated debt repayment can protect their businesses against exchange-rate fluctuations by opening a foreign currency deposit account.
    Mrs Chantavarn said the central bank has joined with commercial banks to launch an FX options project to help small and medium-sized enterprises (SMEs) pay a lower fee when hedging against risks.
    Some 2,000 SME operators have received coupons, which can be used to buy options or lock in currency rates to hedge against foreign exchange risks on export value totalling $200 billion since the scheme kicked off late last year.



    The Bank of Thailand and the TNSC have agreed to widen accessibility of the FX options project to the councilís members. Operators have been urged to exploit the stronger baht by importing machinery and equipment to upgrade their productivity, slim down operating costs and add value to their products to beef up competitiveness, she said.


    TNSC chairwoman Ghanyapad Tantipipatpong said after meeting central bank officials that the countryís economic pickup and high current account surplus, resulting from the solid export and tourism sectors, are contributing to the firmer baht.


    She said the council is maintaining its export growth forecast at 5.5% this year, despite the bahtís rally.


    Export volume is expected to to reach $20 billion a month on average.


    Exporters, small operators in particular, should adjust themselves and hedge against foreign currency risks, Mrs Ghanyapad said.


    She said that 2,000 of the 17,000 SME exporters have participated in the FX hedging training programme arranged by the Thai Bankersí Association, but less than 200 have taken out the financial risk management instrument.


    Kobsit Silpachai, head of capital market research department at Kasikornbank (KBank), said the stronger baht is in line with other regional currencies, led by the Chinese yuan, after a report that China could slow or even stop its buying spree in US sovereign bonds.


    ďGiven the new factor of China [in addition to Thailandís strong economic fundamentals], the baht could further appreciate to 31.75 baht against the dollar next week,Ē he said.


    With the baht strengthening at a faster pace than expected, the bank is considering revising its baht-dollar forecast from the 32.30 baht mark expected by year-end.


    Given seasonal factors, the baht is expected to hit this yearís high against the greenback in April.


    The Fiscal Policy Office will review a series of economic indicators this year, including GDP growth, oil prices and the baht-to-dollar rate on Jan 29, said Soraphol Tulayasathien, director of the Macroeconomic Policy Bureau.


    The current baht value is now firmer than the previous forecast of 33.5 to the dollar, but the trend could be reversed late this year when the US Federal Reserve raises its policy rate, he said.


    Despite the bahtís run-up, it is still in line with other regional currencies, Mr Soraphol said, adding that a flood of offshore inflow to Asia is driving up currencies.


    In the meantime, Theeraj Athanavanich, a bond market adviser at the Public Debt Management Office (PDMO), said the Finance Ministry has initiated efforts through every channel to help stem the bahtís rapid gain, but such attempts have become more difficult due to the influx of capital inflows.


    The PDMO will ask foreign entities that recently won approval to issue baht-denominated bonds to speed up the bond issuance, Mr Theeraj said.


    The Finance Ministry allowed foreign state agencies and companies to apply for baht-denominated bond issuance as a special case from Sept 6 to Oct 6, a move expected to help curb the bahtís rapid gain. Foreign entities that received Finance Ministry approval are to issue the baht bonds with a maturity of up to three years between Nov 1, 2017 and March 31, 2018.

    https://www.bangkokpost.com/business/finance

  2. #2
    Thailand Expat david44's Avatar
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    NOT SURE i'LL TAKE FINANCIAL COUNSEL FROM A HEADLINE THAT MISTAKES OVER FOR UNDER

  3. #3
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    The baht isn't really appreciating, it's the dollar which is getting quite a bit weaker.

  4. #4
    Thailand Expat david44's Avatar
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    Appreciated Albert spot on, virtually unchanged versus neighbours and Japan Austrlalia Euro etc, seems the greenback for all that debt QE is losing appeal in the endless debt spiral that always marks the failure of over stretched Empires

  5. #5
    Days Work Done! Norton's Avatar
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    ^Yep. Weak dollar. Doubt fed will do anything to change the weakness. Bastards.

  6. #6
    เกี่ยวข้อง HuangLao's Avatar
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    Quote Originally Posted by Albert Shagnasty2017 View Post
    The baht isn't really appreciating, it's the dollar which is getting quite a bit weaker.
    Yep.
    And certainly not emphasized, or even touched upon greatly, within the content of this article.

    Just have to be observant has to how all currencies worldwide are growing more stable [to their benefit] against the U.S. dollar in the last year-and-a-half or so.

  7. #7
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    Quote Originally Posted by misskit View Post
    Exporters, small operators in particular, should adjust themselves and hedge against foreign currency risks, Mrs Ghanyapad said.
    That's a good advice, only she should elaborate a bit...

  8. #8
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    All the $$ decline has been under Trump. Really making America great again...

  9. #9
    hangin' around cyrille's Avatar
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    A great week for making America grate again, however.

  10. #10
    Thailand Expat
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    ^In fact, a weak currency is good for the country, provided that the country is mainly exporting (like Thailand).
    Not sure whether the USA are also exporting something - beside the arms? (But for the arms business the currency rate is not important, there is no real competition, hence, no decision of the buyers re price).

    Correction: yes, there is an export from USA, filling the empty containers sailing back to Asia: US timber, even loads to Thailand...

  11. #11
    Da Man stroller's Avatar
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    A weaker dollar makes US manufacturing more competitive, me thinks it's all part of the Trump plan, not a failure of policies.

  12. #12
    Thailand Expat
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    ^
    Quote Originally Posted by Klondyke View Post
    a weak currency is good for the country, provided that the country is mainly exporting
    In 2016, total U.S. trade with foreign countries was $4.9 trillion. That was $2.2 trillion in exports and $2.7 trillion in imports of both goods and services.

    https://www.thebalance.com/u-s-impor...istics-3306270

  13. #13
    Veni vidi fugi
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    Quote Originally Posted by stroller View Post
    A weaker dollar makes US manufacturing more competitive, me thinks it's all part of the Trump plan, not a failure of policies.
    It is funny how the trump bashers know so little about market forces. The Don might be a sack of shit that needs a bullet in the head, but he does know that a weaker dollar will kick start exports, thus manufacturing, thus employment....

  14. #14
    Newbie Dartanian's Avatar
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    Aging one, Here's a historical chart regarding the Dollar.

    U.S. Dollar Index - 43 Year Historical Chart | MacroTrends



    Quote Originally Posted by aging one View Post
    All the $$ decline has been under Trump. Really making America great again...

  15. #15
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by aging one View Post
    All the $$ decline has been under Trump. Really making America great again...
    Weak $ should be good for you AO.

  16. #16
    Thailand Expat
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    Quote Originally Posted by Norton View Post
    Weak $ should be good for you AO.
    That it is Norts, at 32.3 the start of the first semester and 32 right now. So saved 11% over the first years tuition and about 8% over last year. Over 4,000 dollars saved, plus they got more scholarship aid from their grades so life is good UC Santa Barbara one will graduate this year so 3 years. The one at Berkeley will take the full four.

  17. #17
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by aging one View Post
    The one at Berkeley will take the full four.
    Yes. Advanced degree in flag burning takes an extra year.

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