Thread: Thai currency continues upward trend

BoT warned not to intervene in baht currency
Rungkarn Rujiwarangkul

BANGKOK, 21 August 2010 (NNT) – An academician warns the Bank of Thailand (BoT) not to further intervene in the baht value, citing a speculation threat in a long run.

Mr Teerana Bhongmakapat, lecturer at the Faculty of Economics of Chulalongkorn University, explained that the appreciation of the Thai baht was caused by the weakening of the US dollar, the Japanese yen, and the euro. He said the BoT had been holding a significant amount of foreign assets as international reserve in an effort to control the currency movement. He then suggested the central bank to consider stopping its interference before it posed an adverse impact on the system.

Mr Teerana said foreign investors would use this opportunity to buy up assets and speculate on the low interest and the exchange rate. They would then sell off these assets when the BoT stops holding the currency and would thus enjoy the gains generated from the rate difference. A number of investors have already invested their capital to stock up on treasury bonds and securities over the past few weeks.

The currency intervention can also suppress the domestic interest rate, especially the deposit interest, leading to many disadvantages in a long run.

thainews.prd.go.th

http://thainews.prd.go.th/en/news.php?id=255308240003

Korn: THB strengthens in same direction with other currencies


BANGKOK, 24 August 2010 (NNT) – The Thai baht currency is confirmed to move in line with other currencies in the region despite concerns for its ongoing strong appreciation, according to Finance Minister Korn Chatikavanij.

The Minister brushed aside the news report that the baht was appreciating the most in the region, saying the Malaysian Ringgit actually appreciated even stronger than the baht. He reaffirmed that the baht was moving in line with other currencies in the region.

Mr Korn explained that the majority of currencies in the region had been appreciating because of the depreciating US dollars. He noted that Thai baht had been appreciating for years, and it did not affect exporters much because other currencies were also moving in the same direction.

The Minister, however, indicated that the purchasing power of trading partners should rather be monitored closely because their economic slowdown would indeed affect the Thai export sector.

As for risk factors for Thailand in the latter half of 2010, Mr Korn believed that they would come from external factors rather than internal ones.

Finance minister expects baht to continue strengthening


Finance minister expects baht to continue strengthening


วันพุธ ที่ 25 ส.ค. 2553

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BANGKOK, Aug 25 – Finance Minister Korn Chatikavanij on Tuesday predicted that the Thai baht will continue strengthening, but the trend will not affect Thailand’s export competitiveness because other currencies in the region are moving in the same direction.

“Undeniably, the baht has appreciated for a year and is very likely to continue strengthening,” he said.

What could have an impact on Thailand’s exports is the demand for purchases by its trading partners.

He said the current global economy is not as bad as in the previous two years, but it had not recovered as forecast earlier.

Since early this year, the baht has already strengthened by 5 per cent. (MCOT online news)

Bangkok Post : Korn: Stronger baht won

Korn: Stronger baht won’t hurt exports

• Published: 26/08/2010 at 04:09 PM
• Online news: Local News

The increase in the repurchasing rate by another 0.25 percentage points would not have much impact on the export sector, Finance Minister Korn Chatikavanij said on Thursday afternoon.

The Bank of Thailand’s Monetary Policy Committee yesterday decided to increase the key policy rate from 1.50 per cent to 1.75 per cent.

Mr Korn admitted that the increase in the key policy rate would result in the baht’s further appreciation, but said the Thai currency’s current value is in line with foreign currencies of other Asian countries.

The minister was confident that a stronger baht would not hurt the trade competitiveness of Thai manufacturers.

http://www.bangkokpost.com/news/loca...see-baht-value

PM: Govt to oversee baht's value

• Published: 27/08/2010 at 02:44 PM
• Online news: Economics

The government will oversee the value of baht to prevent it fluctuating too much, Prime Minister Abhisit Vejjajiva said on Friday afternoon.

“Relevant state agencies will introduce needed measures to stabilise the value of the Thai currency, but will not act against the money market’s mechanism. We have already experienced an expensive lesson from doing so in the past,” said Mr Abhisit.

The prime minister said the Bank of Thailand must oversee the baht's value and interest rates to ensure they stay at appropriate levels and in line with the changing situation. Any decision to adjust the policy rate must be made carefully as the central bank is also duty-bound to curb inflation.

He had discussed the economic situation with the Office of the National Economic and Social Development Board and believed the current inflation rate is controllable. Inflation is unlikely to be higher than the current level.

Mr Abhisit said even though the economy would grow at a slower pace in the second half of the year, the growth rate could be higher than seven per cent this year. He projected economic expansion would slow down to four to five per cent next year.

Asked if the government would allow manufacturers to raise prices of their products due to higher production costs, Mr Abhisit said the Ministry of Commerce would propose the matter for consideration by the cabinet at next week’s meeting.

“Consideration of whether to allow price increases will not be based mainly on cost of production as other factors would also be taken into account,” he said.

Asked whether the increase in prices could lead to an increase in the minimum wage rate, the prime minister said it is possible the daily wage would be raised - either before or at the same time as the salary of government servants is increased.

Civil servants have been promised a rise of five per cent in basic salaries next April.

Thai currency will appreciate, with more foreign inflows into Asian region, according to experts : National News Bureau of Thailand

Thai currency will appreciate, with more foreign inflows into Asian region, according to experts

BANGKOK, 30 August 2010 (NNT) — Financial experts from the Bank of Ayudhya say that the Thai currency will continue to appreciate, opening at 31.31-32 THB/USD today, the same as last week’s closing.

This rise is attributed to the latest figures of the US’ GDP, which has prompted other major currencies to strengthen against the greenback, while depreciating the USD.

The Baht opened the morning trading session at 31.29-30 against the USD, practically unchanged from last Friday’s closing. Experts have expressed confidence that foreign investors will turn to investing more in the Asian stock markets, forcing all regional currencies to appreciate; as seen in Malaysia, Singapore, India, Indonesia and Korea.

Meanwhile, the EUR is pegged at 1.2745/27/50 USD/EUR from last week’s close of 1.2711/2716 USD/EUR.

Experts predicted that the Baht will move in the range of 31.25 to 31.35 but downplay speculation that it might go as low as 31.25, saying it is unlikely as it already dropped considerably last week.

Thai currency records new high in 26 months : National News Bureau of Thailand

Thai currency records new high in 26 months

BANGKOK, 1 September 2010 (NNT) — The Thai currency has peaked, recording its new high for the past 26 months, at 31.21 THB/USD.

According to financial experts from the Bank of Ayudhya, the Thai baht is expected to appreciate further.

The Thai currency opened at 31.26-27 THB/USD this morning, up a notch from its yesterday's closing of 31.28-30 THB/USD. According to experts, the movement of the Thai currency is in line with others in the region.

As the signs of the economic recovery in Australia, China and India are getting clearer; they have become the deciding factors for foreign investors to invest in the region. Even at the time when the regional markets are considered overbought, investors have no better places to put their money in, experts said.

The Bank of Thailand (BoT) yesterday intervened in the foreign exchange market, buying the baht to shore up its rate at 31.29 THB/USD, after it showed sign of weakening earlier.

Meanwhile, the Japanese Yen is valued at 84.31-41 JPY/USD, slightly appreciating from the previous closing of 84.45-50 JPY/USD, while the Euro currency is traded at 1.2680-2682 USD/EUR, slightly depreciating from yesterday's close of 1.2695-2697 USD/EUR.

I must say I am liking it. I am buying a house back in America. In the last three months and still continuing is great for me. I need to change down 30,000 dollars to finish up my business. Three months ago that was a million baht, it is slowly creeping towards 930,000 baht.

Originally Posted by aging one

I must say I am liking it. I am buying a house back in America. In the last three months and still continuing is great for me. I need to change down 30,000 dollars to finish up my business. Three months ago that was a million baht, it is slowly creeping towards 930,000 baht.

Lucky you AO . Unfortunately, I'm in the boat heading for Klong Toei. In about 6 weeks time I'll need to transfer 20,000 pounds here for our new house. If I had done it at the begining of August I would have made almost 1,020,000. Now I'm down to about 950,000 ! Now if I were to sell our current home first , that would be a big help but then we'd have to rent temporary accomodation and make a double house move .... yuk

At this rate I will be opening my new business venture soon, under a footbridge somewhere with a plastic cup. I'm considering training up our pooch into this line of work so I can open up 2 branches at once.

Originally Posted by larvidchr

The BOT is protecting the few very very rich and the one supremely rich in Thailand it seems like, there is no logic to what they do other than that, only market forces from outside would ever see the THB go down, that is why the BOT have 3 times the reserves that Countries of similar size need's in foreign currency, rather than using some of all that money to improve much needed infrastructure, education ect in the country (a question also raised once in the foreign correspondents club at a meeting with the BOT gov.) No they sit on it so they can use it to protect the superrich against losses on the currency, that is the lesson learned from the "crash" of the THB in the nineties. No BOT governor would "literally" survive playing the THB down, since that would mean that the superrich in Thailand would loose billions, an unthinkable scenario!, the money policy of the Government and the BOT is not what serves the country Thailand best, but what serves the superrich Thai "elite" citizens best.

you got it backward as usual larv, the rich aren't not enjoying the strong THB, quite au contraire, remember they are being paid in foreign currency, that is export for them

it's actually better for the poor, the BoT is trying to control inflation which is again out of control, and the poor are the first victims of such inflation. It's really a hard call. Oil is being paid in US, so a strong THB means lower gas price at the pump, something you can't ignore as the economic activity depends on oil. At the same time, a strong THB will "slow down" the export economy and since THB interest rates rose, this is also going to be a "slow down" for the non-export businesses. At the end, this will curb inflation but at what costs.

Either way, not an easy solution

If you make your money exporting you double loose right butterfly, you export less since your price is high, you earn less since your pay is in foreign currency, but I suggest the loss in export quantity costs more than the in that context relative smaller loss in the exchange rate. But the important part here is that it is a massive collective loss to Thailand in export revenue, taxes ect.

Now what you're missing (as usual) is that it is not all Thailands superrich that are making their money on exports especially the richest one of them all, secondly during the beginning of the world economic crisis a lot of Thai fortunes where moved from THB to overseas accounts, that money have largely come back, so the very rich Thais hold most of their billions in Thai stock, property and in Thai banks just like Thaksin did, something he probably regrets today, the very rich Thais day to day earnings on export is peanuts compared to the value of their holdings in THB cash and Thai stock and property Butterfly.

http://www.bangkokpost.com/news/loca...inst-greenback

Baht soars against greenback

Concerns mount over export-competitiveness

• Published: 2/09/2010 at 12:00 AM
• Newspaper section: News

The baht is continuing to gain ground against the US dollar, hitting a two-year high on continued foreign inflows into the Thai financial markets.




Prime Minister Abhisit Vejjajiva is due to meet with Finance Minister Korn Chatikavanij, central bank governor Tarisa Watanagase and other ministers today to discuss the rise in the currency.

The baht, which traded at 31.1 to the US dollar yesterday, has gained more than 6% against the greenback in the year to date, prompting concerns among business leaders and policy makers about whether the country would lose competitiveness in global export markets.

The baht has been one of the strongest performers in the region this year, ranking only behind the Japanese yen and Malaysian ringgit.

In contrast, Vietnam's dong has fallen over 5.5% against the dollar following several devaluations in a bid to boost exports.

Ms Tarisa said Thailand's exports had continued to grow despite the baht appreciating faster than other currencies against the dollar.

"Right now, we rank second in terms of currency appreciation in the region," she said yesterday.

"Even so, exports have risen by as much as 30%, even though the stronger baht means lower revenues in baht terms."

Exports have been the main driver of the economy this year, surging 37% year-on-year through the first six months to help push growth to 10.6% for the first half.

Capital inflows from a trade surplus and investment have been a major factor pushing the baht to appreciate, despite intervention by the central bank that has pushed the country's foreign reserves up to record levels of more than US$150 billion (4.7 trillion baht).

Ms Tarisa said while the central bank was "monitoring" the situation closely, exporters had to adjust to the changing environment by hedging against currency risk, particularly given the weak recovery in the US and European economies.

Exports have already begun to slow in recent weeks, with July exports of $15.47 billion down sharply from $17.9 billion the previous month. Agricultural shipments, particularly of rice, were also down due to growing competition from Vietnam and other countries.

Commerce Minister Porntiva Nakasai said yesterday the export target of 20% growth this year would be "definitely put in jeopardy" if the baht rose to as high as 30 baht to the dollar.

She said the central bank should speed up efforts to adopt measures to stabilise the currency.

Dusit Nontanakorn, the chairman of the Thai Chamber of Commerce, said the private sector could tolerate a stronger baht so long as it moved in line with other currencies in the region.

"I think exporters already know to expect greater difficulty going forward due to higher foreign exchange risk," Mr Dusit said.

The Thai National Shippers' Council (TNSC), a group of 2,700 exporters, said export sectors such as agriculture would definitely suffer from a stronger baht due to their relatively low import content.

While a stronger baht hurts local firms selling abroad, imported goods such as oil, equipment and parts become cheaper in local terms.

TNSC chairman Paiboon Polsuwanna said shrimp and chicken processors, who export over 40 billion baht worth of goods a year, had import content of just 15%, mostly in the form of animal feed.

"Thai exporters are currently unable to compete with competitors in the region, including those from Indonesia and Malaysia ... and not to mention the Vietnamese, who have benefited from several rounds of devaluations," said Mr Paiboon, a former head of the Food Processing Industry Club.

"Exporters are now suffering every day with losses from sales. Our margin is expected to come down significantly in the third quarter."

Federation of Thai Industries chairman Payungsak Chartsutipol agreed that it was important that the baht moved in line with other currencies in the region.

"Some of our members are now projecting the baht to reach 30 baht to the dollar and are preparing their business plans accordingly," Mr Payungsak said.

Experts predicted that the Baht will move in the range of 31.25 to 31.35 but downplay speculation that it might go as low as 31.25, saying it is unlikely as it already dropped considerably last week.

It's now 31.17

Originally Posted by StrontiumDog

Thai currency records new high in 26 months : National News Bureau of Thailand

Thai currency records new high in 26 months

BANGKOK, 1 September 2010 (NNT) — The Thai currency has peaked, recording its new high for the past 26 months, at 31.21 THB/USD.

According to financial experts from the Bank of Ayudhya, the Thai baht is expected to appreciate further.

The Thai currency opened at 31.26-27 THB/USD this morning, up a notch from its yesterday's closing of 31.28-30 THB/USD. According to experts, the movement of the Thai currency is in line with others in the region.

As the signs of the economic recovery in Australia, China and India are getting clearer; they have become the deciding factors for foreign investors to invest in the region. Even at the time when the regional markets are considered overbought, investors have no better places to put their money in, experts said.

The Bank of Thailand (BoT) yesterday intervened in the foreign exchange market, buying the baht to shore up its rate at 31.29 THB/USD, after it showed sign of weakening earlier.

Meanwhile, the Japanese Yen is valued at 84.31-41 JPY/USD, slightly appreciating from the previous closing of 84.45-50 JPY/USD, while the Euro currency is traded at 1.2680-2682 USD/EUR, slightly depreciating from yesterday's close of 1.2695-2697 USD/EUR.

Hope the Aussie Oxford stays up strong ( 28.97 this morning).

Originally Posted by larvidchr

If you make your money exporting you double loose right butterfly, you export less since your price is high, you earn less since your pay is in foreign currency, but I suggest the loss in export quantity costs more than the in that context relative smaller loss in the exchange rate. But the important part here is that it is a massive collective loss to Thailand in export revenue, taxes ect.

Now what you're missing (as usual) is that it is not all Thailands superrich that are making their money on exports especially the richest one of them all, secondly during the beginning of the world economic crisis a lot of Thai fortunes where moved from THB to overseas accounts, that money have largely come back, so the very rich Thais hold most of their billions in Thai stock, property and in Thai banks just like Thaksin did, something he probably regrets today, the very rich Thais day to day earnings on export is peanuts compared to the value of their holdings in THB cash and Thai stock and property Butterfly.

try harder

and your obsession with the rich by trying to politicize the current currency swings has been duly noted

http://thainews.prd.go.th/en/news.php?id=255309020018

FTI advises govt to control baht appreciation

BANGKOK, 2 September 2010 (NNT) – The Federation of Thai Industries (FTI) suggests the government to launch a measure to control Thai baht appreciation after the currency has strengthened to the highest in 13 years as a result of an excessive capital inflow in the past months.

Chief Advisor to the FTI Board of Directors Santi Vilassakdanont said the strengthening of the Thai currency had been influenced by several factors but mainly the large amount of foreign capital that poured into the Stock Exchange that raised the average trade value to over 40 billion THB per day.

In the past few months, Thai baht has strengthened up by 5-6%. The trend is expected to continue until it reaches 30 THB against USD. Mr Santi reckoned that it should best stand between 32.50-33.00 THB to minimize the risk on small business operators.

The Chief Advisor urged the economic cabinet meeting held today to focus on considering additional measures to slow the baht appreciation. Even though Bank of Thailand’s interference effort is currently in place, over-intervention may have adverse effect on international reserves.

Korn, Tharisa tasked to tackle baht rise at haste : National News Bureau of Thailand

Korn, Tharisa tasked to tackle baht rise at haste

BANGKOK, 2 September 2010 (NNT) – The Council of Economic Ministers has assigned Finance Minister Korn Chatikavanij and Bank of Thailand (BoT) Governor Dr Tharisa Watanagase to find measures to deal with the rising baht currency.

Deputy Prime Minister for Economic Affairs Dr Trairong Suwannakhiri indicated that the meeting of the Council of Economic Ministers today, chaired by Prime Minister Abhisit Vejjajiva, mainly discussed the problem of Thai baht appreciation. He stated that Mr Korn and Dr Tharisa were tasked with formulating pragmatic solutions to the issue and also ensuring good economic conditions among entrepreneurs.

However, Dr Trairong personally believed that the strong baht would not affect the country’s overall economic growth, ensuring that the gross domestic product (GDP) would expand beyond 7% for the whole year.

http://thainews.prd.go.th/en/news.php?id=255309020041

Commerce Min sets up a panel to prevent impact from baht appreciation

BANGKOK, 2 August 2010 (NNT) – The Commerce Ministry has set up a panel to solve the impact on export from baht currency appreciation.

According to the Commerce Ministry, the Thai currency strengthened by 3% within these two months. The Commerce Ministry and the Federation of Thai Industries (FTI) thus joined force to set up a panel to solve any possible problem.

The panel is tasked to compile a report on the impact of the stronger baht currency toward Thai export sector, particularly among the export products which used domestic materials such as agricultural and food products.

Measures to prevent any possible problem from the impact will also be implemented. The panel operation is aimed to be concluded within two weeks.

FTI President said that the rapid increase of baht value resulted in lower profit earned by exporters. Cost of agricultural products had risen by 6-7%, while the competition with rivals remains tense. However, he believed that the export this year would achieve the target set by the Commerce Ministry.

http://thainews.prd.go.th/en/news.php?id=255309020043

Korn: Baht rise to not affect national exports

BANGKOK, 2 September 2010 (NNT) – Finance Minister Korn Chatikavanij confirms that the rising baht currency will not affect Thai exports.

Mr Korn stated that the meeting of the Council of Economic Ministers on Thursday mainly discussed the problem of Thai baht appreciation, which was still considered moderate and in line with the movements of other regional countries. The Minister assured that the strengthening of the Baht would have no impact on the export sector, reasoning that the total export value had been satisfactory and seemed to be on the uptrend.

Mr Korn also attributed the continuous rise of the Thai baht to the US’s weakening economy and high public debt, which had lowered the confidence of investors in holding the US dollar.

Meanwhile, the Government also assigned the Bank of Thailand (BoT) to closely monitor the strong baht for fear of speculation among investors in the bond market. As a response, the central bank affirmed that appropriate measures to deal with such an issue had been formulated.

Originally Posted by larvidchr

Originally Posted by StrontiumDog

Thai currency records new high in 26 months : National News Bureau of Thailand

Thai currency records new high in 26 months

BANGKOK, 1 September 2010 (NNT) — The Thai currency has peaked, recording its new high for the past 26 months, at 31.21 THB/USD.

According to financial experts from the Bank of Ayudhya, the Thai baht is expected to appreciate further.

The Thai currency opened at 31.26-27 THB/USD this morning, up a notch from its yesterday's closing of 31.28-30 THB/USD. According to experts, the movement of the Thai currency is in line with others in the region.

As the signs of the economic recovery in Australia, China and India are getting clearer; they have become the deciding factors for foreign investors to invest in the region. Even at the time when the regional markets are considered overbought, investors have no better places to put their money in, experts said.

The Bank of Thailand (BoT) yesterday intervened in the foreign exchange market, buying the baht to shore up its rate at 31.29 THB/USD, after it showed sign of weakening earlier.

Meanwhile, the Japanese Yen is valued at 84.31-41 JPY/USD, slightly appreciating from the previous closing of 84.45-50 JPY/USD, while the Euro currency is traded at 1.2680-2682 USD/EUR, slightly depreciating from yesterday's close of 1.2695-2697 USD/EUR.

So the BOT is actively supporting an upward trend, that makes no sense at-all Thailand would benefit from a lower rate on the THB in the tourism and export market, while there are no big immediate benefits to society of a high THB. Just because the Dong, Ringit or Yuan goes up it does not necessarily mean that it is best for Thailand to go the same route, yet that seems to be their sole argument/excuse all the time, like children competing

No, the stronger the baht is, the cheaper oil, gas and food is for Thai's.

The thought that having a weak currency is good is a flawed keynesian theory that makes no sense.

The baht will continue to get stronger and the western currencies will continue to get weaker. Thailand is gaining real purchasing power and the west is losing real purchasing power.