Thai Baht hits highs, BoT to take measures

[buksida]

The Bank of Thailand is set to tighten foreign exchange monitoring to prevent short-term baht speculation after the local currency surged to its highest level in more than six years on Thursday.

The central bank will take a stricter approach in tracking transactions suspected of parking short-term money in the country for speculative purposes, said Vachira Arromdee, assistant governor overseeing financial markets operations.

Speculating in the baht for short-term gain is undesirable behaviour, Ms Vachira said.

The baht on Thursday rallied past the 31-mark to its strongest level against the US dollar in more than six years. Thailand's currency unit traded at 30.95, up from the previous day's 31.19.

The baht has emerged as the best-performing currency in Asia, gaining 4.8% year-to-date against the dollar. The Japanese yen is second with a 1.8% rise.

If the baht continues to gain at a higher and faster pace than currencies of trade competitors, the trend does not seem to be in line with Thailand's economic fundamentals and this would deal a blow to the real sector and operators' adaptability, Ms Vachira said.

Source: https://www.bangkokpost.com/business/16 ... monitoring

'Undesirable behviour' ... really? Forex trading is multi-trillion dollar market.

[caller]

Trump will be watching closely.

[buksida]

Bank of Thailand eyes measures to curb hot money
The Bank of Thailand (BoT) is set to implement measures to curb hot money following the baht's rapid gain.

"The measure is expected to be taken soon. The central bank already has measures to take care of the foreign exchange rate," said Monetary Policy Committee secretary Titanun Mallikamas.

The central bank has closely monitored offshore fund inflows, especially those flowing into short-term bonds, he said, adding that the inflows could be for both speculation and investment purposes as Thai bonds are considered to be safe haven assets.

The rate-setters expressed concern that the baht's rise might not be consistent with economic and fundamentals and would continue closely monitor developments of exchange rates and capital flows, he said.

The baht is the top performing currency in Asia with a roughly 5.5% gain against the greenback this year. The rapid appreciation has prompted worries that it is eroding the country's competitiveness and deepening the export slump.

https://www.bangkokpost.com/business/17 ... -hot-money

They may want to monitor those running the county. Anyone remember the last military regime setting up two rates for the baht to do exactly this?

[buksida]

Strong baht sends jitters through Thai export sector
Thailand’s private sector has expressed serious concern over the strengthening baht, which has rallied to its highest level against the US dollar for six years and may badly affect the country’s exports of agricultural produce and consumer products.

The baht has gained 5.5% against the US dollar since January and now stands at 30-31 baht per US$, outperforming other currencies in the region.

Mr. Boonyasith Chokwatana, chairman of the Sahapat Group, a leading Thai distributor of consumer products, has urged the government to address the problem as a matter of urgency to protect the export sector.

He noted that the ideal baht value against the US$ should be around 34.

Thai Rice Exporters’ Association president Mr. Charoen Laothammatat, said that Thai rice exports this year might not reach the 10-million tonnes target, set by the Commerce Ministry, due to the unusually strong baht.

https://www.thaipbsworld.com/strong-bah ... rt-sector/

[handdrummer]

I could live with 34. At that rate I could change back to a retirement visa instead of a marriage visa. Interesting how govts. can just decide what their money is worth. We need a universal currency that remains fixed. Ok, you stop jumping up and down now, one world govt. is not here yet.

[buksida]

Interesting how govts. can just decide what their money is worth.

This is exactly why decentralized peer to peer digital currencies are growing in popularity. No govt or central bank can control them.

[caller]

Seems an independent arm of the FT is also putting it's boot into Thailand's economy. It talks of persistent weaknesses in exports, which is odd (but completely believable), as until recently, before the 'election', the junta kept reporting on 'record breaking exports.' Just like their record breaking tourism, I guess?

https://www.bangkokpost.com/opinion/opi ... e-the-ills

[handdrummer]

Interesting how govts. can just decide what their money is worth.

This is exactly why decentralized peer to peer digital currencies are growing in popularity. No govt or central bank can control them.

There's no stability with those currencies. They go up and down like a toilet seat.

[handdrummer]

Seems an independent arm of the FT is also putting it's boot into Thailand's economy. It talks of persistent weaknesses in exports, which is odd (but completely believable), as until recently, before the 'election', the junta kept reporting on 'record breaking exports.' Just like their record breaking tourism, I guess?

https://www.bangkokpost.com/opinion/opi ... e-the-ills

Record breaking or broken record, playing the same tune over and over again?

[buksida]

There's no stability with those currencies. They go up and down like a toilet seat.

And you think govt controlled currencies are any better? Seen what's happening to Venezuela?

[handdrummer]

There's no stability with those currencies. They go up and down like a toilet seat.

And you think govt controlled currencies are any better? Seen what's happening to Venezuela?

Venezuela and others but, to be perfectly selfish, I don't live in or deal with any of those countries. My only concern is the US$ & the Baht and I'm not interested in dealing in currencies. I'm too old & have too little time left to be involved in that.

[HHTel]

Also on the selfish note, I don't really care what happens politically or otherwise. I just want my baht back!!

[buksida]

BOT’s move to curb rapid Thai Baht surge
The Bank of Thailand (BOT) has scaled back the auction size of short-term bonds this month in what was seen as an attempt to curb the rapid surge of Thai Baht which hit a six-year high on Monday.

The central bank has not explicitly said that the reduction of short-term bond supply is aimed at overseeing the movement of Thai Baht. However, the market has interpreted the move as the attempt to slow the capital inflow.

“The Bank of Thailand’s short-term bond supply reduction may be one of the initials steps to curb the movement of the Thai Baht,” said Kasikorn Research Center.

The Baht rose to hit a six-year high at Bt30.52 on July 1, before it was slightly weaker to around Bt30.8 per dollar on Tuesday in response to the news about the central bank’s decision to reduce the short-dated note supply in July.

The central bank reduces the supply of short-term bonds, including three-month, six-month and one-year bonds. The size of three-month and six month bonds will be cut by Bt5 billion per week in July. The supply of one-year note issuance will be cut by Bt10 billion.

https://www.thaipbsworld.com/bot-moves- ... aht-surge/

[HHTel]

It may be a six year high against the dollar, but it's a more than twenty year high against the pound!!

[buksida]

Thailand Wants to Restrain the World’s Strongest Currency
Thailand’s central bank is fretting over how to cool the world-beating surge in the baht just as the U.S. keeps a watchful eye out for signs of unfair currency policies.

Bank of Thailand officials intensified verbal intervention in the past week, with Senior Director Don Nakornthab saying Wednesday the “worried” monetary authority is mulling how the baht can be restrained. He also flagged the possibility of an interest-rate cut.

The baht has climbed 8.3% against the dollar in the past year, the best performer globally, according to Bloomberg-compiled data. It’s viewed as a safe haven given Thailand’s history of current-account surpluses and near-record foreign reserves.

The currency’s surge threatens to deepen this year’s sharp slowdown in the export-led economy.

“For now, verbal intervention, physical intervention and closely monitoring non-resident Thai baht accounts” are options for the central bank, but capital controls are unlikely, said Roong Sanguanruang, a market analyst at Bank of Ayudhya Pcl in Bangkok.

Intervention in the foreign-exchange market isn’t as easy as before because of growing U.S. criticism, she also said.

Thailand was listed as a major trading partner in the Treasury Department’s semi-annual foreign-exchange report in May, signaling greater oversight of its currency policy.

The Bank of Thailand has previously rejected allegations of currency manipulation and said it doesn’t seek an unfair advantage in trade.

https://www.bloomberg.com/news/articles ... baht-surge