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  • Midweek update and some news.
    • Today, November 27th 2019 the Thai baht is being exchanged at 29.79 per (1) US dollar. The Thai Baht still remains strong.


    • Explainer: The factors behind the Thai baht's surge and why Bangkok authorities are worried


    https://www.todayonline.com/singapor...ok-are-worried
    • Slowdown hits Pattaya hoteliers


    Hotel business in Pattaya has begun to feel the pinch of the strong baht and the economic slowdown, with reports of declining occupancy rates.

    Under normal circumstances, most hotels in the popular beach city would be fully booked during the high season, but this year the overall occupancy rate is 80%, said Pattaya deputy governor Manoj Nongyai

    The surging local currency has made foreign travellers more price-conscious, he said.

    The city is a first-night stay for many foreigners visiting Thailand, according to a study. They then choose to stay the other nights on Koh Samet in Rayong or in Bangkok before flying home.

    The slowdown in hotel business also stems from changes in behaviour, especially by Chinese tourists, who tend to travel independently in small groups instead of buying tour packages.: https://www.bangkokpost.com/business...liers#cxrecs_s
    Keep your friends close and your enemies closer

    Comment


      • End of the week update. The Thai baht looks like it has stabilized (below 30.00) and still remains strong. Must suck to be the pot-licker/boon mee.


      November 29th, 2019, the Thai baht is being exchanged at 29.79 per (1) US dollar.

      • KBank predicts baht climb against dollar



      Kasikornbank (KBank) sees the baht rising to 29.25 against the US dollar at the end of 2020, pointing to the US's structural problems and external uncertainties.

      The baht is expected to march past 30 to 29.75 versus the dollar in the first half of next year, up from 30.50 predicted at the end of this year, before strengthening further to 29.25 at the end of 2020, said Kobsidthi Silpachai, head of capital markets research at KBank.

      Trade tensions between the US and China, the US presidential election, Federal Reserve rate cuts and Brexit are key factors pressuring the dollar worldwide, he said.

      The trade war is expected to continue and could intensify as the presidential election approaches.

      The baht is the best-performing currency in Asia, up about 7% against the dollar this year, as investors perceive it as a safe haven during the global economic slowdown.

      Mr Kobsidthi forecasts the US central bank to cut its policy rate twice -- once in the first half of next year and again in the third quarter -- thus weakening the dollar relative to the baht.

      Thailand's economic imbalances will further strengthen the baht against the greenback, he said, and the current account should continue to have a surplus of US$30 billion next year.

      Although Fed rate cuts are expected to continue, Mr Kobsidthi ruled out the possibility of further rate reductions in Thailand next year, given limited policy space.

      KBank has a downbeat view of GDP growth next year, expecting a decline to 2.7% in 2020 from 2.8% this year.

      "The economy's technical recession loomed over the third quarter," Mr Kobsidthi said. "Without seasonal adjustments, the GDP growth rate for the third quarter would have contracted on a quarterly basis."

      Regarding the country's structural economic problems, fiscal policy is a better tool to support the country's economic momentum and manage the foreign exchange rate than monetary policy, he said.

      The efficiency of monetary policy is typically seen during a vicious economic cycle, so the central bank's recent measures have had little benefit for the baht.

      Both external factors and the Bank of Thailand's measures have resulted in significantly lower offshore fund inflows to short-term Thai bonds. Net inflows to short-dated Thai bonds have dipped to 50 billion baht, the lowest level since 2016, from 107 billion baht in July.

      A narrower bond yield between long- and short-end notes contributes to lower foreign investment in Thai short-term bonds, Mr Kobsidthi said.: https://www.bangkokpost.com/business...against-dollar
      • Thai central bank chief says worried about rapid baht gains



      Thailand's central bank is still concerned about the rapid strengthening of the baht, and has steadily taken action to prevent the currency from rising too fast, the governor said.

      The baht's strength has mainly been driven by the country's hefty current account surplus, not "hot money", or speculative fund inflows, Veerathai Santiprabhob told a seminar late on Wednesday.

      The baht will remain highly volatile, given external uncertainty and high global liquidity, he said.

      "Nobody can tell if the baht will go higher or lower, but it's likely to be more volatile," Mr Veerathai said.

      The baht has gained 7.7 per cent against the US dollar this year, making it Asia's best performing currency, and putting further pressure on Thailand's trade-dependent economy amid global trade tensions.

      Mr Veerathai also said Thai banks' net interest margins were high - at 2.7-2.8 per cent, double those of banks in Singapore - and should be lower.

      There are no clear measures on how to reduce them yet, but the central bank may consider allowing more non-banks to compete in the market, he said.: https://www.businesstimes.com.sg/gov...pid-baht-gains
      Keep your friends close and your enemies closer

      Comment


      • Start of another awful month for the pot-licker. The Thai baht still remains strong against the US dollar.

        Today, December 2nd, 2019 the Thai baht is being exchanged at 29.78 per every (1) US dollar.

        Keep your friends close and your enemies closer

        Comment


        • Read a bank report along the lines of the Thai Economy will probably go into recession next year and the baht will strengthen to 29 to the dollar. These simplistic analyses are designed to herd sheep.
          I visited TC a few times as a guest but had to stop. It is a sickening place. - Aging One

          Comment


          • Majestically enthroned amid the vulgar herd

            Comment


            • Awaiting for the false torrent.

              Part and parcel to the world of make believe - the world over.

              Comment


                • Baht concerns abound/The currency's rise is expected to continue well into 2020 and bring far-reaching consequences to an already sputtering economy.



                More than two decades ago, the baht suffered heavy devaluation as a result of speculation, forcing Thailand's central bank to de-link the local currency from the US dollar and adopt a managed floating exchange rate.

                Fast-forward to the present and the baht's value has become a challenge for the trade-reliant economy. This time the local currency's strength is the issue, as opposed to drastic depreciation during the 1997 financial crisis.

                The last time the baht's value against the greenback touched 29 was in 2013. The currency appreciation irked many businesses and policymakers to the point that there was a public rift between Finance Minister Kittiratt Na-Ranong and former central bank governor Prasarn Trairatvorakul, as the latter did not acquiesce to the former's demand to cut the policy interest rate to curb the appreciation.

                The strong baht in 2019 is a result of Thailand's massive current account surplus. The surplus, worth US$26.4 billion (797 billion baht) on a year-to-date basis as of September, stems from lower import value compared with export value, inflows of tourism revenue and near-record foreign reserves of about $222 billion.

                Ample foreign reserves have made Thailand stand out as a safe haven to park capital, either for actual investment or speculation, amid the US dollar's significant retreat, rattled by the shaky future of the global economy, the Federal Reserve's monetary easing and a tit-for-tat trade dispute between the world's two biggest economies.

                The baht is the top-performing currency in Asia, gaining nearly 8% against the greenback year-to-date, even as Thailand bears the brunt of subdued growth yet again.

                Domestic economic growth was 2.4% year-on-year in the July-to-September period, up slightly from the second's quarter 2.3% reading but down from the first quarter's 2.8%.

                OUTSIDE THE BOX

                Bank of Thailand governor Veerathai Santiprabhob said recently that the baht was surging beyond the economy's fundamentals and the central bank was concerned about its strength.

                Given that capital inflows should be balanced against outflows to ease pressure on the baht, the central bank aims to radically overhaul the Exchange Control Act.

                The act, which has been in place for more than 70 years, was drafted based on a perspective of positive risk, referring to how local investors, who are eligible to invest abroad, must meet the stipulated criteria.

                The existing paradigm of global financial developments should register negative risks, since investors can freely invest in overseas assets as long as they are not involved in prohibited activities such as speculation. This fits well with the modern world because there is a high degree of flexibility, Mr Veerathai said.

                The central bank is also poised to change its outdated foreign reserve management, as asset allocation is restricted to traditional asset classes.

                To curb the baht's strength, thinking outside of the box is needed because Thailand is a small economy, said Jittipol Puksamatanan, chief strategist at Krungthai Bank.

                He suggested the central bank encourage banks to offer cheap-rate loans to importers or any companies planning to invest or acquire businesses outside the country to accelerate capital outflows and ease pressure on the baht.

                The central bank could also offer to absorb foreign exchange hedging costs for institutional investors, including the Government Pension Fund and the Social Security Fund, to encourage them to plough more money into overseas markets, Mr Jittipol said.

                He agreed with Mr Veerathai that the central bank should change the way foreign reserves are managed and focus on investments other than US treasury bills.

                "The baht is managed against only the US dollar, and the dollar's weakness is the problem as market players shun it," Mr Jittipol said.

                He gave Singapore as an example. The Monetary Authority of Singapore will do nothing if the US dollar becomes weaker or firmer, as the regulator manages the Singapore dollar against a basket of currencies of major trading partners.

                Moreover, the Bank of Thailand should clearly communicate with market participants that it will manage the currency until the baht moves to a level considered appropriate and seriously take action to thwart a one-sided bet, Mr Jittipol said.

                "I think the central bank might be concerned that the US will include Thailand on its watchlist of currency manipulators, so only a handful of activities in managing the baht have been spotted," he said.

                Monetary policy easing has a minuscule effect on the baht against the backdrop of an existing low-rate environment, but a negative policy rate would blunt the baht's gain.

                "The central bank, however, would avoid cutting the benchmark rate to below zero because it could pose a threat to the economy," Mr Jittipol said.

                UPWARD TREND

                Despite a slew of measures to stem the baht's strengthening value, such as cutting the policy interest rate and short-term bond supply of the central bank, coupled with lowering the cap on the outstanding balance of non-resident accounts by a third, the local currency's value remains a pain point for the export and service sectors.

                The baht's value is expected to keep rising in 2020, but the strengthened pace will be slower than what was seen over the past couple of years, Mr Jittipol said.

                The baht is projected to reach 28.70 against the dollar next year on assumptions that exports will start to rebound and the number of inbound tourists will outpace outbound volume.

                The local currency is estimated to hover narrowly at 30-30.30 to the dollar for the remainder of this year on anticipation that no trade deal is confirmed between China and the US.

                Commenting on whether the baht is overvalued, Mr Jittipol said the baht is still far below fundamentals relative to foreign reserves, as Thailand's international reserves account for 10 months of import value, well above the global standard of three months.

                The baht, however, is considered overvalued relative to export competitiveness, he said.

                Kobsidthi Silpachai, head of capital market research at Kasikornbank, sees the baht rising to 29.25 against the US dollar by the end of 2020.

                The baht is expected to march past the 30-mark to 29.75 versus the dollar in the first half of next year, up from 30.50 predicted at the end of this year, Mr Kobsidthi said.

                Trade tensions between the US and China, the 2020 US presidential election, the Fed's future rate cuts and Brexit are key factors pressuring the dollar, he said.

                EXPORT DOLDRUMS

                As the baht is expected to continue appreciating into 2020, Thai shipments will continue to suffer as a result, said Kriangkrai Tiannukul, vice-chairman of the Federation of Thai Industries.

                Exports plummeted by 2.4% year-on-year during the first 10 months, with a loss in value of 200-300 billion baht.

                Next year, exports will continue facing higher risk as the economic slowdown extends to major trading partners, oil prices fall and the baht strengthens, according to the Commerce Ministry.

                "If the baht continues to appreciate next year, GDP growth will likely miss 3%," Mr Kriangkrai said. "The stronger baht has lowered export competitiveness compared with neighbouring countries."

                Thailand relies heavily on the export sector to mobilise the economy, with shipments accounting for 70% of the country's GDP.

                Although measures to ease upward pressure on the baht from the central bank are appropriate, it takes time to yield positive results, Mr Kriangkrai said.

                "We agree with the central bank's measures, but the appropriate level for the baht should be 32 versus the dollar," he said.

                Visit Limlurcha, vice-chairman of the Thai National Shippers' Council, said the authorities should use financial policies to rein in foreign capital inflows, while continuing to relax some regulations to encourage capital outflows from local investors.

                Thai exports have been on the losing end as a result of the strengthening local currency, Mr Visit said.

                "Other countries can dump their prices to increase export value, but Thai exporters have a lesser gap of margins to use this method," he said.

                With ample foreign reserves and low inflationary pressure, Thailand will continue to be seen a safe haven attracting capital inflows next year, Mr Visit said.: https://www.bangkokpost.com/business/1806469#cxrecs_s
                Keep your friends close and your enemies closer

                Comment


                • Midweek update and some news.
                  • Today, December 4th, 2019 the Thai baht be being exchanged at 29.85 per (1) US dollar.


                  • Shippers: Exports down, baht too strong


                  https://www.bangkokpost.com/business...aht-too-strong
                  Keep your friends close and your enemies closer

                  Comment


                  • An end of the week update and some news.
                    • Today, December 6th, 2019 the Thai baht is being exchanged at 29.92 per (1) US dollar. The Thai baht still remains strong.


                    • Baht likely to weaken, says BoT deputy governor
                    https://www.bangkokpost.com/business...ernor#cxrecs_shttps://www.bangkokpost.com/business...over-baht-gain
                    • BoT: Many options to fight baht strength


                    The Bank of Thailand says it has many tools left to manage capital inflows and curb the local currency's strength, which is hurting growth prospects in the Southeast Asian economy.

                    The scope and speed of the baht's appreciation is out of line with economic fundamentals such as the current account surplus, said Don Nakornthab, a senior director in the central bank's economic and policy department.

                    What monetary policymakers have done so far are "baby steps", he said Monday in his office in Bangkok.

                    "On capital inflow measures, I think they have a lot of options," Mr Don said, pointing to measures that some countries have used, such as holding periods, to curb hot money flows.

                    The central bank in July imposed measures to counter short-term inflows and last month relaxed rules to spur outflows. The baht has climbed more than 8% against the dollar in the past 12 months, hurting exports and tourism and putting the economy on course for the slowest annual growth in five years.

                    The monetary authority has said it will review the relaxation of rules governing outflows every three months.

                    "There are some ceilings on certain limits, and they could be lifted," he said.

                    Bank of Thailand governor Veerathai Santiprabhob last month indicated scope for another interest rate cut if economic growth disappoints. The policy rate has been lowered twice this year to 1.25%, matching a record low.

                    LOWER BOUND

                    At the same time, Mr Veerathai has cautioned against taking the benchmark interest rate below zero.

                    Mr Don said the effective lower bound of the policy rate will depend mostly on how much can be transmitted into the economy.

                    Commercial banks aren't allowed to offer negative rates, he said. They also have to pay a contribution of 0.46% of deposits to a bailout vehicle, the Financial Institutions Development Fund (FIDF).

                    "If a bank gets stuck with 0.5%, then 0.5% will be the lower bound from the FIDF standpoint," Mr Don said. "If the bank can't follow through, it doesn't matter how much we lower the interest rate, the transmission will not go through."

                    If there was a big upheaval like the global financial crisis, the contribution to the bailout fund would probably have to be removed to allow for large rate cuts, but such a scenario is a tail-end risk only, he said.

                    "Some ammunition is needed for large negative shocks," Mr Don said.

                    The central bank will lower its economic growth projections for 2019 and 2020, he said. While this year is likely to be a low point for the economy, the Monetary Policy Committee was told in November that sub-3% expansion is a possibility in 2020, Mr Don said.

                    "We still expect next year to be better than this year, but perhaps not much better," he said.: https://www.bangkokpost.com/business...-baht-strength
                    Keep your friends close and your enemies closer

                    Comment


                    • Surprisingly, the British Pound has recovered to just under 40 Baht.
                      Originally posted by Ergenburgensmurgen;n186588
                      What are you talking about, I don't post on Teakdoor.


                      https://thailandchatter.com/core/ima...ies/giggle.gif

                      Comment


                      • Originally posted by serrollt View Post
                        Surprisingly, the British Pound has recovered to just under 40 Baht.
                        Is that the currency that you brought over with your good self?

                        Comment


                        • It is one of the currencies I receive income in, but haven't brought any cash with me. Not exchanging anything while the Baht is so strong.
                          Originally posted by Ergenburgensmurgen;n186588
                          What are you talking about, I don't post on Teakdoor.


                          https://thailandchatter.com/core/ima...ies/giggle.gif

                          Comment


                          • To start this week off, the Thai baht remains strong.

                            Today, December 9th, 2019 the Thai Baht is being exchanged at 29.92 baht per (1) US dollar.


                            The British Pound is being exchanged at 39.07 baht per (1) British Pound

                            Keep your friends close and your enemies closer

                            Comment


                            • Midweek update, some news and questions that remain unanswered.

                              Today, December 11th, 2019 the Thai baht is being exchanged at 29.87 baht per every (1) US dollar.

                              • KBank warns of baht volatility after sell-offs


                              https://www.nationthailand.com/news/...ernal_referral
                              • The questions the pot-licked has failed to address:
                              Keep your friends close and your enemies closer

                              Comment


                              • End of the week update and some news.

                                Today December 13th, 2019 the Thai baht is being exchanged at 29.73 baht per (1) US dollar.

                                • Analysts differ on baht movement as BOT sees decline




                                As of December 4, foreign and Thai analysts saw opposing directions of the baht movement.

                                JPMorgan Chase forecast the baht would depreciate to Bt30.6 per dollar in the fourth quarter next year. While Standard Chartered believed it would drop to Bt31 per dollar in the same period and Bt31.30 in 2021.

                                Rabobank put the baht value at Bt33.8 per dollar in the final quarter of next year.

                                Their views differed from those of Thai analysts who estimated the baht would continue to appreciate against the US dollar and other currencies in the region.

                                The predictions of foreign and Thai analysts suggested that the baht would move in either direction, or moving in a range between Bt28.7 to 33.8/dollar, according to BOTSS.

                                Earlier, deputy central bank governor Mathee Supapongse said the baht was on a downtrend but urged exporters to brace for a two-way movement.

                                His message was apparently intended to counter the negative views of some Thai exporters and analysts who saw continuous strengthening of the baht after a 7 per cent gain on the dollar this year.

                                Analysts at Kasikornbank forecast the baht to appreciate to Bt29.3 per dollar next year.

                                Charl Kengchon, executive chairman at Kasikorn Research Centre said on Monday that the baht will strengthen further if the US Federal Reserve lowers its key policy rate again in the first quarter next year. It is likely to happen, he added.

                                A major factor pushing up the baht is the country's high current account surplus at around $30 billion, despite the higher figures in the past two years.

                                Foreign investors will still consider the baht a safe haven asset among emerging market economies, Charl believes.: https://www.nationthailand.com/busin...ernal_referral
                                Keep your friends close and your enemies closer

                                Comment

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