Bank of Thailand and government agree no intervention on hot baht

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BoT says it won't stem soaring baht

Prasarn doesn't see strength as unusual

Published: 21 Mar 2013 at 00.00
Newspaper section: News

The central bank and Finance Ministry have decided against "special" intervention to curb the soaring baht which hit a 16-year high Wednesday.

The chart traces the adventures of the baht compared with the US dollar from May, 1997, just before the collapse of the currency, until now. (Chart by TradingEconomics.com, BangkokPost.com)

The decision was reached at a meeting of economic agencies to discuss the possible ramifications of the baht's inexorable rise on the economy.

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bkkfarang1
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Discussion 17 : 21 Mar 2013 at 17.3917
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Worzel, whilst I know this is only my opinion, having been in Thailand when they created the 1997 Asia crisis, area's that worry me are.
1. High Interest rates
2. Policies to buy Rice at a certain price then sell it lower and as the Baht gets stronger the debt grows
3. Limitation on the 49% ownership by foreign entities
4. The first car promotion saving 100000, where it appears no that 50% have failed to meet the debts
5. Borrowing of Billions for schemes that will never see the light of day, like to ill fated Dong Meaung train connection that is now costing millions to remove, a double whammy!
6. Corruption levels in all government dep
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Worzel
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Discussion 16 : 21 Mar 2013 at 16.5716
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Bkkfarang - What is wrong the local financial policy? Whilst I accept your commnents, there are currenices such as HKD that are pegged to the US. There are others that back their currency with bundles of USD in their vaults. These will trade very close to the USD.

Monetary policy has no specific obligation to aid exporters that have for many years overly benefited from a weak baht. Thai overseas buying power is up, what's wrong with that?
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bkkfarang1
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Discussion 15 : 21 Mar 2013 at 14.1715
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There's a lot of talk on this forum, that the strength is due to the US printing money, however this argument is flawed, if you look across most currencies the $ is fairly stable, it just shows that Thailand's financial policies are wrong.
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bkkfarang1
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Discussion 14 : 21 Mar 2013 at 14.0514
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The Thai Government is in an invidious position. I remember when the UK tried to join the ERM in Europe. The pound was below the required level, so the government over the next few days tried to get the level right,by supporting the pound, unfortunately there were people like George Soros doing the opposite, and after two days the government had spent £167 for every man, women and child in the UK and we were still below the required level. The Thai government has not got the resources to do this, the problem is that exports and tourism are going to be affected big time, there is a problem round the corner, its not if but when!
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Worzel
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Discussion 13 : 21 Mar 2013 at 13.5113
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We have all read about the 'Currency Wars' well this it, its just not apparent that the monetary policy of other nations is leading to problems through no fault of our own systems.

QE is several years in the making already, there is no quick fix to this.
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Worzel
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Discussion 12 : 21 Mar 2013 at 13.3912
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Until its acknowledged that the probelm is due to other countries money printing programs we can't expect to even assess the issues and the longer term consequences of intervention.

I happen to benefit from the strong baht and in turn why should I care about exporters that previously benefited to my detriment? This is free market econmoics.

Each busness needs to adapt. In 1997 it was 25 to the USD, exporters need to adapt to refelect the prevailing maket and not expect the govt to 'bail' them out through monetary policy.
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joninnak
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Discussion 11 : 21 Mar 2013 at 12.1611
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Imports, especially farang purchases, should be getting cheaper but the opposite is happening. The stores are cashing in.
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jwatch
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Discussion 10 : 21 Mar 2013 at 11.0510
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Let's look on the bright side - if it crashes, great for us people that have savings and want to buy stuff on the cheap.

If it doesn't crash and the bubble keeps inflating, then we all make just that much more bank!
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sibley
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Discussion 9 : 21 Mar 2013 at 09.419
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As I said in one of my previous posts it will all end in tears and who will be to blame no one because Thailand has a no blame culture, I know many people who will not visit Thailand anymore it is getting to be to expensive, people are saying it is not value for money anymore and with the hassle you have with visas it is just not worth the trouble.
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onlyasking
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Discussion 8 : 21 Mar 2013 at 09.338
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There are only three ways the government can attempt to lower the Baht, one is to start printing money like the US and/or to lower interest rates or sell their $. Both the first 2 options may have short term benefits but will have much bigger negatives over the medium term. If BOT sell its $ now they will make a massive loss. Let the market do its job and keep government out of it. If the SET falls with 40% so be it, you should not invest in stocks if you are not prepared to take knocks. The market will correct itself.
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Bank of Thailand and government agree no intervention on hot baht | Bangkok Post: news

BoT says it won't stem soaring baht

Prasarn doesn't see strength as unusual

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