Baht What up with Dat?????

[bumper]

This is the way I understand it, might be accurate might not be. Never accept my views in the end I"m clueless. People like Arjay and Jiimbo who haev finacial experience are more likely to know what is going on then I do.

Never the less here is what I think. The BOT is a very independent section of government. Tarrisa can be replaced, but it is not an easy proceedure. Therefore she really doesn't have to go with the poilitical flow.

I don't agree with her assesment of investors pulling out of Thailand markets to take there money to their home countries to shore things up there. I think they are pulling money trying to find safe heavens and Thailand is currently not considered one. In any event doesn't really matter same effect either way.

Like all other Central Banks inflations is a major concern, growth is secondary. Don't think so look at what the Fed was doing in the past years. There target inflation, until disaster hit. Essentially the were fiddeling away as Rome burned :-"

The BOT may have gotten another way out today more cash injections from the states. In the end she may be very right let the rest of the world pickup the pieces. hang tough and enjoy the benefis.

Or she may have to move in a different direction then the past. If she views that it is a most, but obviuly it is goign to tkae a lot for her to cahnge the approach. May happen may not.

[bumper]

I wouldn't count on that additional 5% just yet.

FINANCE MINISTER
BOT rejects Suchart's ideas
By WICHIT CHAITRONG,
ANOMA SRISUKKASEM
Published on October 21, 2008


The central bank yesterday raised objections to most of the measures proposed by Finance Minister Suchart Thadathamrongvech to steer the economy through troubled waters.


Among ideas floated by Suchart were keeping the baht undervalued by 5 per cent, reinstating the 100-per-cent state guarantee for bank deposits and further delaying new capital-adequacy rules for banks.

The minister is optimistic these steps will help the economy avoid a sharp slowdown next year, when the fallout from the global financial crisis is expected to hit hard.

Bank of Thailand Governor Tarisa Watanagase rejected most of these ideas, reasoning the central bank would keep inflation as the main policy target instead of adopting the exchange-rate target.

"If we want to fix the exchange rate, we must have a target, which would then be a complete departure from present policy. The world is now much smaller; it's hard to fix the value of a currency," she said, adding the baht should move in line with other regional currencies.

The unit has been gradually depreciating lately, due to capital outflows, the same as with other regional units.

She said the way to boost exports was to diversify foreign markets, cut costs or enhance productivity rather than manipulate the exchange rate.

The government should further promote tourism, in order to bring in foreign-currency revenue, because export revenue will likely face a slowdown, she said.

Financial costs here are already cheap, because of the low-interest-rate policy, she said.


However, Suchart said in a speech entitled "The Hamburger Crisis: Oppor-tunity or Risk?" that the Thai economy could be dealt a hard blow by the US crisis, with growth in gross domestic product (GDP) falling below 4 per cent next year.

The export sector, the key engine of growth, accounting for 60 per cent of GDP, is expected to expand only 10 per cent or less next year, down from 25 per cent this year.

"To cope with this economic condition, it is necessary that the baht weaken further, by about 5 per cent [relative to the US dollar], in order to boost exports," he said.

On deposit guarantees, he said the government should continue to provide 100-per-cent coverage for another three years, instead of just one more year as stipulated by law.

The blanket guarantee on bank deposits is due to end next August, when deposit insurance will apply to only Bt100 million per account per bank a year, then drop to Bt50 million and Bt10 million in following years and finally Bt1 million in August 2013.

Tarisa said the country's deposit-protection scheme was sound but that it was up to the Deposit Protection Agency to make any changes.

However, any moves need to be considered carefully for long-term rather than short-term benefits, she said.

Suchart also wants the government to delay implementation of the Basel II banking standard, in order to give more time for local banks to adjust.

But Tarisa said banks had been preparing for Basel II for years and that virtually all were ready to comply with the new rules, which should not hold back loan approvals.

Going ahead with Basel II would help restore confidence, she said.

[bumper]

Ok before the complaining even starts understand it is being done and being done by the people that count not us.

BoT urged to play leading role in addressing economic woes
BANGKOK, Oct 21 (TNA) – The Bank of Thailand (BoT) should adjust to play a leading role in tackling the country's ongoing economic woes, according to former central bank governor M.R. Chatumongkol Sonakul.

Mom Ratchawongse Chatumongkol said the BoT had efficiently implemented monetary policy to supervise the economy, but it could not do that forever. He advised that the bank must adjust its role to more firmly direct the national economy.

For instance, should the inflation rate stay high, it must raise the interest rate to curb it, but if the bank wants to stimulate the economy, it must reduce the interest rate.

How much the interest rate might be reduced depended on the financial system's competence in using financial tools, particularly the interest rate policy.

The former central bank governor conceded that the ongoing political turmoil is complicated and time is needed to cope with it.

He stressed that issuing short-term measures to stimulate the economy must be followed by acceleration of the basic infrastructure development if the government wanted to see the sustainable economic growth.

M.R. Chatumongkol said Thailand would be finally affected by the economic crisis in the United States and Europe.

But the impacts would be small because local financial institutions had little exposure to overseas investment, he added. (TNA)



Business News : Last Update : 09:17:02 21 October 2008 (GMT+7:00)

[bumper]

More presure on the BOT:

FTI chief wants govt to devalue baht to aid exporters

Web www.bangkokpost.com

(BangkokPost.com) - Thailand’s industrial sector demanded the government to watch over the value of Thai baht to increase the competiveness of Thai traders in the global market during the economic downturn.


The financial impediment in the United States has spread to Europe and Japan, forcing Thai exporters to enter vigorous price competitions, according to Federations of Thai Industries (FTI) chairman Santi Vilassakdanont, noting that the impact would last until the first quarter of 2009.


He called on the government to assist the exporters by undervaluing the Thai currency by about five to 10 percent, so they could compete with foreign traders.


Regarding the Ministry of Finance’s plan to extend the unlimited state guarantees on bank deposits from a year to three years, the FTI chief said many countries have applied this measure, and he believed it could restore public confidence.

[bumper]

I think this gives a lot answers as to next year. Never kid yourselfs that the BOT does have control. Unless I'm wrong she has now survived three different government leaders. Her position is to go against the grain on growth. Will she be right maybe, could that the world gets so busy trying to save itself that Thialand can ride the coat tails.

It's a huge risk if she is wrong, it will hit here hard. One area I think she is completly off base on is the Tourist angle. But, I think I understand where the thought comes from. How amy times have you seen Thai people look at us like we have a never ending money supply?

Ever try explaining momney limits to your Thai sweety. They really beleive that. Why by the time we get here either on vacation or to retire, we have put in the hard work to relax. They see money and never see us do a darn thing for it. It is completly wrong. but to them it just falls off trees.

Truth is the country is much more expensive to visit in as little as five years. Secondly the money tree has stopped dropping leaves. There is segment of the world population that will come and fill the five star hotels. But, that segiment can go anywhere not just Thailand. The majority of toursit here are working class people and they will not have the funds to play.

"FINANCE MINISTER
BOT rejects Suchart's ideas
By WICHIT CHAITRONG,
ANOMA SRISUKKASEM
Published on October 21, 2008


The central bank yesterday raised objections to most of the measures proposed by Finance Minister Suchart Thadathamrongvech to steer the economy through troubled waters.


Among ideas floated by Suchart were keeping the baht undervalued by 5 per cent, reinstating the 100-per-cent state guarantee for bank deposits and further delaying new capital-adequacy rules for banks.

The minister is optimistic these steps will help the economy avoid a sharp slowdown next year, when the fallout from the global financial crisis is expected to hit hard.

Bank of Thailand Governor Tarisa Watanagase rejected most of these ideas, reasoning the central bank would keep inflation as the main policy target instead of adopting the exchange-rate target.

"If we want to fix the exchange rate, we must have a target, which would then be a complete departure from present policy. The world is now much smaller; it's hard to fix the value of a currency," she said, adding the baht should move in line with other regional currencies.

The unit has been gradually depreciating lately, due to capital outflows, the same as with other regional units.

She said the way to boost exports was to diversify foreign markets, cut costs or enhance productivity rather than manipulate the exchange rate.

The government should further promote tourism, in order to bring in foreign-currency revenue, because export revenue will likely face a slowdown, she said.

Financial costs here are already cheap, because of the low-interest-rate policy, she said.


However, Suchart said in a speech entitled "The Hamburger Crisis: Oppor-tunity or Risk?" that the Thai economy could be dealt a hard blow by the US crisis, with growth in gross domestic product (GDP) falling below 4 per cent next year.

The export sector, the key engine of growth, accounting for 60 per cent of GDP, is expected to expand only 10 per cent or less next year, down from 25 per cent this year.

"To cope with this economic condition, it is necessary that the baht weaken further, by about 5 per cent [relative to the US dollar], in order to boost exports," he said.

On deposit guarantees, he said the government should continue to provide 100-per-cent coverage for another three years, instead of just one more year as stipulated by law.

The blanket guarantee on bank deposits is due to end next August, when deposit insurance will apply to only Bt100 million per account per bank a year, then drop to Bt50 million and Bt10 million in following years and finally Bt1 million in August 2013.

Tarisa said the country's deposit-protection scheme was sound but that it was up to the Deposit Protection Agency to make any changes.

However, any moves need to be considered carefully for long-term rather than short-term benefits, she said.

Suchart also wants the government to delay implementation of the Basel II banking standard, in order to give more time for local banks to adjust.

But Tarisa said banks had been preparing for Basel II for years and that virtually all were ready to comply with the new rules, which should not hold back loan approvals.

Going ahead with Basel II would help restore confidence, she said."

[aznyron]

git your post is on target yes she is way off the mark and she knows it but she like most women will not admit they are wrong it time Thailand get a new finance minister she is the one who started that crap about strenthing the bot and it cause many thais there JOB because it closed many factories IMO she gambling with the poor thais money who get up every morning to go to a job that only pays them 5k a month she better take a closer look at what she is doing as for tourist it down from what I hear over
40 % world wide so what makes Thailand think it will boom here

[BobHelm]

From front page of Udonmap...

GBP/Baht - 55.16
USD/Baht - 34.10

Looks like the GBP is taking a hammering, again....

[RALPHCUSENS]

From front page of Udonmap...

GBP/Baht - 55.16
USD/Baht - 34.10

Looks like the GBP is taking a hammering, again....

Your not far wrong there Bob, 1.83% overnight!!!!!!!1

[saint]

but why ??? is it the british government , happy to see the pound fall against most currencies , making exports cheaper, [ what exports ] whilst making imports more expensive ? is it the thai government propping up the baht ? or is just the money markets , doing what they do best , making money . i realise our beloved homeland is well and truly in the financial sh~t , but isnt thailand even deeper in the same sh~t ? makes no sense to me whatsoever , i realise im not that bright when it comes to world finance , but from what i see neither are the so called experts !!!! the only differance is we suffer , and they dont . i think thailand will hit the wall very soon , may bhuda help them when they do. cuz the rest of the world dont give a rats arse about this place.

[RALPHCUSENS]

Pound now 54.69Baht

[BobHelm]

Ah I think I have found out why the pound is on the slide - Governor of Bank of England..

http://news.bbc.co.uk/2/hi/business/7682723.stm

Meanwhile, the National Institute of Economic and Social Research says the UK is on the brink of its first full year of recession since 1991.
It says Britain will "suffer the worst setback" of all leading economies.

NIESR said its forecasts assumed that the Bank of England would cut interest rates to 4% early in 2009, although that would probably not be enough to bring inflation below its 2% target before the end of the year.

The NIESR predicted that Britain's economy would shrink by 0.9% in 2009, with consumer spending falling by 3.4%, business investment by 3.8% and private housing investment by 17.1%.

Plus House sales down 59%

http://news.bbc.co.uk/2/hi/business/7681741.stm

Plus manufacturing confidence at a 28 year low (I didn't know we had any)

http://news.bbc.co.uk/2/hi/business/7681569.stm

Not happy reading....

[bumper]

Ok for what it's worth, I happened to run across a farrang today who was here before and during the the last crash in Thailand, he said this is exactly what he saw before it happened. Now I wasn't here so I can't say his evaluation was correct or not.

In that instance there were huge amounts of money made and taken out of the country just before the crash. Taken out by Thai's not farrangs.

Pound and Euro you guys are going through what Americans have for the past few years. Is there logic I've never seen any. This financial mess reached across the world not just the states, it just showed there first.

Just a guess but if you watch the dollar whatever those currencies do against the dollar is going to be reflected in the baht exchange. BOT as I have said the lady appears to have survived three governments now. I don't think she is in much danger until something really big hits.

I don't see any instant relief, all a peson can do now is try to adjust to what are obviously bad time ride it out. It won't stay this way forever. I can't tell yuo how many times i saw guys saying the dollar is trash and it's goign to crash. That been some three years now and so far it hasn't as a matter of fact it making modest gains. Even against the baht I still remeber 32. Things change.

[Nobby]

Hi git
Yes i'm sure your analysis will prevail at some stage ( hopefully sooner rather than later), however it does'nt help when the PM and Chancellor and now the Governor of the Bank of England Harp on about how bad the situation is( Australia has a similar problem). It would be far more benificial if they kept on to us and the world how they intend getting us out of this s**t like most other countries prefer to do.Then and only then will the GBP stand any chance of slowing in it's decline and pehaps start an upward trend

[bumper]

PM and Chancellor and now the Governor of the Bank of England

In that area my friend I have to check to your knowledge I have none.

[arjay]

The pound sterling does seem to be in free fall lately, dropping a full one baht per day.

The quote below is from the BBC Business News website:-

It appears that those who had switched their holdings to the £ and the Euro are now switching back to the Dollar.

As said above it appears that maybe the UK's Chancellor and Governor of the Bank of England are being a bit too open and honest about the UK being in recession and the gloomy outlook! (I'm surprised Izzix didn't pick up on this - "gloom and doom" !! )

Pound tumbles to a five-year low

Currency investors are switching back to the US dollar

The pound has tumbled almost 3% against the US dollar - falling to its lowest level in five years on recession fears.

Sterling's fall came after the Bank of England governor, Mervyn individual, warned that Britain was probably entering its first recession in 16 years.

The pound dropped to $1.620 in Asian trading, its lowest since September 2003. It later recovered to $1.6255.

The euro fell 2% to hit a two-year low against the dollar - which has itself been rising against other currencies.

The euro slid to a low of $1.2743 at one point, before recovering slightly to stand at $1.2831.

Rising dollar

The dollar has jumped to a two-year high against a basket of currencies as investors have bet that interest rates outside the US will be cut sharply to try to bolster global growth.

Concerns there may be a deep slowdown in the world economy have prompted investors to cash in more of their bets against the US dollar which had built up in recent years.

At one point this year these bets had sent the euro to a record high above $1.60.

Currency traders said a wide range of players from hedge funds to Japanese institutional investors were now rushing to cancel their positions and cut their losses.

[bumper]

Well I will say it again I feel for you guys been there done that no fun.

[arjay]

I've just spotted this one too, which suggest that UK interest rates will reduce further in November, another reason why people will move out of the pound.

Bank voted 9-0 to cut UK's rates
Bank members voted unanimously to cut rates

All members of the Bank of England's rate-setting committee voted for this month's half-point emergency cut in rates to 4.5%, its minutes show.

The monetary policy committee said the stock market turmoil and latest economic figures pointed to a sharp downturn in the UK economy.

"All these developments pointed to the need for a relaxation in monetary policy," said the bank.

Most analysts expect the central bank to cut rates again in November,

Governor Mervyn individual briefed the other eight policymakers about the discussions of a co-ordinated move with other central banks, including the US Federal Reserve and European Central Bank, and then invited them to decide on whether to join the action.

[Nobby]

I recall very the speech made by Gordon Brown in his early days as Chancellor when he said at the Mansion House venue and i quote " there will be no boom and bust with this government". The fact that he encouraged the banks to lend silly amounts and at silly rates. These irresponsible policies that both the UK and US sort to adopt have been a major player in leeding the world into resession (some faster than others)and lets be honest, no country is going to escape the effects( although Thailand and in particular BOT seem to think they are safe). I will now gracefully retire from the subject, well for now anyway.

[bumper]

Interestingly enouhg they did an interview with the Rubber farmers and there association on the Thai news this evening. The bottom has already fell out for them. Price reduction of 50% in one month.

Several were saying they had already sold plots of land and laid off hundreds of workers.

They said 85% of their product is exported to the US and China. They are looking for government help.

Othe then the government just giving them money I don't what the government could do for them. If the cars are not produced the demand is not there.

The other thing I noticed was Thailand suggesting to the Asian countries that thye create a 350 billion dollar reserve in the region. That is a lot of money. Is there something out there that we simply don't know about? Or is Thailand simply practcing good business judgement. I simply don't know.

All the talk as to Thailands ability to ride this has really been speaking of the banks, not the entire economy.

This is a very complicated issue and it will effect what you get at a ATM.

Maybe Arjay is right the UK was to open, Maybe Thailand is playing it's cards closer to the chest.

I don't think we have really seen panic here yet, but I believe we will.

[valiant]

Some advise please I am coming to Udon in 9 weeks would I be recommended to bring US Dollars or British Pounds?
Thanks