Baht What up with Dat?????

[wazza]

In 1997 it was the entire Thai economy that suffered accross the board. Therefore the BOT implemented fiscal policy to correct the collapse and stimulate growth etc. Oil prices were stable on the global market, as in they did not trigger the collapse of the Asian Tiger so to speak.

It was an Asian Collapse.

Oil prices in 2008 were a global issue and affected all countries that relied in oil imports eg Thailand,

When the price of oil per barrel went up, so did the price at the pump, like wise when it dropped so did the pump price. Thats a world issue.

Remember that oil is bought on hedged prices, so sometimes the price creep is not seen at the pump directly as these may be prices that were bought 1-2 months before. Like wise as the PPB drops, the next 1-2 months of imports will still be at eg $150 USD PPB, so they only reduce the pump prices then , it can depend on how far they hedge the purchase prices.

[bumper]

Ya I remember those day nice huh?

Of course cola has given me 24% more compounded since then, now that didn't hurt :-"

34.71 Bank of Bangkok today.

Welcome back Jimbo.

Me what goes in the wallet counts

It would be interesting waht they real losses or gain would be, IE cost of Living factored in along with pay raises.

Now this is dusting off the brian bucket but it seems to me I actually go more with 41 baht in 2001 then I do today.

You see I have this theory scarey Huh

Number are just numbers purchasing power is what really counts. I think we are on the losing end of that scale for sure. Although prices are starting to drop, like fuel and such. The party stuff don't know . Maybe you young whipper snappers can supply that info.

Anyone noticed the proposed sales tax increases in California, hey the money has got to come from somewhere. IOU's for state Tax refunds interesting huh. The feds want to tax increases on fuel.

I remember at one time in my career, the Caifornia Highway patrol, didn't get a few paychecks and the were paid monthly Ouch.

Wonder what we will see here. Even government programs here are not really free, they have to be paid for somehow.

[bumper]

Well one of the questions I posted ha been answered at least in this instance, the shirt color will be orange, the worst scenario in my humble opinnion.

Protesters cross swords
By THE NATION ON SUNDAY
Published on January 4, 2009



Thaksin backers see red as Democrat MP Somkiat visits northern province
Pro and anti-Thaksin supporters nearly clashed yesterday in Lampang after Democrat MP and PAD co-leader Somkiat Pongpaiboon paid a visit to the province to meet his supporters.

About 150 police were quickly deployed at a local shopping mall in Lampang where the meeting took place with both sides engaging in heated verbal exchanges and finger-pointing. Many local shopkeepers closed their shops.


Somkiat was forced to delay going to the meeting place at Seri shopping mall in Lampang due to safety concerns after nearly 100 red-shirts marched there after learning through two local community radios that Somkiat was coming to town.


The red-shirt crowd managed to break through the barricade but was prevented by the police from physically clashing with the yellow-shirt People's Alliance for Democracy (PAD) supporters.


The red-shirts shouted: "Take back your Democrat Party and return us Thaksin!" They also used their foot-clappers to show their dissatisfaction with Somkiat, the PAD and the ruling Democrat Party.


Somkiat later told the press that it was his first visit to Lampang and the objective was to meet and exchange views with PAD supporters. He also planned to visit PAD supporters in Tak province's Mae Sot district. The Democrat MP come PAD co-leader soon left driving a white car with no licence plate.


Meanwhile in Chiang Mai a group of red-shirts calling itself "Lovers of Chiang Mai 2008" declared a new era of anti-Democrat government protests. More than 100 of its members surrounded the Royal Lanna Hotel, where a senior Democrat was staying.


A small convoy, led by a truck mounted with loud speakers followed by some tuk-tuks and other small four-wheel taxis, went to the downtown hotel. The group was led by Kanyarat Maneejak.


Labour Minister Paitoon Kaewthong, who is also a senior Democrat and a member of the party's advisory council, was staying there to help a Democrat candidate, Kayan Vipromchai, to run in the upcoming snap election in Lampang.


Some 20 police officers were mobilised and barricades were set up in front of the hotel. The pro-Thaksin red-shirt group later learnt that Paitoon had checked out earlier so they eventually left without any incident.


The group leaders later told the locals that a new era of anti-government protests had begun. They said any Democrat Party member and PAD members will be chased away from Chiang Mai if they ever show up. Their announcement was also broadcast by a local community radio, FM 92.5.

[JimboPSM]

An interesting (and more realistic than usual) article on the major exporting sectors from The Nation:

Exports projected to see steep decline in 2009

By Petchanet Pratruangkrai
The Nation
Published on January 5, 2009

Worldwide recession bodes ill for the Kingdom's strongest engine of growth

The world's economic meltdown will turn Thailand's exports from a bullish 2008 into a bearish 2009 as most industries foresee a gloomy aspect with their exports.

Thai exporters will face many negative export factors this year through the global economic recession. Both the US financial crisis and the world's economic recession will directly hit Thailand's trading partners, in particular traditional markets including the United States, the European Union and Japan, which are now entering recession.

Also, the global financial crisis has prompted commercial banks to be very careful about approving credit lines to traders.

Despite having a new government, the political turmoil has not settled. In addition, the closure of the airports last year damaged confidence in Thai exports.

According to the World Bank, the global economy will grow by only 1 per cent in 2009 instead of the 2.6 per cent forecast. Economies in the Organisation of Economic Cooperation and Development (OECD) countries will drop by 0.2 per cent rather than increase by 3.2 per cent, while non-OECD countries are projected to grow by 3.2 per cent in 2009 from 4.6 per cent expansion in 2008.

The International Monetary Fund says Thai exports to the US, the EU and Japan, which account for 34 per cent of Thailand's export value, in 2009 will decline in value by 0.7, 0.5 and 0.2 per cent respectively.

However, there are some positive factors to compensate for shrinking exports, including the possible depreciation of the baht, continued economic growth in new target markets like Eastern Europe, the Middle East and countries in Asia, and lower oil prices, which have lightened production and logistics costs. Yet nobody knows when oil will climb again following higher demand in Western countries, China and India.

Slowing export growth affects not only each industry but also the Kingdom's economy as a whole as exports account for more than 65 per cent of the country's GDP. Sluggish exports can cause companies to shut down operations and will lead to lay-offs.

A survey by The Nation of each export sector regrettably comes to the conclusion that there will be no sunrise industries in 2009, but only fast and slow "sunset" industries.

The best possible result each sector can expect is that it will expand by a few percentage points. Most companies will see flat export performance, and some will see exports drop.

Rice

Despite ranking among the country's top seven export products and robust growth in 2008, Thai rice exports are forecast to drop 15 per cent in volume to only 8.5 million tonnes in 2009. Rice export value is expected to drop by 20 per cent from 2008's value following lower agricultural-goods prices.

The rice price is likely to drop as higher supply and the high cost of rice under the Somchai government's intervention programme created difficulties for Thai rice exports.

World rice trade is forecast to drop by 2.81 per cent in 2009 from 29.07 million tonnes to 28.25 million tonnes due to high stockpiles.

Thai Rice Exporters Association president Chookiat Ophaswongse said that many rice-exporters would "take a long vacation" in 2009 due to low purchasing orders. The high cost of Thai rice will also create difficulty for Thai rice exports as many rivals like Vietnam and India have lower prices.

Processed and frozen foods

The sector seems to face the minimum impact from the world's economic crisis due to being essential goods. However, the sector is also expected to see zero growth in 2009 due to high export value in 2008, which is expected to reach Bt670 billion.

Poj Aramwattananont, president of the Thai Frozen Foods Association, said that due to the world crisis, consumers would lower consumption. Product value is also expected to drop in 2009 as consumers buy lower-priced goods.

The market will continue to impose higher standards for food safety, which will increase costs for Thai manufacturers.

Garments and textiles

This sector, which has about one million jobs, is expected to see sluggish growth of zero to 5 per cent, the worst figure in a decade.

Normally, exports from the sector are expected to grow by 10 per cent a year. But even though the industry is affected by the financial crisis, the sector is forecast to come in with 9- to 10-per-cent export growth for 2008 to $7.6 billion.

Vallop Vitanakorn, vice president of the Thai Garment Manufacturers Association, said: "Under the best-case scenario, exports will grow by only 5 per cent, while in the worst case we could see zero growth in 2009."

Some small and medium-sized manufacturers may have to close down. However, large enterprises that have adjusted to producing brand-name products and high-quality goods to serve the high-end market will enjoy good purchasing orders.

The sector is not expected to have to lay off workers, because there is still strong demand for sportswear, children's wear and underwear thanks to the Kingdom's reputation for quality goods.

Electronics, electronic parts and electrical appliances

The world's economic meltdown will bring down demand for durable goods in all markets.

Katiya Greigarn, chairman of the Federation of Thai Industries Electrical, Electronics and Allied Industries Club, said that exports in the sector were expected to see flat growth in 2009 from last year's 6-7 per cent expansion to Bt1.6 trillion export value.

"The 'hamburger crisis' has lowered buyers' confidence. Exports to all markets, including the US, the EU, China and Asean, will face sluggish expansion in 2009," he said.

Hard-disk drives and integrated circuits will also experience a drop in export growth due to investment shifts to other countries, such as Taiwan.

Automobiles and auto parts

Following the slowdowns in the US and EU car industries, Thailand's automobile and parts exports are forecast to plunge dramatically by 5-20 per cent in 2009, from an increase of 12 per cent to between Bt500 billion and Bt550 billion in 2008.

Paiboon Poocharoen, honorary chairman of the Automotive Industry Club of the Federation of Thai Industries, said: "It will be a tough year for exports, as most of our traditional markets, including Australia, Africa, Asia and the EU, will have low capacity for imports. Exports to the Middle East will also see slow growth in 2009 due to the decreasing oil price."

Gems and jewellery

This industry's export income grew 46.4 per cent to US$7.2 billion (Bt252 billion) in the first 11 months of 2008. However, exports started to show slowing growth in December, a trend that is likely to continue through the first half of 2009 due to the world's economic meltdown.

"Due to the widespread economic crisis, we are very worried about sluggishness this year," said Vichai Assarasakorn, president of the Thai Gems and Jewellery Traders Association, adding that the best outcome for 2009 would be to maintain export value the same as in 2008.

Exporters are facing two troubles: lower demand from consumers and problems of financial liquidity. However, Vichai is optimistic that exports from the sector may increase in the second half of 2009 if the US economy is recovering.

Furniture

Thai furniture-makers will continue to suffer from tough competition and the US financial crisis, said Jirawat Tangkijngamwong, secretary-general of the Federation of Thai Industries' Furniture Industry Club.

Exports in 2009 are expected to see flat growth, as they did in 2008. Furniture exports dropped slightly (by 2.3 per cent) to $1.16 billion in the first 11 months of 2008, while it was earlier estimated that export could grow by 3 per cent.

To strengthen their export competitiveness, manufacturers are adjusting themselves to produce brand-name products and superior design. Producers in the sector are also trying to penetrate new markets, including India, Russia, Australia, the Middle East and Eastern Europe to offset export drops in traditional markets.

Due to the slump in export growth, alien and unskilled labourers will be the first groups to be laid off. Some small and medium-sized producers who rely too much on made-to-order contracts will also shut down.

Toys

Like many other groups, toy-makers are expected to face flat export growth in 2009 because of sluggish demand in the US, Thailand's major export market, said Thai Toy Industry Association president Duangjai Koosrivinij.

However, amid the crisis, there is an opportunity for Thailand because its main rival in the field, China, faces problems of product safety.

The recall of toys from China was one factor leading to the Thai industry's exports expansion of 20.5 per cent to $233 million in the first 11 months of 2008. However, export orders started to drop as the financial crisis deepened, and at the end of the year exports had increased by only 17-18 per cent.

[aznyron]

while at the N/M meet the conversation drifted over to the thai baht now I was told that as of today Monday the thai bank will cease in propping up the baht and let it float now if that is true it music to my ears because thailand GNP is not very good so the baht should weaken quite a bit it sure would be a dream land if we saw 40 to 1 again so if any one has some good news please post it I need it to calm me down

[bumper]

Really floating the baht, don't know if it will happen today. But, I'm confident eventually they won't have any choice.

Very comprehensive article Jimbo, first time I have seen it all put in report.

I noticed that Toyota put the planned engine manufactoring plant here on hold.

Well we are only five days into the year, so not much to follow, but at this point I don't see much change especially in the political arena.

[lepidoptra]

Dream ON the Baht got stronger at opening today. happy new year

[aznyron]

Dream ON the Baht got stronger at opening today. happy new year

I don't know were you got that info but the baht was 34.41 all week end now it 34.43 slight gain for us
BKK report front page udon map

[lepidoptra]

Aznyron
Excuse the confusion, it was stronger against UK pound (my currency) slightly weaker against the US dollar

[jepp]

Greetings, Like everyone I would like more 'Cluck' for my Buck, so I did a little technical(?) research. Full text is at
http://www2.bot.or.th/statistics/MetaDa ... S3_ENG.PDF
But it States in part:-
During November 1984 – June 1997, Thailand adapted a fixed exchange rate
regime based upon a fixed reference basket of currencies.
3.1 Managed float (a.k.a. dirty float), this regime is adopted by most
countries, including Thailand
Since 2 July 1997, Thailand has adopted a managed-float exchange rate
regime, in which the value of the baht is determined by market demand
and supply in both on-shore and off-shore foreign exchange markets, to let
the currency moves in line with economic fundamentals. The Bank of
Thailand will intervene in the market only when it deems necessary, in
order to prevent excessive volatilities and achieve economic policy targets.
Regards Geoff

[JimboPSM]

Compared to the closing rate on 30th December early trading is showing:

• USD is up 0.04% against THB
  GBP is down 0.08% against THB
  EUR is down 1.00% against THB
  AUD is up 1.39% against THB

Market volumes (currencies & stocks) always tend to be pretty thin in the first week of the year so no great reliance should be given to any direction that they show.

The first scheduled opportunity for the Monetary Policy Committee of the BoT to affect exchange rates by adjusting interest rates is Wednesday 14th January.

[747man]

Maybe they will Devalue The Baht,Then ?? Me Thinks NOT !!!

[laphanphon]

little satang here, little satang there.....................

you're killing me. unless it moves a baht or 2 up in one day, it's irrelevant to the grand scheme of things. less than a baht back and forth in a month not worth the braincells. keep it near 35 or up, and i'm satisfied. below 30, could be depressing.

though all waiting and anticipating a self destruct, really can't see it happening, as the rest of the currencies are in crash mode also, and the fun hasn't even started yet. since holidays are over, think i'll give the budget and my liver a break.

for those that may be having a budget problem, it really does help to know where it goes, if only one month a year, keep track of finances and what they are actually being spent on. i do it once in a while for a whole month, out of curiosity and i like numbers . see where the exchange and inflation has taken my budget. hopefully, staying under 35 K a month. that's a family of 3, dining half in/out, thai/western. only monthly bills, rent/5000, soon to go down, and electric/less than 2000.

happy finances to all in 2009.

ERHE.OB............your own due diligence.............only what you can risk to lose.........AND..
if you have to ask, don't even think about it. :frying pan: :frying pan: :frying pan: :frying pan: :guinness: :guinness:

[JimboPSM]

Although there has been “talk” of devaluing the THB it is highly unlikely that the kind of “one off” devaluation that used to be made would actually be done as it would be substantially in breach of current BoT policy – some Brits might remember when Harold Wilson devalued the pound and made the infamous “pound in your pocket” speech trying to claim it wouldn’t affect them.

It is more probable that the THB would be "devalued" by using conventional market forces, this might be achieved by such measures as:

• 1. Reducing interest rates.
  
  2. Reducing or eliminating the use of foreign currency reserves to support the THB in the Forex markets (which, in my opinion, has been a total waste of the hard earned foreign currency reserves).
  
  3. Carefully worded comments to shift market sentiment by the BoT, Finance Ministry, Government Ministers and credible financial commentators (I don’t think that will include us).

It should be remembered that devaluation is not a one way street and while it may help many expats, there are people and businesses that would be hurt if a devaluation did occur.

[arjay]

I believe the BOT will reduce their interest rates at their next meeting this month, as they will want to try and offset the affects of the recession on Thailand, and I think they would probably be comfortable with some weakening of the baht...

... But the problem for many of us is what is happening in the UK and USA with interest rates there, which are much lower than Thailand, and the Uk's interest rates are anticipated to be reduced again next week. That's what is keeping the pound sterling weak against the baht, or the baht strong against the pound, whichever way round you want to look at it!

[aznyron]

good morning well today bkk rates are 34.70 and GBP over 50 good signs for us maybe the continued downfall of the baht will continue for a long time before it hit bottom like 100 for gbp & 70 for the usd

[JimboPSM]

An interesting article from "The Nation" about the possibility of a zero interest rate from the BoT.

Is a zero interest rate possible here?

By Thanong Khanthong
The Nation
Published on January 7, 2009

As the US and other industrialised nations' interest rates have followed the Japanese example and approached zero, local analysts have questioned whether there is a possibility the Thai rate will also fall to this level.

The stock market's 6.4-per-cent rally on Monday reflected speculation that the Thai authorities might have little choice but to reflate the economy through further monetary easing, apart from the fiscal-expansion programme. Thai shares, however, closed 1.16 per cent lower yesterday at 473.15 points on heavy selling of big-cap stocks for short-term profit.

"The market is expecting a weak and volatile 2009 for the world, Thailand included, so can the interest rate in Thailand go down to zero? Bank of Thailand Governor Tarisa Watanagase has already said it is a possibility," ABN Amro Bank said in a report issued yesterday.

"The Bank of Thailand will be meeting next week to decide on the one-day repurchase rate, and we can expect anything up to a further 50-basis-points cut from the current 2.75 per cent."

Tarisa has been cautious in her comments on the interest-rate trend, as she does not want to be seen as being too rushed in bringing rates down - at least until the central bank has little ammunition left if the situation turns out to be really bad.

She recently said it all depended on economic conditions.

"If interest rates were to come down to zero, the central bank would have fewer tools left. Monetary policy could become ineffective, as happened to Japan," Tarisa said.

Seamico Securities said in a report yesterday that after Monday's Stock Exchange of Thailand rally, there was momentum for the SET to surge further, due mainly to the expectation of a continued lowering of the policy rate. However, the market would be more volatile, as investors would take a profit following the rally, it said.

The SET Index is moving towards the average 25-week resistance level of 480-490 points. Seamico believes the index will not surpass this resistance in its first test. Investors are expected to sell for profit and buy back again when the SET hovers between 450 and 460 points.

"Headline inflation in December was the lowest in six years, paving the way for a lower interest rate," Seamico said in its paper.

The SET Index had one of its worst years on record in 2008, plummeting nearly 48 per cent after being hit by the US sub-prime crisis and the global economic downturn. Domestic political infighting ravaged investor sentiment throughout the year.

The SCBS Data Book issued yesterday said the index closed the year at 449 points, with retail investors net buyers to the tune of Bt116 billion, foreign investors with a net selling position of Bt162 billion and local institutions as net buyers of Bt46 billion over the year.

"Late December, the market was optimistic, as new Prime Minister Abhisit Vejjajiva successfully delivered his policy address to Parliament despite protests, and fund managers bought stocks for year-end tax rebates," it said.

The SET closed 2008 with a price-to-earnings ratio of 7, down sharply from 17 at the end of 2007. The market is trading at below book value, at 0.98, versus 2.02 at the end of 2007.

In general I agree with the comments by the Governor about going down to a zero rate but would also add that current experience (in the UK & US) has shown that, without any mandatory requirement to pass the cuts on, the commercial banks have mainly been using the "cuts" as an opportunity to increase their profits by screwing their customers even further by reducing savings rates while leaving borrowing rates unchanged - having caused a large part of the present financial problems in the world it is good to see that our banks continue to put their own profits before the interests of their customers and their countries.

An alternative view might be that by (effectively) racketeering in the present credit climate they are shooting themselves in the foot by helping to make a really good case for why they should be nationalised.

[JimboPSM]

A pretty realistic article from BoT website by Mr Akkharaphol Chabchitrchaidol (senior economist in the BoT Monetary Policy Department).

Urgent Action Vital to Cope with Human Face of Crisis

Akkharaphol Chabchitrchaidol

A resounding thump seems to have taken the place of any holiday cheer this year. Rich countries are collectively expected to face the deepest recession since the Second World War. Emerging markets, whose financial systems so far have remained relatively unscathed, are unlikely to be so lucky with their real economies.

Conditions are deteriorating very quickly as a result of the sharp slowdown in demand from rich countries. In the case of Thailand, the impact will be especially hard, given that the extended political crisis at home over the past few years has dampened domestic demand, making exports the main driver of growth.

But with worsening prospects for exports throughout the region – Thailand’s export growth contracted by -18.6% in November – this last hope for growth seems likely to fade quickly.

Monetary policy is a relatively blunt instrument in this situation. The Bank of Thailand’s historic 1% reduction in the policy interest rate to 2.75% at the MPC’s December meeting helped to lower firms’ cost burdens somewhat. But as firms face worsening demand prospects – everyday brings news of declines in export orders going forward – firms are likely to cut down on labour costs.

The relatively low October unemployment data from the National Statistics Office, which registered at 1.2%, coupled with the persistence in economic weakness, indicated that the labour markets have so far remained flexible, with unemployed workers reentering the labour force with relative ease. However, the headline unemployment data masked a more worrying trend by employers – who tend to cut costs by first reducing overtime and bonus payments – before actually laying off workers, beginning with migrant and low-skilled employees, followed by higher-skilled employees.

This trend hides the fact that employees’ incomes may have in reality fallen substantially – particularly for low income workers – where overtime pay can account for up to half of their monthly income. In addition, the shift of labour from the manufacturing sector to the agricultural or services sector may actually entail a significant decline in income, which is not reflected in the unemployment numbers. These changes are likely to be reflected in weaker purchasing power and lower consumption, further depressing domestic demand.

Going forward, with expectations of both a continued drop in export orders and weak domestic demand, a coordinated response by monetary and fiscal authorities is required to support the economy. In the absence of inflationary pressures, monetary policy can alleviate the financial burden of firms. At the same time, any fiscal stimulus should be targeted directly at those affected sectors. The government’s planned 180 billion baht public spending package, which is intended to be used to create new job prospects, can play an important part in supporting employment. At the same time, measures to help the cost of living of low income groups should also continue to support the economy. In order for these measures to be effective, the government needs to ensure that this spending is disbursed as quickly and efficiently as possible.

The proposed stimulus package of THB 180 billion is approximately USD 5.1 billion or GBP 3.5 billion at current rates.

[JimboPSM]

Edited for the THB content - from Bloomberg Asian Currencies report:

Jan. 6 (Bloomberg) -- Thailand’s baht and the Malaysian ringgit fell to three-week lows on concern deepening recessions in the world’s major economies will sap demand for regional assets.

The baht, which dropped 15 percent last year, the most since 1997, extended losses after Prime Minister Abhisit Vejjajiva said the central bank expects the economy to grow between 0.5 percent and 2.5 percent in 2009, the least since 1998. The ringgit declined for a third day against the dollar on speculation the escalating war between Israel and Hamas, and rising oil prices, will increase demand for the U.S. currency.

“The market reflects demand for safe-haven assets due to the prolonged crisis, and to a smaller extent, the weak economic data,” said Tan Voon Ching, a currency trader at OSK Investment Bank Bhd. in Kuala Lumpur.

The baht dropped 0.5 percent to 35.10 per dollar, the weakest since Dec. 12, before trading at 35.06 as of 3:40 p.m. in Bangkok, according to data compiled by Bloomberg. The ringgit weakened 0.4 percent to 3.5110 in Kuala Lumpur. It earlier reached 3.5182, the lowest since Dec. 18.

Thailand’s Finance Minister Korn Chatikavanij yesterday said the benchmark interest rate may be reduced further.

The Bank of Thailand will continue “easing monetary policy” and will work closely with the government to stimulate economic growth, Prime Minister Abhisit said yesterday.

Policy Easing

The central bank last month cut its one-day bond repurchase rate by one percentage point to 2.75 percent. Thai policy makers next meet Jan. 14 to decide on borrowing costs.

The nation’s inflation slowed to a six-year low in December. Consumer prices increased 0.4 percent from a year earlier, after rising 2.2 percent in November, the Commerce Ministry said. Exports in November shrank 18 percent from a year earlier, the first contraction since March 2002, official figures show.

“The issue is whether there will be any policy paralysis,” said Emmanuel Ng, a currency strategist at Oversea- Chinese Banking Corp. in Singapore. “The prescription would be for rapid action from the government and monetary authorities. Slowing growth is weighing on the currency. The inherent risk is for further dollar upside.”

The baht will trade between 34.50 and 35.30 this month, Ng said ...............

[aznyron]

I have heard that it would be 37 by mid year A friend of mine read it in BKK post last night
I guess if you search the articles you might find it and post it honestly that music to my ears