Baht What up with Dat?????

[RALPHCUSENS]

There are always going to be ups and downs in all of the world economies. One has to just build in that mindset to their financial planning. Economies have never, ever continued to just go up, up, up without some pullback and repositioning or a downward spike occasionally. One can wish all they want and curse the gods of the economy until blue, but the rises and falls have always been there and will continue.

Since the dollar has been down for so long, it was bound to rise a bit. With the pound up for so long at peak levels, it was bound to dip. Plan accordingly and remember that nothing lasts forever.

yES, BASICALLY AGREE, BUT, THE POUND IS NOW AT A 12 YEAR LOW AGAINST THE DOLLAR, AND A 15 YEAR LOW AGAINST THE BAHT

[bumper]

LA is right ten year cycles a a rule. States go hit first so more then likley the first to go up. The baht is struggling at the moment. Got a lo goign against it. They are trying to keep it's value high but it might be a losing battle time will tell.

[bumper]

What would thnis mean as to the baht exchange rate?

Central bank considers switch in policy to focus on core inflation
By Anoma Srisukkasem
The Nation
Published on September 5, 2008


The Bank of Thailand (BOT) is considering changing its moneฌtary policy to target core inflation instead of headline inflation, says Governor Tarisa Watanagase.


Any such move would be a result of oil and commodity prices increasingly and significantly influencing inflation.


"Headline and core inflation have moved in the same direcฌtion, albeit incoherently," said the governor.


The central bank will consider whether to replace core inflaฌtion alone with headline or core inflation plus some food and energy prices, said Amara Sriphayak, a senior director at the BOT.


She said a BOT study found that while inflation had become more persistent and prolonged, oil and agricultural prices had fluctuated.


"We need to take headline inflation more into account, although we do consider it to a certain extent now," said Amara.


Any revision of the monetary target would be made after new members of Monetary Policy Committee (MPC) took office. The central bank must also reach an agreement with the Finance Ministry.


Amid concerns the new MPC members may not be appointฌed in time, what with the next meeting to be held late next month, Tarisa expressed confidence they would take office on schedule.


"The new committee will be informed about the working process at the first meeting and revise the policy target in subฌsequent meetings. I do not want the MPC to become a vacuฌum," said Tarisa.


The BOT adopted core inflation as its monetarypolicy target in May 2000, when MR Chatumongkol Sonakul was governor.


A target range of zero to 3.5 per cent was embraced, as that could weather temporary economic shocks.


At the time, the BOT considered headline inflation to be too volatile to serve as the policy target, because it would put pressure on the central bank to adjust policy interest rate freฌquently.


However, continued rises in oil and commodity prices are expected to be prolonged, contributing to permanent shocks.


Amara said the study found the BOT did not need to react to headline inflation often but should consider factors related to price changes instead.


After the 1997 economic crisis, the Kingdom adopted moneฌtary targeting, in accordance with the International Monetary Fund's economic programme, before shifting to inflation targetฌing.


Piyasvasti Amranand, chairman of an advisory committee for Kasikornbank executive officers, proposed that the new MPC survey public opinion regarding the inflationtargeting frameฌwork, in order to foster transparency and benefit the country in the long run.


He also said the new BOT board should have impeccable qualifications, in order to boost the credibility of monetarypoliฌcy management. The spirit of the BOT Act should be considฌered rather than its lettering.


"Setting an inflationtarget range should be wide open to public scrutiny instead of known only to the government and the central bank. The independence of the policy is most important for the longterm economy," he said.

[aznyron]

so what this all about more smoke & mirrors the bot is weak always was weak they are just trying to
keep it prop up IMO they love Buying USD and now the Brit pound is going through some tough times so they will buy them are a cheap rate and those wealthy people are just getting wealthier on the backs of the thai people they forget it cause factory closing and tourism to be affected just plain selfishness and we are stuck also in that exchange rate

[JimboPSM]

What would thnis mean as to the baht exchange rate?

Central bank considers switch in policy to focus on core inflation
By Anoma Srisukkasem
The Nation
Published on September 5, 2008

The Bank of Thailand (BOT) is considering changing its moneฌtary policy to target core inflation instead of headline inflation..........

I had to read this a couple of times and then went to check the article - who needs smoke and mirrors when things get so completely lost or turned on their heads in translation - the current policy is targetting core inflation.

My interpretation is that they are considering whether to modify the existing policy to take account of big changes in energy and food prices (the main elements ignored by "Core" that "Headline" includes).

Such a policy would increase short term exchange rate volatility because of the likely increased frequency of interest rate changes (unless they can find some other weapon to fight inflation) - if the policy did work (and with all things being equal) over the longer term the THB would strengthen against other currencies as the THB would not be impacted as greatly by inflation.

[bumper]

Thanks Jimbo, my bet they want to look like they are doing something these days. Might be good for the employment status.

[saint]

i don't do politics as such , but briefly looking at the SO yesterday , investors are not panicking yet , but the future aint rosie !!!! i also watched pig face ranting on and on about how hes right and everyone else is wrong , to use a hampshire saying , the mans a complete dinlo ... one thing is for sure , hes no diplomat. is this the face thailand wants to portray to the rest of the world ???? moderators delete if deemed necessary

[bumper]

Bloomberg today

The Thai baht weakened 1 percent to 34.59 in Bangkok, with yesterday's loss at 0.5 percent.

Interstingly enough I didn't see a loss at all but a gain from yesterday. Yesterday it was 33.67. It dopped 24 satang first thing this morning.

The article showed that the other currencies in the region have dropped by nearly 2% or more. The Euro dropped. The Pound dropped. Just what is the basket of currencies are they matching.

The were sellign dollars like mad today. It's obvo ious that the traget is 34.50 at the moment and what that basket of currencies are doing has nothing to do with it. What I can't see is what is the advantage to Thailand?

[bumper]

You know I just noticed this thread has been going for two years now, lot of history in it

Bloomberg today:

The Thai baht headed for its eighth weekly decline on concerns that the political impasse will drag on, deterring overseas investors.

The currency dropped to its lowest level in more than a year before lawmakers choose a new prime minister today, with the biggest party vowing to return Samak Sundaravej to office after he was ordered to step down by a court this week for accepting payments to host a cooking show.

``The political situation has passed a point of easy resolution,'' said Richard Yetsenga, a currency strategist at HSBC Holdings Plc in Hong Kong. ``Dollar-baht will continue to grind higher.''

It's slipped back a bit from this morning, but not much. Lots of turmoil to go. We may see 35 this month, that been a long tiem since we have seen that.

[JimboPSM]

On Friday the USD ran into buffers in the European and US markets ending up with a fall of between 1.5% and 2.0% on the day; much of this actually happened after the markets closed in Thailand.

As recently there has been intervention to minimise the fall of the THB against the USD, it will now be very interesting to see whether there is a similar action to minimise a potential rise of the THB against the USD when the Thai currency markets open on Monday.

With regard to the large movement on Friday - although in normal circumstnces the movement would seem pretty major, it needs to be put into the context of the rises that the USD has actually had recently (e.g. in the last four weeks, some 6% against both the GBP & EUR).

[bumper]

Personally I thought that was to fast and something had to correct. The only thing I have to measure by was the baht it moved a long way but in stages. But we we still hav two weeks and we may see 35 this month. My guess is the will stay true to form and it will gain. But it seems like the target right now is 34.50

[JimboPSM]

Interesting opening this morning, compared to Friday close:

• USD/THB - fall of 0.46%
  
  USD/GBP - fall of 1.57%
  
  USD/EUR - fall of 1.52%
  
  USD/AUD - fall of 1.39%

Looking at the above (disregarding any other factors) with a fall of approximately only a third of that compared to GBP, EUR & AUD it would be difficult not to conclude that the USD is actually being supported in Thailand

[bumper]

I was very surprised not to see the Bhat strengthen even more.

But the day isn't over is it

Seem everything is reponding to Leahmans. See conflicting stories on that one, B of A doing a take over.

Then I see stories say they are no, so who know.

I think it's all up in the air today.

Have to wait for it to land. Which maybe why we didn't see a big cahnge in the Baht maybe they are waiting to see if they need to act or not.

[JimboPSM]

....... But the day isn't over is it

........... maybe why we didn't see a big cahnge in the Baht maybe they are waiting to see if they need to act or not.

Very true!

It’s hard to believe but Bear Sterns, Fannie & Freddie have become old news as a couple more coaches joined the economic train wreck; we now have (allegedly) Merrill Lynch in a fire sale to Bank of America and Lehman Brothers preparing to file for bankruptcy following the failure of its fire sale.

It is not likely that real news, as opposed to the current raft of speculation (including mine), will be in the market place before the Thai markets close for the day - so we will have to just wait and see what comes out in the wash over the coming days.

[bumper]

Thanks Jimbo I had it backwards as usual

Well we have a ways to go definetly going to be more causualties everywhere.

But it's hard for me to believe that this wasn't expected. At some point the Feds have to stop the bail outs and let the chips fall where they may.

The only thing I see on the postive side for us what happens there will happen here as well. Same for the UK. Yuo would thinnk eventually some baht power will go back to the UK again. But not over night.

[JimboPSM]

Update - I’ve now added the Thailand closing figures to show how the days developments have affected the markets – both the open and close figures are in comparison to Friday close:

• USD/THB – open fall of 0.46% - close fall of 0.32%
  
  USD/GBP – open fall of 1.57% - close fall of 1.42%
  
  USD/EUR – open fall of 1.52% - close fall of 1.08%
  
  USD/AUD – open fall of 1.39% - close fall of 0.55%

Although there has been some easing back through the day it still has the appearance of the USD being supported in Thailand.

In Europe the stock markets have fallen over the cliff in what one financial commentator is calling "Meltdown Monday" this is also showing in the US stock market futures, however in the currency markets the fortunes of the USD has reversed after some big losses early in the trading day and is now showing some significant gains pretty well across the board - apparently on speculation that todays news kills off any further prospects of a further US interest rate cut.

Amazingly it was only yesterday I was reading yet another article saying that the economic problems in the US were grossly overstated using as its premise that in the last quarter there was reported growth of 0.8% (annualised 3.3%) completely ignoring the fact that the "growth" was only as a result of the injection of another $168 billion by way of the spending of the latest tax rebates which the government had to borrow and add to the budget deficit - the level of denial in some quarters is quite mind blowing.

[Zidane]

Quite a day on the stock markets to put it mildly....
Lehmann Brothers the 4th largest bank in America has filed for bankruptcy.......unprecedented !
Merrill Lynch has had to be bailed out by a takeover by Bank of America.
In the UK the FTSE index is down 5%......even the Swiss markets are down 4%.
The distinguished economist Alan Greenspan has said this sort of financial crisis only occurs only once in at least 50 years !!
The crisis wont end until the American housing market is stabilised.....not likely to happen in the near future.
Even though the Thai baht is hardly strong and being propped up by the Government be prepared for a drop in sterling when the Asian markets open tomorrow.

[bumper]

Well the dollar is dropping like a rock today agians the baht 34.29 Interestingly recovering a bit agianst the puund and euro. Supporting the dollar yesterday are you sure? My thoughts were that it was a confusing day to say the least and they did not act at all. Are they acting today who knows, still to confusing to come with a conclusion like that.

No this is nnt the first time Bank folded in the states, but, not this many since the depression. Lots of bets on the FEd reducing rates again today. If they do we dollar holders are back to sqaure one.

No doubt about it we have years to go before we see a real recovery.

I don't pretend to understand all this, but I think I do understand enough to know this is far from over. Maybe what ew having beeen seiing is the Markets thinking the government would continue on absorbing the losses of private firms who were g reddya dn made bad decesions.

I hate to say it but that is simply redicules. We are goign to pay enough as it is, much less absorbing their debts. I would not mind that if I stood a chance of making some money and enjoying the the hay day that many did. I never saw one of them say hey you I never saw one of them say to me I made a killing in the market. so heres a few bucks for you, since you didnt make any money on it.

Those are my personal feelings, my logic tells me there is litle choice but to pay the prices with the big guys.

So we are ponds just as the Issan farmers are.

Things have gotten so crazy lately with Politics here that I didn't even notice Thailands armed intrusion into disputed Canbodian temple area. Nothing is happening by accident. they are so worried about tourist and the economy on one hand. Thne conduct activities like this. I can't help but to think it was about drawing attention away from Bangkok. I'm not a plitical person and firmly believe that aspect of life is Thai business. But, this is gettign to be frightening, where are the limits. I don't see any it is bcoming very clear that the survival mode is in high gear. Spilling Thai blood is not a limting factor.

Thes are sad times for a Country I love. How they can continue to grow under these circumsrtances is beyond my vision.

[bumper]

Interesting now the papers are saying the Cambodians made a armed incurrsion into Thailand, life can be confusing here

Well SCB shows the baht at 34.17 at the moment.

Speaking of confusing, just how did the dollar gain ground on the Euro and the pound and lose against Thailand.

Is Thailand really that much stronger?

I understand they have little exposure to the current crisis, does Eurpoe and the OK have that much more? Taking inot consideration the sized of the relative economies?

But did Thailand enter Cambodia with troops or did Cambodia enter Thailand. Cambodia was the first complain does that count

Well if everybody is right and the FED reduces the rates, none of this is going to mean much in way of the dollar and the baht.

Watching a Bloomberg intreview tonight The guy said yes they probably will but in reality it is just goign to be symbolic, as 1/4% is not goign to make any difference.

of course my thoughts were except to us dollar holders watching the currency go back down again.

[bumper]

What is the basket of currencies that the Baht is tied to, Why in the world would it have the highest gains in the region? Except maniupulation, if that is the case I think baht of overkill this time around.

Asian Currencies: Korean Won, Rupee Fall as Stocks Tumble

By Lilian Karunungan and Kim Kyoungwha

Sept. 16 (Bloomberg) -- South Korea's won fell by the most since August 1998 as global investors accelerated sales of Asian equities in the wake of Lehman Brothers Holdings Inc.'s bankruptcy filing. The Indian rupee weakened.

The currency, the biggest loser among 26 emerging-market currencies tracked by Bloomberg, declined to the lowest in more than four years and the nation's Kospi stock index tumbled as much as 7.1 percent. Korea's policy makers held an emergency meeting to discuss intervention in financial markets. Vice Finance Minister Kim Dong Soo said the government may provide funds to help stabilize financial markets.

``There's panic selling for the won as investors' sentiment is badly bruised by Lehman's bankruptcy,'' said Lee Myung Hoon, a currency dealer with Industrial Bank of Korea in Seoul. ``A global share tumble is taking a toll on the local equity market. We are not sure how far the won will drop.''

The won fell 4.4 percent to 1,160 against the dollar as of the 3:00 p.m. close in Seoul, according to Seoul Money Brokerage Services Ltd. It earlier touched 1,166.25, the weakest since August 2004. The rupee fell 1.8 percent to 46.89 per dollar in Mumbai, according to data compiled by Bloomberg.

``There's a concern in the short term that global stocks, bonds and currency markets will be more volatile,'' South Korea's Kim said before an emergency meeting today with counterparts from the central bank and the financial regulator in Seoul. ``We will try to manage liquidity in a stable manner through measures such as open market operations.''

Global investors sold more Korean shares than they bought every day except six since Aug. 1, according to Korea Exchange data.

Outflows

India's rupee dropped the most since 1998 on speculation turmoil on Wall Street will heighten risk aversion among global investors, curbing demand for emerging-market assets. India's benchmark share index fell for a sixth day as American International Group Inc.'s debt ratings were downgraded, hampering the insurer's efforts to raise emergency funds.

``Capital outflows may increase as the global investment climate has deteriorated and stock markets are down across Asia and elsewhere,'' said Vikas Agarwal, a strategist in Mumbai at JPMorgan Chase & Co., the third-biggest U.S. bank. ``The rupee may come under more pressure as foreign investors remain net sellers of local equities.''

The rupee slid earlier to 46.9525, the lowest since July 24, 2006. JPMorgan forecasts the rupee will reach 47 by the end of the year.

The Bombay Stock Exchange's Sensitive Index, or Sensex, declined as much as 3.5 percent. The index is heading for its first annual loss since 2001.

AIG Rescue

The Philippine peso declined to its lowest level in 16 months and the nation's key stock index dropped 4.5 percent. Foreign investors sold $626 million more Philippine stocks than they bought this year, according to stock exchange data.

``People are waiting for further news from AIG,'' said Catherine Tan, head of foreign exchange at Thomson Financial Asia in Singapore. ``If the rescue falls through, there will be much more blood on the street and there will be more selling of currencies. When you have risk aversion, the peso is one of the currencies being hit in Asia.''

The local currency dropped 0.2 percent to 47.200 per dollar in Manila, according to bankers Association of the Philippines. The peso has fallen 12 percent in the past six months.

AIG, which had its credit ratings cut by Standard & Poor's and Moody's Investors Service, is seeking as much as $75 billion in loans to boost capital, according to people familiar with the situation.

Elsewhere, the Singapore dollar rose 0.2 percent to S$1.4307 against the U.S. currency. The Thai baht gained 0.9 percent to 34.28. Taiwan's dollar declined 0.1 percent to NT$32.070. The Malaysian ringgit and Indonesia's rupiah were little changed versus the dollar at 3.4565 and 9,455, respectively. Vietnam's dong was unchanged at 16,590.

To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net