I'm afraid I have to Join Ron on this one, but, without the strong language. I don't believe for a second money is not flowing into the country just as the first article says.Asian Currencies Gain, Led by Rupiah, Ringgit, on Recovery
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By Clarissa Batino
Oct. 13 (Bloomberg) -- Asian currencies advanced, led by Indonesia’s rupiah and the Malaysian ringgit, as regional economies spearhead the recovery from a global recession and draw investment.
Growth in Indonesia, Southeast Asia’s largest economy, will gather pace through this quarter, according to estimates announced today by Finance Minister Sri Mulyani Indrawati said. Malaysia yesterday reported the smallest drop in industrial output in 10 months and South Korean Finance Minister Yoon Jeung Hyun forecast a “much better” economic performance for his country in 2010.
“Capital flows into Asia remain relatively robust and the growth outlook is superior,” said Mitul Kotecha, head of global currency strategy in Hong Kong at Calyon, the investment-banking unit of Credit Agricole SA. “The wall of cash sitting sidelined by the crisis is waiting to get back in the market. Asian currencies seem to be an attractive destination.”
The rupiah rose 0.5 percent to 9,445 per dollar as of 4:11 p.m. in Jakarta, according to data compiled by Bloomberg. It’s gained 15 percent this year and reached 9,350 on Oct. 8, the strongest level since September 2008. The ringgit climbed 0.2 percent to 3.3919, having also touched its highest level in more than a year within the past week. The Philippine peso rose 0.3 percent to 46.475.
The International Monetary Fund this month forecast Asia’s developing economies will expand 6.2 percent this year, while the U.S., Europe and Japan all contract. HSBC Holdings Plc last week raised its 2010 growth forecast for Asia excluding Japan to 7.6 percent from 6.9 percent, citing strong demand in the region and accelerating exports.
Faster Growth
Indonesia’s $514 billion economy expanded as much as 4.3 percent from a year earlier in the third quarter and growth is expected to accelerate to 4.5 percent in the final three months of the year, Sri Mulyani said today in Jakarta. Passenger-car sales in China, the world’s most-populous nation, jumped 84 percent last month to 1.015 million units, the China Association of Automobile Manufacturers reported today.
Global funds bought $19.4 billion more Korean shares than they sold this year through yesterday, and pumped more than $12 billion into equities in both India and Taiwan, exchange data show. The won has gained 7.8 percent this year versus the greenback, India’s rupee is up 4.7 percent and the Taiwan dollar has advanced 1.6 percent.
‘Buy Asia’
“The theme among investors is ‘buy Asia’ and that’s where the flows are going right now,” said Alan Cayetano, senior currency trader at Metropolitan Bank & Trust Co. in Manila. “The mindset is really bearish dollar.”
Central banks in the region have been “very, very active” in the last few days trying to stem appreciation that may hurt their exports, Calyon’s Kotecha said. Policy makers can try to influence exchange rates by buying or selling foreign exchange.
South Korea’s Ministry of Strategy and Finance said yesterday it will “take steps to stabilize the drastic won movements stemming from herd behavior,” while Bank of Thailand Governor Tarisa Watanagase said policy makers will intervene when necessary to stem volatility in the baht. The Philippine central bank has been buying dollars at the 46.45 to 46.50 peso level, according to Cayetano. Bank Indonesia sold dollars yesterday at 9,500 rupiah, said Joanna Tan, a regional economist at Forecast Singapore Pte.
The Korean won rose 0.1 percent to 1,168.80 per dollar in Seoul, having yesterday reached a one-year high of 1,164. Thailand’s baht and China’s yuan were both little changed at 33.33 and 6.8279, respectively. Financial markets in Mumbai were shut for a local holiday today.
To contact the reporter on this story: Clarissa Batino in Manila at cbatino@bloomberg.net.
Last Updated: October 13, 2009 05:20 EDT
Strong baht could hurt export targets
Published: 13/10/2009 at 12:00 AM
Newspaper section: Business
Thailand's exports are unlikely to achieve 10% growth next year if the government leaves the baht's appreciation unchecked, exporters warn.
"Ongoing baht strength will harm Thai shipments and weaken our competitiveness," said Pornsil Patchrintanakul, deputy secretary-general of the Board of Trade.
Mr Pornsil was one of a group of leading executives from more than 50 trade associations who yesterday met with Veerasak Jinarat, the vice-minister for Commerce.
The baht, quoted yesterday at 33.35 to the US dollar, is currently trading at a 14-month high and is up 4.4% since January.
Exporters said the baht has appreciated significantly faster against the dollar than competing currencies such as the Chinese yuan or the Vietnamese dong, hurting Thailand's trade competitiveness.
Exporters yesterday called on the central bank to help maintain the baht at about 36 baht per dollar to keep Thai exports competitive particularly for agriculture and food.
But Bank of Thailand Governor Tarisa Watanagase said the baht was moving in line with other Asian currencies. There was no need for a repeat of the 2006 capital controls to try to prevent a rise in the currency's strength.
"We are still taking care of the baht," she said. "But there is no need to have any capital controls as we have not seen speculation in the currency yet."
The central bank does plan to diversify its foreign reserves with other currencies in coming weeks, she said.
"We will do what we can," she said.
The BoT has intervened steadily to slow the baht's rise to help Thailand's export-driven economy, but the currency's value against the dollar has still increased by about 2% since September.The government is facing calls to help control costs by cutting import tariffs on raw materials and introducing a carbon tax.
Exporters urged the the government to accelerate establishing its own carbon and wastewater standards.
"The national carrier Thai Airways International, for instance, is subject to pay 800 million baht carbon tax to the EU in 2012 as it flies over EU's territorial sky and emits carbon dioxide to the global atmosphere," said Mr Pornsil. "The Thai government should also issue the same standards and requirements requiring other airlines to pay carbon tax to Thailand."
Vollop Vitanakorn, vice chairman of Thai National Shippers' Council also warned Thailand was expected to suffer from an unskilled labour shortfall of about one million people over the next five years, as unskilled workers return to the agricultural sector as agricultural product prices rise.
In addition, the government's free education programme is expected to yield a skills improvement that will add to segment's labour shortage, he said.
hopefully ASAP me me me Thai Baht Falls to 6-Month Low Before Protest; Bonds Decline
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By Patricia Lui
June 19 (Bloomberg) -- The Thai baht fell to the lowest level in six months on concern a planned anti-government protest tomorrow in Bangkok will add to political uncertainty and deter foreign investors. Bonds fell.
The baht is the third-worst performer in Asia this quarter among the 10 most-traded currencies outside of Japan as a rally in crude oil prices has pushed the trade balance into a deficit and inflation to its fastest in almost a decade.
``The baht is being hit by many factors, including the political uncertainty,'' said Yaowaluck Pipittanaban, a treasury dealer at Bank of Ayudhya Pcl in Bangkok. ``Tomorrow is D-day,'' she said, referring to the planned street protests by opposition parties.
The baht fell as much as 0.5 percent to 33.46 a dollar, the lowest level since Jan. 7, before trading at 33.43 as of 3:20 p.m. in Bangkok, according to data compiled by Bloomberg.
The People's Alliance for Democracy, which led protests that preceded a 2006 coup against former premier Thaksin Shinawatra, has called for the ousting of Prime Minister Samak Sundaravej at daily demonstrations held for almost a month on a main road in Bangkok. They are planning another rally tomorrow which may garner up to 5,000 protesters.
`Inflation Theme'
Consumer prices gained 7.6 percent last month from a year earlier, the Commerce Ministry said on June 2. The rate was the highest since August 1998.
``What is clearly hurting the baht is the inflation theme and that the central bank is seen to be behind the curve,'' said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore. ``The trade balance has turned into a significant deficit and that is important because the baht benefited in the last two years from the huge surplus.''
Record imports in April pushed the nation's trade balance to a deficit of $1.7 billion, from a surplus of $342 million the previous month, the Bank of Thailand said on May 30. The current account, a measure of trade and investment flows, had a shortfall for the first time in 21 months.
Bonds fell for a fourth day on concern accelerating inflation will spur the central bank to raise borrowing costs, damping the appeal of government debt.
The yield on the 5 1/8 note due in March 2018 rose 20.9 basis points to 6.112 percent, according to the Thai Bond Market Association. The price fell 1.45730, or 14.57 baht per 1,000 baht face amount, to 92.81537.
To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net.
Last Updated: June 19, 2008 06:15 EDT
