Ouch - US dollar under 40 baht

[cavanami]

> Now I am wondering if there isn't some currency munipulation

> going on while a certain someone moves his billions out of the

> country?

 

Yes, I have heard that there are some major games being played by certain officials.

Also, that within a few months or so, the Thai Baht will be greatly devalued but these officials will aqlready be holding Euro/USD, etc and then they will cash in going the other way.

 

I just want to see the USD above 40 ~ 41 Baht ::

[LingNoi]

That is what I am thinking. There are also reports (I have not verified this but saw it a couple of places) that Thai banks are now offering 5% on foriegn accounts. Before they didn't want to give you hardly anything. They sound pretty hungry for USD/EUROs. Could it be they are offering foriegn deposits 5% knowing that they will soon devalue the Baht more than that? I believe the there is a past record with a certain someone managing to come out of Baht depreciations smelling like a rose.

[..]

Rumours from my Thai businessman compatriots are to buy dollars. Has been for a few weeks now. For what that's worth.

 

Cheers,

SD

[chuckwoww]

The baht appreciates to strongest level in 7 years

 

BANGKOK: -- The Thai baht has appreciated to 38.03 to the US dollar, the strongest in seven years, before weakening slightly to stay around 38.07-38.08 to the dolar in the morning session.

 

A money dealer at Bank of Ayudhya Plc said the baht had strengthened in the same direction with other currencies in the region since there was a shift of investment into the stock markets and an expectation that interest rates of the countries in the region would increase further.

 

The dealer projected the baht would continue to appreciate to 38 to the dollar in the near future and perhaps to 37 to the dollar by this year.

 

The Finance Ministry?s Spokesman Somchai Sajjapong said the continued strengthening of the baht to 38 to the dollar stemmed from an inflow of foreign funds to acquire a steel company listed on the Stock Exchange of Thailand.

 

However, he believed the appreciation of the local currency would proceed in the short run. The Bank of Thailand is closely monitoring the baht movement.

 

Should the baht strengthen for long due to an improvement in the economic fundamental, he said, the ministry would consider how the appreciation would have an impact on the country?s exports.

 

Still, he thought the exports had not yet been adversely affected at current because purchase orders are normally placed around 2-3 months in advance.

 

--TNA 2006-04-10

[OCgringo]

"Still, he thought the exports had not yet been adversely affected at current because purchase orders are normally placed around 2-3 months in advance."

 

with this logic then the next order will be hit ,

 

I think a strong baht is bad for Thailand , it is not competative anyway against China or India wages .

 

OC

[gene1944]

Bangkok Bank is offering deposit cds for 5.125% for 10 month term, minimum 100K baht and available until end of April. It is not just for foreign funds but available to anyone who has baht-- Thai or foreigner. Other banks are offering rates in the same ballpark and one is at 5.25% for 6 months.

 

This has little to do with baht foreign exchange values and more to do with banking policy and a credit crunch in Thailand.

[LingNoi]

I had a feeling I might be projecting my own conspiracy paranoia onto the exchange rate movements ::

 

So what exactly does "credit crunch" mean? Too much credit outstanding? Not enough liquidity? I would think that with all the money from the Shin sale coming into the country there would be plenty of cash around. I hear this term all the time but don't really know what it means.

 

And how come the Gov. keeps saying the baht appreciation is due to currency inflows from the purchases of major companies by foreign buyers? First Shin and now this steel company. I guess that countries with smaller economies could be affected, but I had never heard of this before.

 

I have just become interested in currency trading in the last year or so and am trying to understand what make exchange rates move. It seems very complicated, though interest rates seems to play a large part.

[gene1944]

Ling Noi ...So what exactly does "credit crunch" mean? Too much credit outstanding? Not enough liquidity? ...

 

Bank liquidity is the problem. It is not getting very wide spread publicity is it? Below is a reference article from the BOT. Unusual that they would be so frank in my opinion but there is no other reasonable purpose for the huge and sudden increase in deposit interest rates.

 

Back to the Baht:

There was an interesting article on the impact of the baht's recent increase and its detimental effect on TH exports in The Nation's business section.

 

 

Liquidity in banking system begins to decline markedly, says BOT

 

BANGKOK: -- Bank of Thailand?s Governor M.R. Pridiyathorn Devakula on Tuesday conceded a stiff competition among commercial banks in offering competitive deposit rates indicated liquidity in the banking system had markedly declined.

 

He said the current liquidity in the system had begun to drop to such a level that interest rates could edge up.

 

However, he believed major banks? move to offer more attractive deposit rates would not affect the performance of small banks, which are believed to adapt to more competitive environment.

 

Asked to comment on the economic direction, he said no matter whether Caretaker Prim Minister Thaksin Shinawatra would step aside or not, the country?s exports would continue to expand.

 

The exports in February continued to grow around 23.3 per cent.

 

Still, he said, the premier?s decision not to accept the post in the next government would bring about the national reconciliation, which could restore investor confidence.

 

The BOT chief added he could not yet assess the overall economic direction because he had not seen latest economic figures.

 

--TNA 2006-04-05

[Guest]

I don't have the first clue as to why or what influences the foreign exchange rate, and probablly wouldn't know anymore than I do now if some financial wizard sat down and explained it to me. I do know political events and oil prices are 2 of the factors. Since Thailand is in a politically unfavorable climate for investors, and the price of oil keeps rising, what's driving the dollar value down? I'm a little skeptical about the Shin sell off, which occurred when the Baht/dollar had almost reached 42/1, and then suddenly declines to under 38 in a matter of 2-3 months. Some of you may have forgotten, but Thai banks were involved in financing the Shin deal, so you shouldn't be too quick to give all the credit to an influencial politician. Removing billions of baht from the bank's assets is a better reason than any other I can think of.

[Flashermac]

THE NATION

12 April 2006

 

 

Baht at 6-year high against US$

 

The baht currency jumped to a six-year high against the U.S. dollar Wednesday on surging foreign demand, sparking concern that the rising baht would hurt competitiveness of Thai exports.

 

The baht stood at 37.90-38.00 against the U.S. dollar early Wednesday and was quoted at Bt46.37-75 to the euro.

 

"The baht surged on strong demand from foreign investors. Foreigners were buying up Thai assets and equities," said Kitti Nathisuwan, a senior economist at Macquarie Research Equities. The demand for the baht rose after the central bank on Monday raised its key interest rate to 4.75 percent, the highest level since 2000, in a bid to curb inflation, Kitti added.

 

The baht also gained ground against the dollar as investors dumped the U.S. dollar amid concerns over a possible US military strike against Iran, he added.

 

"Those factors added to support the baht and Thai exports could lose competitiveness if baht continues to rise further," Kitti said.

 

"If there is no intervention by the Bank of Thailand, the currency could go up to the Bt36 level. However, the central bank may not let that happen,"he added.