elef Posted March 15, 2007 Report Share Posted March 15, 2007 The Nation Today Link Rising baht set to break key barrier today The baht is likely to break the Bt35 barrier today due to massive selling of dollars by exporters concerned the currency will continue to surge against the greenback. The local unit reached a new nine-year high yesterday when it closed at Bt35.01 against the US dollar, dealers said. It opened the day at Bt35.08 and had almost shot into the Bt34 range when the market closed. A forex dealer who asked not to be named said exporters were concerned the baht would appreciate further after the expected revocation of Bank of Thailand (BOT) capital controls. Many believe the bank will scrap its 30-per-cent withholding requirement on foreign inflows. Depreciation of the dollar has also helped push up the baht. The baht has gained almost 3 per cent since the end of last year when it was trading at Bt36.04 to the dollar. That was stronger than its quote on December 18 when the central bank introduced the controversial controls to check baht appreciation. Yesterday's climb was attributed to implementation of a central-bank alternative for investors. From today, the BOT will no longer apply the 30-per-cent withholding requirement on foreign inflows if they are hedged in foreign-exchange swaps. "They have sold out their dollar income for days with a misunderstanding the fully-hedged measure would not be able to decelerate the strong baht. We may see Bt34 sometime Thursday," the dealer said. BOT Governor Tarisa Watana-gase said appreciation was a result of exporters selling dollars and not because of capital inflows speculating on the baht. She insisted the 30-per-cent withholding measure remained intact. She would not say if the bank had intervened in the foreign-exchange market. Calyon Credit Agricole CIB senior forex strategist Daragh Maher said policy-makers may be too nervous about baht appreciation. Nonetheless, the baht is expected to be stronger next year. Thailand's exports grew significantly last year despite the baht's appreciation against the greenback, Maher added. This indicates exporters were competitive - probably owing to improving productivity or costs, he said. This year the baht has under-performed, compared with regional currencies following the capital controls, Maher told a global economics and interest-rate seminar hosted by his company and the Public Debt Management Office. He expected the baht to be around the Bt34.5 mark to the dollar by December next year. Renewed economic growth in the US and a pickup in Asian gross domestic product next year will contribute to baht appreciation, he said. He expected a stronger domestic economy on the back of lower inflation and interest rates. An improving political situation will boost confidence in the currency. Maher believed Asian economic growth would suffer a soft patch in the coming months owing to poorer export numbers but will remain resilient overall. Regional growth will be about 7.6 per cent - down from 8.7 per cent last year. China will suffer a modest slowdown, he said and growth in Japan would be about 2 per cent. Newly appointed Finance Minister Chalongphob Sussangkarn indicated he wanted a sharp cut in the BOT's policy interest rate. ING Funds (Thailand) managing director Maris Tarab yesterday expected the BOT to slash rates by 50 basis points on March 21. Chalongphob meets Tarisa today for talks on the economy, central-bank reform and financial markets. Finance Ministry spokesman Somchai Sujjapongse said public spending had started to give the economy a boost over the five months between October and February when the government ran a cashflow deficit. Revenues were Bt489.12 billion and expenditures Bt597.55 billion. Wichit Chaitrong, Anoma Srisukkasem The Nation Link to comment Share on other sites More sharing options...
preahko Posted March 15, 2007 Report Share Posted March 15, 2007 what are they talking about, in the past month it's regularly been down (up!) to 33, even 32.something against the dollar... I know, I get paid in US dollars, I've taken an effective 20% cut in pay over the past half year because of this...! preahko Link to comment Share on other sites More sharing options...
elef Posted March 15, 2007 Author Report Share Posted March 15, 2007 That's the offshore interbank rate, the official rate is still around 35. Link to comment Share on other sites More sharing options...
Flashermac Posted March 15, 2007 Report Share Posted March 15, 2007 I've got friends who retired here with their pension at 40 baht/US$. They are not too happy at the moment! Link to comment Share on other sites More sharing options...
cavanami Posted March 15, 2007 Report Share Posted March 15, 2007 They will be more unhappy for the months to come...IMO! Link to comment Share on other sites More sharing options...
Flashermac Posted March 15, 2007 Report Share Posted March 15, 2007 Oh, well ... when I first came to Thailand, it was 20 baht/US$1. Link to comment Share on other sites More sharing options...
jon46 Posted March 15, 2007 Report Share Posted March 15, 2007 yes, I am afraid that the US Currency is losing ground to all currencies. Prices for omported items, including imported beers like Heinkein, have gone up recently here in the states. I longed for the days when the baht was 42 to the dollar! Link to comment Share on other sites More sharing options...
shygye Posted March 16, 2007 Report Share Posted March 16, 2007 Not all currencies. Look at the USD-Yen or USD-Mex Peso. Link to comment Share on other sites More sharing options...
Flashermac Posted March 16, 2007 Report Share Posted March 16, 2007 Oh whoopee ... the dollar is holding strong against the peso. Link to comment Share on other sites More sharing options...
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