elef Posted June 10, 2008 Report Share Posted June 10, 2008 Bangkok Post Today Link BoT detects baht speculation Foreign deals pushing down currency's value PARISTA YUTHAMANOP & SOMRUEDI BANCHONGDUANG The Bank of Thailand warned yesterday that foreign speculative transactions were pushing down the value of the baht. Suchada Kirakul, a central bank assistant governor, said regulators were closely monitoring transactions in the foreign exchange market. The baht traded yesterday at a five-month low of 33.21 to the dollar, down from 33.10 on Friday. Dealers said the baht, which opened at 33.16, fell as low as 33.40 before central bank intervention helped the currency rebound. The baht has come under pressure in recent weeks as investors have fled local equities and bond markets due to declining confidence in the country's political situation, Mrs Suchada said. Bond yields, meanwhile, have risen in recent weeks in anticipation that the Bank of Thailand will soon move to push up its benchmark one-day repurchase rate, now at 3.25%, to help curb rising inflationary pressure. Soaring oil prices have pushed the current account into a deficit, leading some analysts to project further baht weakness over the second half of the year. ''It is normal for equities investors to sell baht for dollars to move their funds out. But the central bank has seen some baht borrowings by foreign investors to buy dollars,'' Mrs Suchada said. ''We suspect that such transactions are being made for speculative purposes. Thai economic fundamentals have not changed that much within one day.'' Pressure on the baht has also increased because of greater demand from importers on fears of further currency weakness. Exporters have also delayed the sale of foreign currency earnings in hopes that the baht will continue to decline. A weaker baht increases the cost of imports and increases inflationary pressure, but benefits exporters in local currency terms. ''Importers should not panic, and exporters should not wait for the baht to get weaker. The baht at current levels does not reflect economic fundamentals,'' Mrs Suchada said. The central bank expects the current account to remain in positive territory in 2008, although imports have increased in value terms as global market prices for commodities such as oil, gold and steel have increased. The current account recorded a deficit of $1.7 billion in April, the highest in two years. Currency dealers said rising oil prices would put further pressure on the currency in the months ahead. Tak Bunnag, an executive vice-president of Bank of Ayudhya, said rising fuel prices would raise business operating costs worldwide and have an impact on capital flows. Fears of declining economic growth had prompted heavy sales of baht by importers, he said. Mr Tak said higher oil prices would further put pressure on the baht to weaken, and that the unit could reach 33.40 by the end of the week. Expectations that interest rates will rise and monetary policy will tighten to help curb inflation are growing in the market. Kobsidthi Silpachai, head of capital markets research at Kasikornbank, noted that core inflation, which excludes food and energy prices, had reached 2.8% last month and had moved steadily closer to the central bank's upper target of 3.5%. Central bank intervention in the currency market was expected to continue this week, as regulators would fight to keep the baht from moving lower than 33.50 to the dollar, he said. ''Our importer customers have continually sold the baht since last week, and trading activity has been quite active,'' Mr Kobsidthi said. Link to comment Share on other sites More sharing options...
sanddawg1 Posted June 10, 2008 Report Share Posted June 10, 2008 I hope it goes back to the 40s!!! Link to comment Share on other sites More sharing options...
waerth Posted June 10, 2008 Report Share Posted June 10, 2008 hehehehe if it goes into the 40's against the Dollar, it will go into the 60's or even 70's against the Euro! I will support that Waerth Link to comment Share on other sites More sharing options...
drogon Posted June 10, 2008 Report Share Posted June 10, 2008 Please give me 60-70 bht for 1 euro So I can buy 3 condos :grin: Link to comment Share on other sites More sharing options...
Central Scrutinizer Posted June 10, 2008 Report Share Posted June 10, 2008 hehehehe if it goes into the 40's against the Dollar, it will go into the 60's or even 70's against the Euro! I will support that Waerth Why? Are you being paid in Euros or baht? Link to comment Share on other sites More sharing options...
Neo Posted June 10, 2008 Report Share Posted June 10, 2008 Isn't this the answer to Thailands prayers? For how long have we been hearing how the stronger and stronger baht is hurting their economy, factory closures, uncompetitive exports vs China/Vietnam/etc? Now it moves ever so very, very, very slightly the other way and suddenly it seems the BoT has changed sides and is in panic that they don't want the baht to weaken even the slightest wee bit. What gives? Link to comment Share on other sites More sharing options...
Hardy641 Posted June 10, 2008 Report Share Posted June 10, 2008 All over 2007 the exporters have been constantly whining over the raising Baht. The BOT took a passive stand on it and did not intervene â?? except once â?? much. However, this is 2008 and the situation changed considerably. Inflation became a major threat and imports have risen sharply. A weakening Baht will further spur inflation and dampen an already diminishing consumer confidence. The article header is so typical. Once again they simply blame greedy foreign speculators instead of analyzing the underlying reasons for capital and investment outflow. TIT Link to comment Share on other sites More sharing options...
waerth Posted June 10, 2008 Report Share Posted June 10, 2008 Euros Link to comment Share on other sites More sharing options...
Faustian Posted June 10, 2008 Report Share Posted June 10, 2008 Hardy...yep, fully agree... Link to comment Share on other sites More sharing options...
Sporty Posted June 10, 2008 Report Share Posted June 10, 2008 All over 2007 the exporters have been constantly whining over the raising Baht. The BOT took a passive stand on it and did not intervene â?? except once â?? much.However, this is 2008 and the situation changed considerably. Inflation became a major threat and imports have risen sharply. A weakening Baht will further spur inflation and dampen an already diminishing consumer confidence. The article header is so typical. Once again they simply blame greedy foreign speculators instead of analyzing the underlying reasons for capital and investment outflow. TIT Yes, I also agree with you, Only their intervention did last several months(maybe 8 not sure). BoT detects baht speculation Foreign deals pushing down currency's value Link Disagree so much, with that link, I do not know where to start... Blaming others, is the thinking will make for 1997, type currency disconnect. Link to comment Share on other sites More sharing options...
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