Thai Baht currency NEWS

[binnsy]

I have been waving my magic wand for long enough.............maybe all that hard work is paying off!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Be careful you can get locked up for that 

[nookiebear]

The GBP Pound is at 48.80 for cash in the Bangkok Bank this morning,,,,,thats the highest for several months

Spoke to sooooooooon

[Admin]

Baht slide triggers inflation worries
By The Nation
2011-01-26

MR Chatu Mongol Sonakul, chairman of the Bank of Thailand, said yesterday that monetary authorities were facing a delicate balancing act, as the trade-off between exchange and inflation rates, coupled with domestic political upheavals, could trip up the economic expansion.

"There's been a need for the baht to weaken. Now, it's weakening but it puts pressure on inflation. It's a Catch-22 situation. Vietnam could not make it because of this. In principle, the MPC [Monetary Policy Committee] has to try to strike a balance. The political issue is another risk factor," he said.
The rise in inflation stems partly from the weakening baht, while the central bank and the central bank's MPC will have to maintain equilibrium between the exchange rate, interest rate, inflation rate and foreign exchange reserves, he said.

The baht yesterday broke the 31-per-dollar level, hitting 31.05 before closing at 30.96-97.

The depreciation of the baht will give a push to exports, the country's main economic engine, which will definitely support economic growth. The central bank favours a leisurely easing of the baht now that the currency is yielding some of its gains from last year.

"When the baht is depreciating, we have to manage it so that it is not too fast as the depreciating baht will help exporters, but it may also impact inflation," Chatu Mongol said.

The economy could continue to accelerate if inflation is low, he said. Countries with high inflation mostly have low rates of growth, as investors are afraid of making investments, while those with low inflation will enjoy higher economic expansion.

The University of the Thai Chamber of Commerce was also concerned about inflation and the political situation.

The government should extend the freeze on product prices and raise the price ceiling for diesel to Bt31-Bt32 per litre, said Thanavath Phonvichai, director of the university's Centre for Commerce and Business Studies.

Continuing the moratorium on price hikes, scheduled to expire in March, would slow down the rise in product prices, he said. Rising prices could put pressure on inflation and the central bank will have to notch up the policy interest rate to contain inflation, he said.

The policy rate should increase in the third quarter of this year, as production costs will not be affected much, he said. The rate is expected to move up 50-100 basis points this year.

The cap on diesel price at Bt30 per litre should not last beyond March. Increasing the diesel price ceiling to Bt31-Bt32 per litre is another suggestion for allowing more time for people to adjust. Maintaining the diesel price for too long and using other parts of the budget like excise taxes, to support the policy will not be positive for the economy in the long run, he said.

Political gatherings are another risk factor for the economy now. This was reflected in the big loss on the Stock Exchange of Thailand last Monday, he said.

Even though the political problem has not eroded consumer confidence, it affects the economy, especially confidence in tourism, he said. If the government can't control the political situation, it will definitely affect the economy, he said.

[nookiebear]

The GBP is moving the right way again

[TBWG]

Hi Bums

50 baht to the pound almost there!!!

Currently BBC site shows 49.97970 baht to the £


TBWG
 

[redrover]

The currencies to watch are the Asian regional monetary units. Less the Western rates, keep an eye on the Japanese Yen, HK Dollar, and Chinese Yuan.

[Admin]

BoT: Thai baht could keep see-sawing 
Bangkok Post: 4 Feb 2011

Foreign capital outflows from Thailand have been benign recently, although foreign investors recorded net sales during the past two weeks, says Atchana Waiquamdee, the deputy governor for Monetary Stability with the Bank of Thailand.

"Some capital shifted out. But some investors moved funds to the bond market or deposited them in non-resident baht accounts. I think investors found excuses for profit-taking," she said.

The recent baht depreciation was partly driven by gold importers responding to prices dipping to $1,300 from $1,400 per ounce at the end of last year, she said.

"There is increasing dollar demand from importers amid the weakening baht," Dr Atchana said.

The baht has been seesawing in light of uncertainties in the United States and European economies. Foreign investors have increased their hedging ratio because of foreign-exchange volatility.

"The dollar index has dropped 40%. If we regard the US dollar as a blue-chip stock, investors might bottom-fish it in the hope that it will rebound. The baht might weaken again," she said.

Factors affecting foreign exchange are expectations of movements in major currencies, economic trends in advanced and developing economies, and Asian economies increasing policy interest rates.

The central bank, meanwhile, is preparing a master plan to promote freer outward portfolio investment to meet the Asean Economic Community framework from 2015.

"In point of law, we may not seem very open. But in fact, we rarely refuse permission if there is a request. Inadequate hedging is an obstacle to the promotion of freer capital accounts as investors perceive higher costs from the weakening baht resulting from the outflows," Dr Atchana said.

The central bank aims to promote individual direct investment abroad as right now only listed firms are keen on outward investment.

She also said the central bank, in line with regional monetary policymakers, did not rule out capital controls to keep the impact of freer capital accounts manageable. "Admittedly capital control measures are not that effective at deterring the inflows, but there is no clear evidence on the cost of using them either."

The central bank's implementation of the 30% unremunerated reserve requirement in 2006 was an example as investors expected the baht to strengthen after it was rescinded. Also the Brazilian central bank has gradually increased its tax on capital inflows from 2% to 6%.

"We have prepared various degrees of capital control measures to ensure they are proportionate to the degree of inflows. We will use them when they are really needed," said Dr Atchana.

She said a major difference between 2006 and now is that the central bank can issue bonds to absorb funds injected from foreign-exchange intervention without seeking Finance Ministry approval.

The baht was second in Asia last year, appreciating 10% against the dollar, underpinned by a $30-billion surplus from trade and services income combined with net capital inflows. Appreciation pressure is expected to ease this year as the surplus is likely to decline. Meanwhile, uncertainties in major currencies could reduce pressure from inflows, Dr Atchana said.

http://www.bangkokpost.com/business/economics/219799/bot-baht-could-keep-see-sawing

[Admin]

Thai baht weakens as oil price rises 
Yahoo Finance: 2 Mar 2011
 
Thai Baht Weakens as Oil Price Rises on Middle East Turmoil

Thailand’s baht weakened for the first time in three days as political turmoil in the Middle East pushed up oil prices, raising concern global economic growth will slow.

Crude for April delivery rallied past $100 a barrel and U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday a sustained jump in the price of oil threatened to cause slower growth and higher inflation.

Rising commodity costs resulted in Thailand’s current-account surplus shrinking to $1.09 billion in January from $1.75 billion in December, the central bank said last month. The country has raised borrowing costs four times since June.

“Thailand relies on imported oil, so higher crude prices will be negative for the current account,” said Vishnu Varathan, an economist in Singapore at Capital Economics Asia) Pte. “Inflation is becoming a big concern. We believe the Bank of Thailand will continue to tighten.”

The baht fell 0.1 percent to 30.58 per dollar as of 9:42 a.m. in Bangkok, according to data compiled by Bloomberg. The currency earlier rose by as much as 0.2 percent to 30.49.

Consumer prices rose 2.87 percent in February from a year earlier, easing from a five-month high of 3.03 percent the previous month, a commerce ministry report said yesterday.

Bank of Thailand policy makers raised the one-day bond repurchase rate by a quarter percentage point to 2.25 percent on Jan. 12. They next meet on March 9.


http://www.bloomberg.com/news/2011-03-02/thai-baht-weakens-as-oil-price-rises-on-middle-east-turmoil.html

[Admin]

 CURRENCY

BoT: Baht pressure to ease this year 
Bangkok Post: 25 Mar 2011

Pressure on the baht appreciation should ease from last year in line with a declining trade surplus and rising outbound foreign direct investment, says Pongpen Ruengvirayudh, a Bank of Thailand assistant governor.

"Most foreign exchange pressure will still derive from the sale of US dollars by local exporters. But we expect baht demand from them to decline and demand for dollars from importers to speed up this year," she said.

After accelerating in last year's fourth quarter, export sales have slowed this year, causing the baht to weaken.

Meanwhile, outbound foreign direct investment amounted to 870 million baht in the first two months of this year, with lending for their expansion totaling 2.65 billion baht.

For all of 2010, outward direct investment was 1.3 billion, with lending for expansion totaling 7.2 billion baht.

"We expect the baht to move in more of a two-way direction this year, as many global uncertainties exist that could cause volatile foreign capital flows such as the political turmoil in North Africa and the Middle East, the Japanese earthquake and the European sovereign debt crisis," said Ms Pongpen.

The central bank has also found foreign bond investors are buying more hedging contracts. Net foreign selling has been recorded so far this year by the Stock Exchange of Thailand, while the bond market has recorded net foreign buying.

The central bank expects the net gains from trade and service revenue to stand at US$10-13 billion this year, down from $15 billion last year.

"Local exporters have increasingly bought hedging contracts, driving the baht's strength, while importers have hardly bought any hedging instruments," said Ms Pongpen.

She said the central bank's priority in foreign exchange management is to ensure that baht volatility is acceptable to businesses.

"We would not go against economic fundamentals, as that would lead to imbalances. Bu we will maintain long-term competitiveness compared with all trade partners' currencies, not just the dollar," said Ms Pongpen.

She said the baht initially weakened immediately after the earthquake in Japan but appreciated afterward. Exports to that country may decline in the short term but will pick up as reconstruction begins.

"The effects of the Japanese earthquake on capital flows remain uncertain. In the near term, repatriation of funds might occur, but we expect Japan's direct investment to Thailand to increase, as it will likely diversify more of its manufacturing abroad, especially automobiles and electronics," she said.

The central bank expects core inflation will rise above the 3% upper range of the target toward year-end, in line with the rising oil price and salary increases.

It currently forecasts headline consumer prices will increase by 2.5% to 4.5% this year.

http://www.bangkokpost.com/business/economics/228509/bot-baht-pressure-to-ease-this-year

[Admin]

Thailand 2011 GDP to be revised: BOT 
: 1 Apr 2011

BoT: 2011 GDP growth projection to be revised

BANGKOK, 1 April 2011 (NNT) – The Monetary Policy Committee (MPC) will review its estimation for the Thai economic expansion for 2011 due to several domestic and foreign factors, according to the Bank of Thailand (BoT).

BoT Monetary Policy Group Director Mathee Supapongse stated that the BoT will present information pertaining to the recent massive earthquake and tsunami in Japan, violence in Libya, and serious flooding in the southern part of Thailand to the MPC for discussion on 20 April 2011.

Mr Mathee continued that all the information would be used to support the MPC’s decision whether a review of the Gross Domestic Product (GDP) growth figure for 2011 was necessary.

The director estimated that Thai businesses, particularly in the automotive and auto parts industries, would be affected in a short term by the twin catastrophes in Japan. He said delay in auto assembly and delivery became noticeable since some auto parts and raw materials must be imported only from Japan.

Nevertheless, Mr Mathee believed the automotive demand is likely to be higher, and entrepreneurs would be able to seek raw materials for their production from other sources instead of Japan; therefore, the Thai automotive and auto parts industries are likely to expand strongly in a long term.

Regarding the Thai economic growth in the first quarter of this year, the director said a positive growth was likely judging from the conditions in January, February and the beginning of March.

However, Mr Mathee noted that the BoT must assess the overall situation again as there have been many negative issues, especially the incidents in Japan which have been sending impacts on the national economy since the middle of March.
----------------------------------------------

BoT: Thai econ in Feb expanding continuously
 
BANGKOK, 1 April 2011 (NNT) – The Bank of Thailand (BoT) has reported that the Thai economy in February 2011 was expanding continuously following the growing consumption and investment in the country plus foreign demands for Thai goods.

BoT Monetary Policy Group Director Mathee Supapongse elaborated that domestic consumption and investment expansion remained good while foreign demand was rising in both the export and tourism sectors.

The director however noted that the industrial production was plummeting because of many reasons such as closure of giant refineries for maintenance, which dragged down production of petroleum products in the country.

In addition, Mr Mathee admitted that the hard disk drive production shrank compared with the same period last year while other industries from auto, electric appliances as well as electronic parts were going on well.

Moving to agricultural produces, the director reported that the production in the agricultural sector was expanding smoothly, except for oil palm and tapioca, which were facing threats from natural disasters and insects.

As for economic stability, Mr Mathee detailed that there was continuous pressure. Although the headline inflation rate was reducing, the inflation rate expectation and production cost were projected to rise further, which would cause pressure to the inflation rate later on.

[Admin]

Baht gains on fund inflows
The Nation: 8 Apr 2011

Fund inflows drove the Thai baht above 30 per dollar for the first time since January 3. The currency made a new 3-month high when it touched 29.50 per dollar some time in the afternoon today, but intervention was attributed for the weakening.

The currency was last traded at 30.03-4 as of 6.30pm. It was 29.50 in November, 2010.

Foreign funds return to Thailand as well as other Asian markets due to strong economic outlook, compared with increasing risks elsewhere in the world.

This week alone, global funds' stock purchases outpaced their sale by US$332 million, boosting this month's net-buys to $606 million. According to the Thai Bond Market Association, overseas investors bought a net $941 million of government debt this week, as bond yields rose on higher benchmark rates.
 

[Admin]

Thai baht likely to remain volatile 
Bangkok Post: 12 Apr 2011

CURRENCY

Baht likely to remain volatile

Growing divergence in monetary policy among major economies and rising oil prices could increase the baht's volatility in the near term, say analysts.

The European Central Bank's move last week to increase its policy interest rate for the first time since the 2008 global downturn, by a quarter of a percentage point to 1.25%, also marked the first time it had ever led the US Federal Reserve's cycle. The Fed is still maintaining its easing stance with a session of money pumping, which started in November and is due to finish in June.

China raised required reserves last month before hiking its interest rate by a quarter of a percentage point this month.

Thailand's Monetary Policy Committee is due to meet on April 20, with its interest rate now standing at 2.5%.

Atchana Waiquamdee, deputy governor for monetary stability at the Bank of Thailand, said the baht's appreciation was driven by the strengthening of the euro after the European Central Bank's interest rate increase.

An increase in gold bar exports in the wake of higher prices had also caused demand for the baht to increase.

Dr Atchana said the central bank had acted in the same vein as regional central banks by buying dollars from the market to prevent the baht from overshooting. The European debt crisis remained a risk to global economic growth, with Spain's acceptance of financial assistance from the International Monetary Fund highlighting its limited capacity to stimulate its economy through fiscal policy.

"The G-3 economies might increase interest rates in the near future to keep inflation in check," she said. "The central bank will be mindful not to let the interest rate increase to deter economic growth and we are ready to change policy direction to support it. But we havent't witnessed a local economic slowdown."

Finance Minister Korn Chatikavanij yesterday said the baht's appreciation would help reduce the impact of rising oil prices on the economy. The oil price (West Texas Intermediate) hit its highest point for two and a half years at US$127 per barrel. It is trending higher mainly due to Libya's political crisis.

Usara Wilaipich, an economist with Standard Chartered Bank, said a possible change in the Fed's monetary policy in light of oil-driven inflationary pressure could reverse the baht's trend.

"I think the baht's appreciation was a short-term phenomenon. The baht will likely be highly volatile in the second quarter and might weaken to 30.50 to 31.00 to a dollar," she said.

Parson Singha, a strategist with HSBC, said the baht had appreciated minimally since the start of the year and had been slightly volatile because the central bank had continued to buy dollars.

"China's stance to allow the yuan to continue to appreciate and expectation that Singapore will allow its currency to be firmer had reduced upward pressure on other regional units," Mr Singha said.

http://www.bangkokpost.com/business/economics/231550/baht-likely-to-remain-volatile

[Admin]

Stronger baht due to foreign capital inflow 

:22 Apr 2011
MCOT NEWS วันศุกร์ ที่ 22 เม.ย. 2554

Stronger baht due to capital inflows, says BoT

BANGKOK, April 22 – Bank of Thailand (BoT) Assistant Governor Pongpen Ruengvirayudh on Thursday said the continued strengthening of the baht at present was attributed to foreign capital inflows into Asian countries including Thailand.

She said many Asian currencies including the baht had appreciated sharply.

The central bank continued monitoring the situation closely, but had not yet taken special measures to oversee foreign capital inflows.

Songtham Pinto, director of the BoT Office of Macroeconomics, said that capital flowing into the region remains usual at present. Whether the baht would strengthen or weaken depends on many factors, not only the policy interest rate hike.

On mounting concerns the higher policy interest rate would negatively affect current economic conditions, he said the interest rate is weighted on average at 4 per cent of total costs.

The higher interest rate could negatively impact Thailand's business sector, he said, but the central bank defends the interest rate rise because inflationary pressure remains high.

The bank must closely monitor inflation and attempt to control its upward movement through monetary policy and regulating consumer prices

He conceded the policy interest hike would have a short-term impact, but would benefit the economy in the long run if it could contain rising inflation. (MCOT online news)

http://www.mcot.net/cfcustom/cache_page/199048.html