Thai Baht currency NEWS

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BoT says Thai baht value weakening 
Bangkok Post: 12 Oct 2010
BoT says baht's value weakening

The value of Thai baht weakened on Monday morning due to concerns about the government's plan to introduce measures to curb the strong baht, Bank of Thailand assistant governor Paiboon Kittisrikangwan said.

The central bank will continue closely monitoring the baht's situation and foreign capital inflow, Mr Paiboon said.

BoT domestic economy department director Methee Supapong said the Monetary Policy Committee will meet on Oct 20 to decide whether any action would be taken to stabilise the baht's value.

Thai Chamber of Commerce (TCC) deputy secretary-general Pornsilp Patcharintanakul said the private sector supported the government’s idea to collect a 15 per cent withholding tax from foreign investors buying government bonds.

Mr Pornsilp said he believed the tax measure could help curb the baht’s appreciation, just as Chile had arrested its currency’s rise by introducing a similar tax policy.

A withholding tax on government bonds for foreigners was lifted some years back to help stimulate the economy.

He said the government’s policy to curb the strengthening baht by encouraging private firms to increase investment overseas would not be fruitful over the short term.

Mr Pornsilp suggested that, in the short term, the government should clearly separate those manufacturers hard-hit by the strengthening baht from those not affected, and then provide financial assistance to each identified firm.

He said most small and medium enterprises have no knowledge on the foreign exchange system and the effects of the baht’s value movement.

“The government should rapidly step in to provide training courses about foreign exchange to these people to enable them to adjust to the changing circumstances,” he said.

Mr Pornsilp expected that the Thai currency would rise to 29.50 baht to the US dollar by the end of the year. His projection was based on the continuing expansion in the country’s exports, the US policy to double its exports this year and the tendency that the Chinese yuan would further strengthen.

He also predicted the Thai currency could strengthen to 28.50 baht against the US dollar in 2011.

Labour permanent secretary Somkiat Chayasriwong said the tripartite wage committee will not make any decision yet on an increase next year in the minimum daily wage, but it will discuss ways to raise the rate that could fit in with the rising cost of living and employers' costs.

The official wage committee would be appointed next week, so this acting committee cannot set next year's wage increase, he said.

Mr Somkiat said there was a need for a thorough study of an appropriate new wage level, and this could lead the way to future increases.

On Prime Minister Abhisit Vejjajiva's proposal to increase the minimum daily wage from 206 baht to 250 baht nationwide, Mr Somkiat said this just sets a framework to improve the quality of living of the workers.

However, issues including workers' living expenses, employers' operating costs and the growth of the economy would have to be addressed when the committee discusses the wage increase.

It was still not possible to say whether a wage increase could be approved to the figure suggested by the prime minister, Mr Somkiat said.

http://www.bangkokpost.com/business/economics/200822/bot-says-baht-value-weakening
 

[Admin]

BoT: Fixed exchange rate 'dangerous' 
Bangkok Post: 15 Oct 2010
BoT: Fixed exchange rate “dangerous”

The Bank of Thailand will not reintroduce the fixed exchange rate policy as it is harmful for the country’s exchange rate system, governor Prasarn Trairatvorakul said on Friday.

The 1997 financial crisis occurred because the then government introduced this policy, Mr Prasarn added.

The BoT chief was responding to the suggestions by former deputy prime minister and finance minister Virabongsa Ramangura that the central bank should cut its policy rate and reintroduce the fixed exchange rate policy to curb the baht’s appreciation.

“The central bank is now using the flexible exchange rate policy in order to avoid distorting the money market mechanism”, said Mr Prasarn.

Asked about the suggestion on cutting the repurchase rate, BoT governor said it depends on the decision of the Monetary Policy Committee which will meet next Wednesday. The baht’s value related issues, including the exchange rate will be considered at the meeting.

BoT Board chairman MR Jatumongkol Sonakul said on Friday that he personally sees that the need to raise the central bank’s policy rate is now lessened as the strengthening baht had slowed down inflation.

“The repurchase rate could not be immediately cut as called for. The changing in the monetary policy must be gradually done to get ready for dealing with possible negative impact”, he said.

MR Jatumongkol said even though he is the BoT Board chairman, but he has no authority in setting the policy rate. It is the authority of the Monetary Policy Committee.

http://www.bangkokpost.com/breakingnews/201545/bot-fixed-exchange-rate-dangerous

[Admin]

Rate cut viewed as tonic for Thai baht 
Bangkok Post: 16 Oct 2010
Rate cut viewed as tonic for baht
Businesses say inflation no worry

Businesses are calling on the Bank of Thailand to slash its benchmark interest rate by 50 basis points to 1.25% to help discourage capital inflows and arrest the appreciation of the baht.

The central bank's Monetary Policy Committee (MPC) is scheduled to meet on Wednesday to review its one-day repurchase rates, which is currently at 1.75% and already one of the lowest n the region. The MPC has one more meeting scheduled this year, on Dec 1.

The central bank raised its rate for a second straight meeting on Aug 25 and signalled further increases were in the pipeline after the economy overcame political unrest to grow faster than estimated in the second quarter.

However, central bankers have since said that pressure to raise rates has eased as inflation remains benign.

Payungsak Chartsutthipol, chairman of the Federation of Thai Industries (FTI) said that in any case, low interest rates in the range of 1.25% to 1.75% were not factors that would cause a significant increase in inflation. He noted that the interest rates of most commercial banks had not been increasing to the same extent as the central bank rates.

"The central bank thus should not use inflation as a reason to increase interest rates, as currently general rates in the market are as high as 3.4%," he said.

Mr Payungsak warned that an increase in interest rates also affected the bond market, as purchases of government bonds rose 71.6% for the first nine months of this year to 163.23 billion baht from 575.07 billion in the same period last year.

FTI vice-chairman Thanit Sorat added that the impact of the strong baht would be felt very clearly by the first quarter of next year.

"Now we are talking about the baht reaching 28 to the US dollar. Once exports slow down, all supply chains would be hard hit. There will be an oversupply of products in the domestic market with price competition," said Mr Thanit, who also heads the FTI's economic and logistics department.

"We are not asking for unrealistic proposals, such as fixing the currency rate. But the baht has gained by 7% in August and September, which is too fast for us to adapt."

Mr Thanit added, however, that the proposal to lower interest rates to 1.25% was only one part of the remedy as other measures were also needed to ensure effectiveness.

However, Deputy Prime Minister Trairong Suwannakhiri said a rate cut by the central bank was unlikely to weaken the baht, pointing out that all currencies in the region were gaining strongly against the dollar.

Instead, he said the rate cuts would affect inflation.

"It must be admitted that we could not fight against the powerful United States, which is now [using the weakness of] its dollar to rehabilitate its economy," he said.

"What we should do is to find appropriate measures to help those who are really hit by the baht appreciation."

Areepong Bhoocha-oom, permanent secretary for the Finance Ministry said the central bank would take into account all suggestions and recommendations made by the private sector.

"The entire private sector is not being hurt by the strengthening baht," he said. "Some manufacturers are actually benefiting from it, and many of them are not hurting at all."

Nonetheless, he said the ministry had no plans to tax profits gained from the difference between domestic and overseas interest rates, as suggested by some private-sector executives.

"It is a difficult thing to do. No country in the world has introduced such a tax policy. In addition, the imposition of such a tax could lead to the misunderstanding that Thailand does not welcome foreign capital," he said.

In a separate development, food exporters are calling on the government to waive the 2% import tariff on raw materials for animal feed. They also want the government to encourage commercial banks to extend soft loans secured by dollars to exporters in equivalent amounts to the differences between the current foreign exchange rate and the rate at which they have secured purchase orders.

At best, the government might help subsidise those differences, said the food exporters who met Vatchari Vimooktayon, the Internal Trade Department director-general yesterday to discuss ways to ease the impact on their businesses.

For its part, the Commerce Ministry is worried that exporters might use their problems as an excuse to cut the prices they pay to farmers.

The government is being urged to introduce special foreign-exchange channels for exporters by offering exchange rates that are competitive to those in rival countries.

http://www.bangkokpost.com/business/economics/201654/rate-cut-viewed-as-tonic-for-baht

[nookiebear]

The private sector may not be suffering,,,,,,,,What a load of Boll_x!!!!
The tourist sector is hardly a major contributor any more ,,,Just look at the ex rates,,,Plenty of other destinations ,,,far less expensive too

[Admin]

Kasikornbank sees baht at 25 in 2 years 
Bangkok Post: 30 Oct 2010
Kasikornbank sees baht at 25 in two years

Baht has appreciated more than any Asian currency except Japanese yen

The Kasikornbank research unit forecasts the Thai baht will reach 28 baht per US dollar next year and keep rising to hit 25 baht within two years.

Wiwan Tharahirunchote, executive chairman of the research unit, said the baht will keep rising next year in line with the weakening dollar, foreign capital inflows and the country's trade surplus.

The baht has appreciated by 10.3 per cent to 29.95 to the dollar for the year to date, the second highest among Asian currencies behind the yen.

"It is possible to see the baht touch 25 baht to the dollar, but it will probably take a year or two. Exporters should set their prices to offset a currency gain of 10 per cent from the actual exchange rate," said Mrs Wiwan.

KBank forecasts Thai GDP growth between 3.5 per cent and 4.5 per cent next year as the world recovery is still wobbly, meaning exports will grow only 9-10 per cent after this year's 24.5 per cent expansion. In 2011, it predicts the trade surplus will fall to between $4.5 and $7.6 billion, below this year's $10 billion, while the trade account balance is estimated at $5.5 billion to 8.6 billion from this year's $9.8 billion.

Foreign investment is expected to grow by 7.5 per cent to 9 per cent next year, down from 10.2 per cent. Inflation is expected to expand to 2.5 per cent to 4 per cent next year following this year's estimate of 3.4 per cent, which may rise to 3.5 per cent due to the floods.

Core inflation this year is predicted to rest at 0.9 per cent, increasing to between 1.8 per cent and 3 per cent next year.

"In 2011, inflation will likely expand as the country copes with floods and rising food prices, but this is not cause to worry as interest rates should also rise," said Mrs Wiwan.

Gold prices will be high but volatile, possibly reaching $1,380 an ounce but not lower than $1,300, she said.

"Investors should follow the Fed's announcement on interest rates, and once it announces a rate increase, which should not happen before the third quarter, the time to make money from gold prices will have ended," said Mrs Wiw

http://www.bangkokpost.com/business/economics/203906/kasikornbank-sees-baht-at-25-in-two-years

[nookiebear]

Just how long will it be until the Baht has to be devalued AGAIN,,,,,,,Who was here the last time it collapsed,,,92 to the GBP

[Admin]

Asian currencies fall led by Thai baht 
: 15 Nov 2010
Asian Currencies Weaken on Concern Policy Makers Will Seek to Curb Gains
source: bloomberg.com
By Yumi Teso - Nov 15, 2010 10:22 AM GMT+0700

Asian currencies fell, led by Thailand’s baht, on concern policy makers around the region will unveil measures to curb inflows of funds to stem currency gains.

The Bloomberg-JPMorgan Asia Dollar Index hovered near a two-week low as growing concern over the stability of Ireland’s finances spurred demand for safer assets. Ireland’s cabinet hasn’t discussed seeking a rescue and the country has no immediate need for cash, Enterprise Minister Batt O’Keeffe said yesterday. Germany is pressing the nation to seek aid before a Nov. 16 meeting of European finance ministers to calm market volatility.

“Investors seem to be a bit risk-averse and are using Ireland’s concern as an excuse to sell securities that have risen sharply,” Yuji Kameoka, a senior economist based in Tokyo at the Daiwa Institute of Research Ltd, said. “There is some concern Thailand and South Korea may introduce measures to control capital flows.”

The baht dropped 0.7 percent, the most since June 2008, to 29.99 per dollar as of 9:14 a.m. in Bangkok, according to data compiled by Bloomberg. The Singapore dollar lost 0.5 percent to S$1.2988 and the Philippine peso slipped 0.2 percent to 43.815.

Each one of Asia’s 10 most-traded currencies has gained this year as overseas investors poured $51.5 billion into stocks in India, South Korea and Taiwan. The Group of 20 leaders agreed in Seoul last week to allow emerging markets to adopt regulatory steps to cope with the surge in capital inflows, offering them cover to limit currency gains.

Tax Revival

The baht, which has advanced 11.2 percent this year, slid for a fourth day. Southeast Asia’s second-biggest economy last month removed a 15 percent tax exemption for foreigners on income from domestic bonds, and Governor Prasarn Trairatvorakul said on Oct. 21 that the Bank of Thailand is studying additional measures to reduce currency volatility. Prime Minister Abhisit Vejjajiva said on Nov. 12 he is “still worried” about the baht’s appreciation.

South Korea’s won climbed 0.1 percent to 1,127.20 per dollar. Grand National Party lawmaker Kim Song Sik last week submitted to parliament a bill to revive a 14 percent tax on overseas investors’ bond holdings.

Taiwan’s dollar climbed 1.7 percent, the most since 2000, to NT$30.26, according to Taipei Forex Inc. The currency traded near a two-year high before a report this week that economists predict will show the economy grew for a fourth straight quarter. The Ministry of Finance said last week the central bank, the financial regulator and the ministry will study measures to manage fund inflows. Global funds have pumped $2.3 billion into the island’s stocks this month alone.

The Philippines will take steps to “ensure less volatility” in the peso, President Benigno Aquino said on Nov. 12. There should be “concerted action,” he said.

Elsewhere, Malaysia’s ringgit fell 0.2 percent to 3.1183 per dollar and Indonesian’s rupiah lost 0.1 percent to 8,938.

http://www.bloomberg.com/news/2010-11-15/asian-currencies-weaken-on-concern-policy-makers-will-seek-to-curb-gains.html

[Admin]

Baht headed for second weekly drop 
: 19 Nov 2010
Baht Headed for Second Weekly Drop on Capital Curbs Concern
source: Bloomberg.com
By Lilian Karunungan - Nov 19, 2010 9:31

The Thai baht was poised for a second weekly decline on concern policy makers may step up curbs to discourage inflows that cause volatility in the currency.

Bank of Thailand Governor Prasarn Trairatvorakul said yesterday the central bank is in talks with other countries on joint measures to deal with capital inflows. South Korea’s finance ministry yesterday said that the government supports a law reviving a bond tax on international investors as it seeks to stem capital inflows arising from monetary easing in the U.S.

“Authorities in Thailand are looking at South Korea, which is talking about imposing capital measures,” said Radhika Rao, a regional economist at Forecast Pte in Singapore. “For BOT, they’ve already frontloaded their measures. The BOT has been very active in limiting baht appreciation.”

The currency dropped 0.4 percent this week to 29.90 per dollar as of 8:47 a.m. in Bangkok, according to data compiled by Bloomberg. It rose 0.1 percent today. The currency reached 29.46 on Nov. 10, the strongest level since 1997. The baht is Asia’s best performer outside of Japan this year, rising 11.3 percent.

The government last month removed a 15 percent tax exemption for foreigners on domestic bond income.

Reports today and next week may show exports increased for a 12th straight month in October and gross domestic product grew for a fourth consecutive quarter.

Data due today will show overseas shipments climbed 19.6 percent from a year earlier after having gained 21.2 percent in September, according to the median estimate of economists in a Bloomberg survey. A report on Nov. 22 may say gross domestic product rose 7.2 percent in the third quarter from a year earlier, after having increased 9.1 percent three months earlier, a separate survey shows.

http://www.bloomberg.com/news/2010-11-19/baht-headed-for-second-weekly-drop-on-capital-curbs-concern.html

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Baht weakening only for the short run, says BoT chief
source: MCOT News
วันศุกร์ ที่ 19 พ.ย. 2553

BANGKOK, Nov 19 – Bank of Thailand (BoT) Governor Prasarn Trairatvorakul on Thursday indicated the weakening of the baht to 30 to the US dollar stemmed from the current capital outflow, but emphasised that the situation would proceed only for the short term.

He said the outflow took place following the sell off for profit-taking in the stock market and the currency exchange market by foreign investors, who turned again to holding the dollar upon renewed concerns on public debt problems in such European countries as Ireland, Greece, and Portugal.

However, he believed the outflow would continue in the short run and that the Thai baht would again turn to strengthen because the United States still counts on easing financial measure by injecting a large amount of money into its economic system again.

BoT Governor Prasarn conceded the central bank is studying various measures to contain foreign capital inflows. Whether the measures will be taken or not depends on the influx of capital, the overall financial environment, side effects, and effectiveness

But for now he foresees no need to implement further measures to control the capital inflow.

Next year, he projects that foreign capital inflows would mount. So, it is necessary for the central bank to implement the policy with caution and prepare financial tools to cope with the situation.

Mr Prasarn affirmed that Thailand’s international reserves are now sufficient if the central bank wants to count on the reserves to maintain the country's financial stability in case of the capital outflow.

Also, the bank had to monitor the implementation of the loan control policy by China to curb the accelerating inflation rate because China is a major country engaged in trade with many countries worldwide including Thailand, he said.

The BoT chief admitted that the political situation is considered the gravest internal risk to the Thai economy next year because the economy could not enjoy substantial growth if the political climate is instable. (MCOT online news)

http://www.mcot.net/cfcustom/cache_page/131798.html

[Admin]

Baht Rises on Speculation Economic Growth Will Lure Investors
source: Bloomberg.com By Yumi Teso

Nov. 22 (Bloomberg) -- Thailand’s baht rose before a report today that economists predict will show Southeast Asia’s second- largest economy expanded for a fourth straight quarter.

Gross domestic product increased 7.2 percent in the three months to September from a year earlier after climbing 9.1 percent in the second quarter, according to the median estimate in a Bloomberg survey before the data at 9:30 a.m. The baht also gained after Irish Finance Minister Brian Lenihan said yesterday the country will seek aid from the European Union and the International Monetary Fund to shore up its banking system.

“With the stabilizing situation of the Ireland issue, investors are becoming less risk averse, encouraging them to put more money into Asia and boosting regional currencies,” said Hideki Hayashi, a global economist at Mizuho Securities Co. in Tokyo. “The growth rate is higher in the region than the major economies and there are yield advantages.”

The baht rose 0.1 percent to 29.94 per dollar as of 8:23 a.m. in Bangkok, according to data compiled by Bloomberg. The currency may advance to around 29.70 this week, Hayashi said.

The baht has strengthened 11.2 percent this year against the greenback, the best performance among major currencies in Asia, as the nation’s fastest economic growth in 15 years attracted overseas investors to local stocks. Global funds bought $1.8 billion more Thai equities than they sold this year, according to exchange data.

Thailand’s benchmark interest rate is 1.75 percent, compared with near zero in Japan and the U.S., helping to lure a net $7.9 billion into local debt in the first 10 months of 2010, according to data from the Thai Bond Market Association.

Government notes rose. The yield on the 3.125 percent debt due December 2015 fell two basis points to 2.94 percent, according to Bloomberg data. The rate last week reached a three- month high of 2.99 percent.

The one-year onshore interest-rate swap, the fixed cost needed to receive a floating payment, dropped two basis points to 1.315 percent. A basis point is 0.01 percentage point.

http://www.businessweek.com/news/2010-11-21/baht-rises-on-speculation-economic-growth-will-lure-investors.html

[Admin]

Thai baht set for third weekly decline 
: 26 Nov 2010
Baht Set for Third Weekly Loss on Slowing Growth, Rate Outlook
source: Bloomberg.com By Yumi Teso

Nov. 26 (Bloomberg) -- Thailand’s baht was headed for a third weekly decline on speculation a slowing economy may encourage the central bank to leave borrowing costs unchanged during a review next week.

The currency has dropped 0.5 percent since government data on Nov. 22 showed Southeast Asia’s second-biggest economy grew at the slowest pace in three quarters in the three months through September. The Bank of Thailand will keep its one-day bond repurchase rate at 1.75 percent when it meets on Dec. 1, according to economists in a Bloomberg survey.

“We are seeing a slowing of growth, and it’s probably not as attractive to come into Thailand right now as before,” said Nalin Chutchotitham, a Bangkok-based analyst at Kasikornbank Pcl. “We don’t expect a rate hike next week. Any gains in the baht will be gradual.”

The baht slid 0.4 percent this week and 0.1 percent today to 30.08 per dollar as of 8:39 a.m. in Bangkok, according to data compiled by Bloomberg. The currency has still gained 10.7 percent this year, the most among Asia’s 10-most traded currencies.

Standard Chartered Plc lowered its rating on the baht to “neutral” from “overweight,” saying a slowing economy and political risks are likely to damp capital inflows. The central bank will also likely be less tolerant of appreciation, Thomas Harr, Singapore-based head of Asian foreign-exchange strategy at Standard Chartered, said yesterday. The U.K.-based lender cut its end-2010 forecast for the currency to 30 per dollar from 29.50, and its end-June projection to 31.50 from 31.

Government bonds were unchanged this week and today. The yield on the 3.125 percent debt due December 2015 was 2.96 percent, according to data compiled by Bloomberg.

The one-year onshore interest-rate swap, the fixed cost needed to receive a floating payment, was unchanged from a week ago. It fell 2.5 basis points from yesterday to 1.335 percent. A basis point is 0.01 percentage point.

--Editors: Ven Ram, Sandy Hendry

http://www.businessweek.com/news/2010-11-25/baht-set-for-third-weekly-loss-on-slowing-growth-rate-outlook.html

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Baht likely to reach 26-27 to US dollar next year: UTCC forecast
source: MCOT News วันศุกร์ ที่ 26 พ.ย. 2553

BANGKOK, Nov 26 – The baht is set to continue appreciating and will likely reach 26-27 to the US dollar next year, as the global economy remains fragile due to economic uncertainties in the United States and Europe, according to a leading economic forecaster.

Thanawat Polvichai, director of the University of Thai Chamber of Commerce’s Economic and Business Forecasting Center, said the economic volatilities faced by the US and Europe could cause the world economy to grow only 2% next year instead of 3-4 per cent as earlier expected.

He said the stronger baht would have an adverse impact on Thailand’s exports, which are forecast to grow only 8 per cent against 10-13 per cent as previously projected.

Simultaneously, global oil prices are likely to surge to US$100 per barrel. Given these factors, Thailand’s gross domestic product (GDP) is expected to grow around 4 per cent. Local consumption and tourism are expected to serve as major driving forces in place of exports for economic growth.

Because of this, Thanawat said, the Bank of Thailand needs to intervene in the baht movement, come up with a tax measure to stem speculation, encourage investment overseas, and help small- and medium-size enterprises (SMEs) affected by the baht surge.

Dr Thanawat said SMEs need to adjust themselves to the changing business environment. They must closely assess business risks, take advantage of new technology for production, as well as try to understand and catch up with market trends. (MCOT online news)

http://www.mcot.net/cfcustom/cache_page/134961.html

[Admin]

Thai baht gains to slow pace in 2011 
: 5 Jan 2011
source: Bloomberg.com

Thailand's Baht May Underperform in 2011 on Capital Curbs, Aberdeen Says Thailand´s baht, Asia´s third-biggest gainer in 2010, will strengthen at a slower pace than regional currencies this year as regulators curb inflows, Aberdeen Asset Management Ltd. said.

Policy makers may limit gains to about 3.8 percent in the next six months, said Pongtharin Sapayanon, head of fixed income in Bangkok for Aberdeen, which manages $281.6 billion globally.

The median estimate in a Bloomberg survey is for a gain of 1.9 percent in the first half and 3.7 percent in 2011, a smaller advance than for the currencies of South Korea, the Philippines, China and India.

The baht´s 11 percent advance last year prompted the central bank to remove a 15 percent tax exemption for foreigners on income from domestic bonds in October.

South Korea and Taiwan have also tightened capital control measures as the U.S. Federal Reserve´s bond purchases made more funds available for investment in higher-yielding assets.

"We are definitely expecting the underperformance of the Thai baht relative to Asian peers such as South Korea´s won and the Singapore dollar," Pongtharin said.

"If it once again outperforms in Asia, it´s likely that the Bank of Thailand will impose other measures to stem that appreciation, probably targeting the fixed-income market once again."

http://www.bloomberg.com/news/2011-01-05/top-stories-business-and-finance.html

[Admin]

'Yuan appreciation will not affect baht' 
Bangkok Post: 8 Jan 2011
CURRENCY
Prasarn: Yuan appreciation will not affect baht

China's plan to allow the yuan to appreciate by as much as 5% this year will not place much pressure on the baht to appreciate in 2011, say economists.

Prasarn Trairatvorakul, the central bank governor, said gains in the baht had considerably exceeded the appreciation of the yuan in the past year or so.

``Regional currencies have close ties with the yuan and their trade is increasingly linked. The yuan appreciated slightly last year, while the baht and the Malay sia ringgit strengthened considerably. As a result, the baht is likely to appreciate less this year,'' Dr Prasarn said.

However, he acknowledged the baht could be more volatile in line with the weak recovery outlook in the United States and Europe's fiscal crisis this year. Analysts expect Thailand's gains from exports will continue to register a surplus and act as an underlying factor for further baht appreciation.

The baht was the region's strongest currency, appreciating by 10% against the dollar and 7% on a trade-weighted basis in 2010. China allowed the yuan to appreciate by 3% against the greenback last year. The yuan weakened by 7% on a trade-weighted basis with other currencies.

Beijing plans to continuously introduce monetary tightening measures including increasing banks' reserve requirement ratios and interest rates to decrease lending and stem pressure on consumer and asset prices induced by the US Federal Reserve's loose monetary policy.

Dr Prasarn said a slowdown in the Chinese economy could have a more tangible impact on the economy. Demand outside the G3 economies _ the United States, Japan and the European Union _ has been increasing in recent years and grew by 20% in 2010 with a 10% share in total exports.

But Thailand's economic fundamentals remain satisfactory. The slower growth projection is due in part to a higher base this year, he said.

The Finance Ministry's plan to cut the budget deficit in fiscal year 2012 would be healthy for the economy be cause public debt as a percentage of the economy would decrease, he said.

Wellian Wiranto, an economist with HSBC, forecast economic growth of 5.3% this year with exports, domestic consumption and foreign direct investment supporting factors.

``The domestic economy proved immune to the fallout of the April-May political unrest last year, particularly private consumption,'' he said.

``Consumer confidence has rebounded, aided by robust employment and low inflation.''

http://www.bangkokpost.com/business/economics/215031/prasarn-yuan-appreciation-will-not-affect-baht
 

[Admin]

Thai baht weakens to lowest in five months 
Bangkok Post: 11 Jan 2011
SET dives as baht weakens

The Thai stock market plunged by more than 20 points, or two per cent, on Monday afternoon following a continuous sell-off by foreign investors, as the baht weakened to 30.70/75 baht per US dollar, the lowest in five months.

Stock analysts said foreign investors had started taking out their profits in face of the baht's depreciation.

The Stock Exchange of Thailand (SET) composite index closed at 1,018.03 points, down 18.42 points or 1.78 per cent, on today's trading session. The trade value was 46.11 billion baht.

Soybean and Rice Bran Oil Processors Association chairman Vichit Vitayatanagorn said bottles of soybean cooking oil are rapidly disappearing from retailers' shelves after the government approved an increase in the price of palm cooking oil from 38 to 47 baht for a one litre bottle last week.

"Some department stores don't limit purchases, allowing customers to hoard cooking oil products," Mr Vichit said.

"However, production capacity remains the same, and the quantity of cooking oil products delivered to department stores has not changed."

He said 70 per cent of consumers buy palm cooking oil and about 28 per cent buy soybean oil.

The number of people buying soybean oil would increase if the price of palm oil is higher than soybean oil, he said.

Internal Trade Department director-general Vatcharee Vimuktayon said the government will not intervene and will allow the market mechanism to run its course.

Mrs Vatcharee said if people believe products were being hoarded or sold at unrealistic prices they can report it to her department on the 1569 hotline.

Real Estate Information Centre director-general Samma Kitsin said the real estate sector is hopeful the domestic market will be on the upswing in the first half of this year, but is concerned that the price of construction materials will increase.

Mr Samma said the confidence index of business operators towards the overall economy and the real estate market for the first six months of 2011 rose to 68.7 per cent. The index previously stood at 65.6 per cent.

The confidence index of real estate firms listed in the stock market stood at 74.7 per cent, higher than other unlisted companies at 62.7 per cent.

"Most businesses don't expect any major political events or violence like last year, but they are worried about the likely increase in the price of construction materials because the wholesale price index in this area in 2010 rose two per cent year-on-year," he said.

The price of steel, wood, electrical and plumbing equipment and other construction items had gone up last year.

He said the retail price of cement dropped eight per cent in 2010, but would likely increase later this year.


http://www.bangkokpost.com/business/economics/215352/falling-stocks-baht-weakens

[nookiebear]

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

[garytaffy]

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