reader Posted April 6, 2017 Posted April 6, 2017 Depending on where your funds originate, this may be of interest particularly for US ex-pats and visitors. From Bloomberg News Thailand is no stranger when it comes to hot money. This time around, officials have a new dynamic to worry about when it comes to cooling inflows from abroad: Donald Trump. The Southeast Asian nation has seen $3.42 billion flood in this year, an influx that’s driven the baht to its highest since mid-2015. The problem is that any overt steps to curb gains in the exchange rate could draw the attention of Trump administration officials probing trading partners for measures that contribute to U.S. trade deficits. The current dilemma is a contrast with the years of Federal Reserve quantitative easing, when Thailand and other emerging markets took steps to slow capital inflows that made their exports less competitive. Ensuring against U.S. retaliation may mean either living with the baht gains or coming up with steps not linked to currency transactions. “Any easing back on foreign-exchange intervention by the BOT could result in further near-term baht strength, in the absence of any meaningful pick up in outflows,” Khoon Goh, Singapore-based head of Asia research at Australia & New Zealand Banking Group Ltd. said Tuesday. “They are worried about baht appreciation. Cutting supply of short-term bills probably won’t have much of an effect.” Thailand chalked up the 11th largest goods trade surplus with the U.S. in 2016, according to data on the U.S. Department of Commerce website. It continued to post a current-account surplus in the first two months of this year after a record 2016 while the foreign-exchange reserves rose 5.2 percent to $181 billion, a sign the BOT has bought dollars to stem baht gains. https://www.bloomberg.com/news/articles/2017-04-05/thailand-gets-that-hot-money-feeling-but-inflow-curbs-are-tough Quote
