BoT moves to cool down baht

[reader]

From Bangkok Post

The Bank of Thailand has further eased rules to encourage more capital outflows by allowing a greater number of retail investors to directly put money into overseas securities. The move is part of efforts to reign in the stronger baht.

 

The latest relaxation of capital outflows came shortly after the central bank announced a further easing of related regulations by increasing the cap for agents to send money overseas to 800,000 baht a day per customer, up from 200,000, retroactively coming into effect from Jan 12, 2018.

 

https://www.bangkokpost.com/business/finance/1406142/bot-eases-capital-outflow-rules-to-cool-down-baht

[santosh108]

I hope the above measures work to cool down the baht.  In less than a year, the cost of my time in Thailand has gone up over 10%.  Of course with all the isolationist actions the present US government is taking, the efforts of the Thai government may not be enough to halt the slide of the U.S. dollar vs. the baht!!!

[reader]

Of course with all the isolationist actions the present US government is taking, the efforts of the Thai government may not be enough to halt the slide of the U.S. dollar vs. the baht!!!

 

No, but the spike in interest rates should boost the dollar. The 10-treasury bond hit a 4-year high yesterday, closing at 2.84%.

[santosh108]

Great!  Hope springs eternal!

[Guest]

Data from the last few decades show currencies can move all over the place.

 

One  correct response is to configure our affairs to reduce sensitivity to exchange rate movements.     

 

What actually happens is people spend a lot of time talking about adverse movements & speculating on where exchange rates are moving next.   You have about a 50% chance of getting the direction of movement right in the short term, but these random movements seem to be a hot discussion topic.

  

However, most still show very little interest in discussing what to do to reduce the impact of currency fluctuation.  

 

I've never understood this.   People are more interested in discussing what they cannot control than what they can.

[reader]

From Bloomberg News

 

Thailand may be run by a military government but that’s not stopping its currency appearing to be the ultimate haven asset.

 

Thai baht implied volatilities are the lowest of any free-floating currency in the world and Thailand’s current-account surplus stood at more than 10 percent of its GDP in the third quarter.

 

The country’s foreign-exchange reserves increased to a record in January, while it’s much less exposed to overseas investors than regional peers -- foreign ownership of its government bonds stood at around 16 percent at the end of December, lower than the 29 percent figure in Malaysia at the same time, and the 41 percent in Indonesia at the start of February.

 

[traveller123]

Reading those statistics I will be a long time waiting for the GBP/Baht exchange rate getting back to 50 and 70 is fantasy land

[reader]

From Bloomberg News

 

Thailand’s central bank left its benchmark interest rate unchanged near a record low, while forecasting inflation will pick up and return to the target range next quarter.

 

Monetary policy committee members voted unanimously to hold the one-day bond repurchase rate at 1.5 percent, where it’s been since 2015, according to a Bank of Thailand statement on its website on Wednesday. The decision was predicted by all economists in a Bloomberg survey.

 

The Bank of Thailand, which has missed its inflation target of 1 percent to 4 percent in the past three years, is grappling with a stronger currency that’s limiting price gains and posing a threat to the nation’s exports, one of the main drivers of growth. The baht has gained more than 11 percent in the past 12 months, among the best performers in Asia.

 

 

 

https://www.bloomberg.com/news/articles/2018-02-14/thailand-holds-key-rate-to-support-growth-momentum-as-baht-gains

[reader]

From Bangkok Post

 

A seasonal downturn in the baht driven by dividend outflows and a lack of tourists could be worse than usual this year amid rising global bond yields and less liquidity, according to Kasikornbank.

 

A dropoff in tourists after the Songkran festival in mid-April and payouts to foreign stock investors usually spell declines for the currency in May. Last year was the first time the baht managed to rally in that month since 2009.

 

Rising developed-market bond yields and the gradual winding down of stimulus by the European Central Bank could prompt overseas investors to rebalance their portfolios away from emerging markets like Thailand, said Kobsidthi Silpachai, head of capital market research at Kasikornbank.

 

“The baht may see bigger downward pressure this year than usual,” he said. “Many clients are asking about this dividend season, while exporters are hoping for some light at the end of the tunnel.”

 

A decline in the baht may provide some relief to exporters who have complained about an 11% rally against the dollar over the last 12 months. Some 87 billion baht ($2.8 billion) of stock dividends will be paid out to non-resident investors in April and May this year, Kasikornbank estimates.

 

If the dollar rises beyond its 50-day moving average against the baht, that could open the way for the Thai currency to test its support area between the March 2 low at 31.587 and the 31.638 trough on Feb 22. Beyond that, the next support lies at the low of 31.957 reached on Feb 9.
 

The currency traded at 31.4172 to the US dollar at 6pm on Monday.
 

https://www.bangkokpost.com/business/news/1443458/cruellest-month-for-baht-could-be-worse-than-usual-this-year

 

[ggobkk]

I've experienced  17 to 20% negative change over the past few years.  I then realize the change has been harder on my British friends who also have to deal with Brexit undermining the pound to baht rate.  

 

From reader's posting above, things will balance a bit better in May.  Wait and see.

[Guest abang1961]

Despite the minor changes in the exchange rate, my expenditure in Thailand remained the same during my visit which ended last week.  I used almost the same per-day-average as in my previous trips.  I believe prices of clothes and shoes in Thailand had more or less stabilised in the past two years.  But who knows what will happen - we will only see it clearer after the Trump-Kim meeting in May.