Gaybutton Posted February 23, 2008 Posted February 23, 2008 The rates referred to in the article below are bank rates. The actual exchange rate is even worse. The exchange rates at closing time on Friday were: US Dollar: 32.11 Euro: 47.51 British Pound: 63.03 Australian Dollar: 29.48 Canadian Dollar: 31.5375 The following appears in THE NATION: _____ Baht Hits Another High Against US$ The baht rose relentlessly to a new historic high yesterday, reaching Bt32.30 against the greenback amid fears of a US recession and exporters' concern over the abolishment of capital controls. Published on February 23, 2008 The Bank of Thailand (BOT) said it was continuing to intervene in forex markets to stabilise the baht and the Kingdom's competitiveness remained unchanged as it was moving in line with other currencies in the region. The baht opened at Bt32.45 to Bt32.46 against the US dollar and strengthened throughout the day's trading to close at a peak of Bt32.30 to Bt32.31 despite intervention from the central bank, dealers said. A forex dealer at BankThai said the baht's appreciation was due mainly to the weakening of the dollar after US economic data announced on Wednesday showed negative signs. In particular, the growth of US gross domestic product (GDP) this year is expected to be lower than earlier forecast. She expects the baht to strengthen to around Bt32 to Bt32.40 in the coming week on pressure from the US currency and economy and said investors should follow the signal from the Monetary Policy Committee meeting next week. If the country's policy rate is lowered in line with the US Federal Reserve's recent cut, this will also affect the baht, she said. Meanwhile, a dealer at Bangkok Bank said exporters were continuing to sell dollars as they expected the currency to weaken further due to the negative economic outlook in the US. BOT assistant governor Suchada Kirakul said the central bank had already taken into account a US recession in its economic projections for a worst-case scenario. She urged exporters, importers and debtors to hedge their exposure as the baht could fluctuate from capital flows into the region. "They should manage their risk, because the currency will not move in just one direction. When it is weak, it could strengthen, and when it appreciates, it could depreciate," she said. The US Federal Reserve cut its economic-growth projection for this year from 1.8-2.5 per cent to 1.3-2 per cent due to the sub-prime crisis, credit crunch and rising oil price. The world's largest economy is also worried about surges in inflation and unemployment. It revised upward the inflation projection from 1.7-1.9 per cent to 2-2.2 per cent. The baht strengthened last week due to capital inflows into the stock market, and panicked exporters worried about possible revocation of the withholding reserve requirement. "It was a psychological effect; exporters panicked over the news that the withholding reserve requirement would be removed," said Suchada. As a result, the baht surged by more than 1 per cent on February 14 and 15. As of February 15, the country's net international reserves totalled US$117.6 billion (Bt3.8 trillion), up $1.7 billion from a week earlier. The baht has risen 4.27 per cent against the dollar this year. The Thai unit appreciated 11.59 per cent against the greenback during 2007, compared with 10.92 per cent for the yen, 9.67 per cent for the ringgit and 9.05 per cent for the Singaporean dollar. Suchada said the market should compare the baht not only against the US dollar but against other currencies too. The country has not yet lost its competitiveness, she insisted. However, according to the BOT's data, the nominal effective exchange rate (NEER) stood at 78.06 in January compared with 77.78 in December, which indicates that the Kingdom's competitiveness has declined. Finance Minister Surapong Suebwonglee is confident that the recent spikes in oil prices will not hurt Thailand's 2008 GDP. "The GDP growth rate of 4.5-5 per cent is based on conservative assumptions," he said yesterday. "However, if the upward movement continues, we may need to review the figures," he said. Oil prices have risen above $100 per barrel on fears that the US economy will suffer a blow from the sub-prime mortgage crisis and the entire world will be affected by the spill-over effects. On the 30-per-cent capital-reserve requirement, Surapong said that if the BOT's data was complete, the ministry was ready to immediately make a decision whether to maintain or abolish the measure. The central bank is scheduled to submit the required data within the next two weeks. Anoma Srisukkasem, Wichit Chaitrong, Somruedi Banchongduang The Nation Quote
Gaybutton Posted February 23, 2008 Author Posted February 23, 2008 Ongoing Volatility for Thai Stocks; Baht Stronger Against Dollar BANGKOK, Feb 23 (TNA) The Stock Exchange of Thailand (SET) index edged marginally upward this week from a week ago is expected to move with some volatility next week while the Thai currency, the baht, is expected to continue strengthening against the greenback after advancing to a 10-and-a-half-year high, according to a report issued by Kasikorn Research Center. The report said the SET composite index, which closed at 826.86 points on Friday, up 0.03 per cent from a week ago, is anticipated to move unpredictably next week as most investors are awaiting earnings results and dividend payments for listed corporations for 2007. Also, investors are waiting for Thailand's gross domestic product (GDP) figures for the fourth quarter of 2007, a monetary policy meeting of the Bank of Thailand and key economic data for January, it said. Investors are also closely monitoring US economic data, especially in the property sector, the GDP for last year's fourth quarter and the movement of global oil prices, the report said. According to Kasikorn Research Center, the support level for the SET index next week is between 785-816 points and resistance level at 844-860 points. The Thai baht closed at Bt32.29 against the dollar on the onshore market on Friday, and the report said the Thai currency is expected to continue strengthening against the greenback to around Bt32.15-32.30 next week. Traders are watching the government's policy which would end the 30 per cent foreign capital reserve requirement, the selling of dollars by exporters and movements of the dollar which depend on several important US economic data including housing sales and purchase orders for durable goods, according to the report. Liquidity in the local market is projected to remain tight next week as commercial banks must submit their fortnightly reserve requirements to the Bank of Thailand on Tuesday, even as they must also prepare for expected huge withdrawals by customers at the end of the month, it added. (TNA)-E111 Quote
