Baht What up with Dat?????

nkstan wrote:It is the overall trend that we should be hedging our position against,which,IMO,is a continuing of the baht to strengthen against Western currencies!

bumper wrote:Mr Korn, speaking at an event marking the 13th anniversary of the float of the baht during the 1997 economic crisis, said the crisis offered critical lessons about the dangers of excessive debt for policymakers, companies and the public.

BUSINESS »


SECOND-HALF ECONOMY
Higher inflation seen despite relief steps
By The Nation
Published on July 3, 2010

Bank of Thailand (BOT) forecasted the inflation rate in the second half might be accelerated despite the extended period of the government's costofliving relieving measure to the year end.
Bandid Nijathaworn, deputy governor of BOT, said yesterday that the inflation rate in the second half of this year is still likely to accelerate though the government has extended a sixmonth period for relieving the cost of living measures until the end of this year, resulting from inflating other factors.

However, Monetary Policy Committee meeting on July 14 will consider many factors such as forecast on inflation rate and economic growth in the next period in determining its interest policy rate, not just current inflation.

Inflation rate in June rose by 3.3 per cent yearonyear, resulting in a 3.5 per cent growth rate of inflation on average in the first six months.

Electricity Generating Authority of Thailand (EGAT) yesterday also the costofliving relieving measures might affect on funds raising for investment in the long term.

EGAT Governor Suthat Pattamasiriwat said that one of measures - the fixed fuel tariff (FT) rate - though it would not affect on the authority's finance status in the short term, it was likely to affect its credit rating when to be raised for new investments in the long run.

EGAT is expected to bare Bt6 billion in expenditures derived from the fixed FT rate until the end of the year following the government's populist policy to relieve the cost of living.

Finance Minister Korn Chatikavanij yesterday said that the cost of living relieving measure would not affect the country's fiscal stability in both long and short terms.

He added that it is apparent that the government would be able to collect tax revenue of total over Bt200 billion in this fiscal 2010 year, which means the country would experience budget deficit this year at only Bt100 billion.

Meanwhile, Sathit Limpongpan, secretarypermanent for Finance Ministry, commented on the budget spending of the government on populist policy yesterday that it would not affect much on the fiscal status.

He said the government's populist policy has so far helped for spending on water, electricity, railway and bus fares to lowerincome earners, not all people. If the government would spend more budget on additional helps, it would not affected much on fiscal status. Public debt is now 42 per cent of gross domestic product (GDP), which is not exceeding 60 per cent as targeted.

The Federation of Thai Industries (FTI) is concerned about the uncertain financial problems of Thailand's major importers, especially in Europe; the fragile domestic political situation; and exchangerate fluctuations. These factors may have major negative impacts on the economy in the second half of the year.

Vice chairman Tanit Sorat said yesterday the financial problems were the main cause of concern. The group is also keeping an eye on the economic recovery in the US and Japan.

As to fluctuations in the currency exchange rate, if the baht appreciates in the second half of the year it will have an impact on the export sector. So, the central bank's handling of the rate is important.

The FTI has paid less attention to the political situation as the unrest in April and May had little impact on the industrial sector as the global market was recovering. The only sector that remains weak is tourism. The average occupancy rate of hotels in Thailand is now 30 per cent.

Although toning down the political impact on the economy in the second half, the government must assure foreign investors and tourists about investing and travelling in Thailand. The government should actively promote tourism.

The automotive industry is now expected to turn out 1.7 million units this year, up from the previous estimate of 1.4 million units. The average utilisation rate in all industries' production is around 75 per cent compared with 6165 per cent in 2009. These show that industries, which are the real engine of the country's economy, remain strong, Tanit said.

Prasarn: RP rate to be raised to 2%

* Published: 7/07/2010 at 10:06 AM
* Online news: Breakingnews

The repurchase rate would be gradually increased from the current 1.25 per cent to 2 per cent within the end of this year, newly appointed governor of the Bank of Thailand (BoT) Prasarn Trairatvorakul said on Wednesday morning.

“I believe the policy rate would be raised from August. The central bank’s monetary policy committee will oversee the key rate to prevent negative impact on the money market”, Mr Prasarn said.

He praised the central bank for its ability to effectively curb the baht value from too much fluctuating over the past five years, saying the Thai currency was not too strong when compares to other currencies in the region.

The professional banker said as BoT governor, he is duty-bound to ensure stability of the economic and monetary systems in order to enhance economic expansion.

The new BoT chief expected the economy to grow by four per cent to six per cent this year.

Mr Prasarn had resigned as president of Kasikornbank Plc and his resignation will take effect from July 15.

Key policy rate raised by 0.25%

* Published: 14/07/2010 at 02:40 PM
* Online news: Breakingnews

The monetary Policy Committee has raised the repurchase rate from 1.25 per cent to 1.50 per cent because the economy is likely to expand at a greater rate than the previous projection of 4.3-5.8 per cent, reports said.

The policy rate was also increased to curb the inflation rate which is likely climb above the set target of 0.5 per cent to 3 per cent, the central bank said.

http://www.bangkokpost.com/breakingnews ... ed-by-0-25

arjay wrote:Well, the BOT has just raised the "Repurchase Rate" up by 0.25%

..... The monetary Policy Committee has raised the repurchase rate from 1.25 per cent to 1.50 per cent because the economy is likely to expand at a greater rate than the previous projection of 4.3-5.8 per cent, reports said.

The policy rate was also increased to curb the inflation rate which is likely climb above the set target of 0.5 per cent to 3 per cent, the central bank said....

£ is still rising though.

http://www.bot.or.th/ENGLISH/MONETARYPO ... olicy.aspx

The Bank of Thailand (BoT) has revised up this year's projection for Thailand's gross domestic product (GDP) to 6.5 to 7.5 per cent from its April's forecast of 4.3 per cent to 5.8 per cent.

According to BoT's assistant governor for Monetary Policy Group, Paiboon Kittisrikangwan the BoT also adjusted its core inflation rate (food,energy excluded) projection to 0.5 to 1.3 per cent, from the previous projection of 1 to 2 per cent.

The Nation

The Thai baht had its best weekly performance against the dollar in five months after Finance Minister Korn Chatikavanij said on Aug. 4 that Southeast Asia’s biggest economy may expand as much as 8 percent in 2010, more than a June estimate of a maximum 6 percent.

Thailand’s central bank also indicated policy makers may add to the first increase in borrowing costs in almost two years, boosting the attraction of holding baht. “The economy has recovered well, so there is no need to use low interest rates,” Governor Tarisa Watanagase said this week.

The baht rose 0.7 percent in the five days to 32.06 per dollar and touched 32.03, a level not seen since May 2008.

Thailand’s “growth forecast was quite impressive, and there is more room for stocks to rise,” said Paisarn Lertkowit, a currency trader at Bangkok Bank Pcl, the country’s biggest lender. “When you compare this with other regions, only Asia has a pretty impressive growth outlook.”

http://www.bloomberg.com/news/2010-08-0 ... funds.html