Baht What up with Dat?????

bumper wrote:.... another aspect that bothers me we have been told about the huge cash reserves Thailand has, yet it is borrowing from the World Bank and ASEAN.....

http://www.bangkokpost.com/breakingnews/193276/us-fed-eyes-aggressive-steps

nkstan wrote:Continuing down,31.24 to USD!

bumper wrote:Good thought sometimes I think we forget this isn't just numbers, people are getting hurt.

Baht may hit 13-year high on fund inflows
By THE NATION, BLOOMBERG

Thailand has witnessed a continued increase in net capital inflows, expected to keep the baht on the appreciation path probably to a level unseen since 1997.

According to the Bank of Thailand, in July, net capital inflows were worth US$2.7 billion (Bt84 billion), which went to all parts of the economy, including $987 million to non-bank business.

Mathee Supapong, director of the central bank's domestic economy department, said inflows to the non-bank sector were either foreign direct investment or investment in the stock market. The banking sector attracted only $571 million, mostly short-term financing and some as investment in banking shares through the stock market.

London-based Barclays predicts that the baht may strengthen to levels not seen since 1997 over the next year as accelerating growth encourages foreign investors to keep pouring money into the nation's assets.

The baht could appreciate 1 per cent to 31 per US dollar over three months, 1.8 per cent to 30.75 in six months and 2.6 per cent to 30.50 in a year, Singapore-based economist Rahul Bajoria wrote in a research report. In January, the bank forecast that the baht would advance to 31.75 in a year.

"We expect the baht to enjoy continued trend appreciation, as the external position remains robust," Bajoria wrote. "Strong inflows into local-currency bond and equity markets, along with current-account surpluses, should generate further upward pressure on the currency."

Last month, the baht advanced 3.2 per cent, its biggest monthly gain since February 2008. According to Bloomberg, it advanced to 31.29 per dollar.

"There will be more willingness on the part of the central bank to let the currency appreciate," Bajoria said. "The appreciation is going to be in line with regional currencies, so it's not going to harm the competitiveness of the external sector."

Mathee said the Bank of Thailand had no specific level where the baht would go, but would maintain equilibrium with regional movements. This should limit negative impacts on exporters.

The currency drew support from government data showing that growth in gross domestic product in the first two quarters, at 12 per cent and 9.1 per cent, was the best since 1995.

According to the Bank of Thailand, the economy in July kept expanding, though at a slower rate than in the previous month. While private consumption, exports and manufacturing slowed because of sharp growth in the first half, tourism showed continued recovery. In the month, Thailand welcomed 1.25 million visitors, up 14.9 per cent year on year, while the hotel occupancy rate stayed at 46.9 per cent compared with 37.3 per cent in the previous month.

Private investment rose 22.1 per cent year on year, mostly in the electronics, electric-appliance, automobile and construction sectors. Private consumption rose 5.1 per cent on-year, while exports at $15.48 billion rose 21.2 per cent. Industrial manufacturing expanded 16.3 per cent, down from 21.9 per cent in June. Inflation in the month accelerated on higher fresh-food prices and higher industrial and retail employment.

The central bank is widely expected to raise the policy rate again next month to 2 per cent.


-- The Nation 2010-09-01

Breakingnews » Breakingnews
BoT: New baht controls 'unneeded'

* Published: 1/09/2010 at 03:55 PM
* Online news: Economics

The baht's current appreciation is in line with the country’s strong economic fundamentals and additional measures to curb its strength are not necessary, Bank of Thailand (BoT) governor Tarisa Wattanagase said on Wednesday.

“The currencies of all other countries in Asia are also strengthening, not only the Thai currency. But the central bank is ready to oversee the value of the baht to prevent it from fluctuating too much,” Mrs Tarisa said.

She was confident the public sector would be able to adjust and survive the strong baht.

Asked about Prime Minister Abhisit Vejjajiva's calling of a meeting of the Council of Economic Ministers at 7am tomorrow to discuss the baht situation, the BoT chief said she was ready to provide information on the central bank's decisions and the details of recent foreign capital inflows..

Mrs Tarisa stressed that the BoT is duty-bound to curb the baht's fluctuation, but it could not fix the Thai currency’s exchange rate at a certain level. The baht's movement depends on demand and supply in the money market.

“This means that if the Thai economy is strong, more foreign capital will flow in and this results in the baht's appreciation,” she said.

She admitted that the baht's strengthening was too rapid, from 3.5 per cent due to the political unrest to 6.4 per cent in June,.

However, current capital inflow was not mainly for profit speculation. Investors wanted the higher rate of return, which was normal.

The same thing was happening in other countries in Asian region, not only in Thailand, she said.