Is the Thai Baht manupilated

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Is the Thai Baht manupilated

Post by Twixies » December 28, 2018, 6:19 pm

As a specialist in economy. What happen today??????

Seen it so many times every time Thailand is going to show data

Look at this picture today, when all the figures went out(Export/Import and so on)

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Re: Is the Thai Baht manupilated

Post by Giggle » December 28, 2018, 7:20 pm

Check out the drops at the end/beginning of the months -- and the predictable annual dive during the month of April.

Manipulated? Nah, it's completely coincidental.

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Re: Is the Thai Baht manupilated

Post by JimboPSM » December 29, 2018, 12:26 pm

Re the dramatic movement:

While I rarely monitor intraday movements (for my purposes, the noise in intraday charts renders them almost useless), I happened to look at the USD/THB intraday movements a few hours after the initial major drop because I had noticed unusual movements in the actual published exchange rates of commercial banks in Thailand.

The drop was that dramatic that I searched to find what its cause might be – however, I could find nothing of any consequence that could have created that instantaneous degree of movement.

As I could find nothing of consequence, my suspicions were aroused that it might be some kind of rogue event unrelated to any economic or geopolitical inputs; a rapid check of a number of intraday charts increasingly indicated that my suspicions were probably correct – while there was replication of the movement in some, there was an absence of its replication in others (the movement would have been replicated in all of them if there had been a substantive basis to the major drop).

The result of this was that, because of absence of any other form of confirmatory data, in all probability it was some form of data feed glitch.

However, I still had reservations that the movement might have some basis in fact because the feed had not been suspended – that was unusual!

While data feed glitches are not uncommon, I can’t remember one of such a long duration where the feeds weren’t suspended pretty promptly after the occurrence of the glitches – I suspect that whoever was supposed to be monitoring the integrity of the data feeds might have been suffering from a seasonal hangover.

Whatever the glitch was, it took about seven hours before it was sorted and returned to a semblance of normality (as can be seen in the time period of the “U” shaped element of the chart in the OP.

What remains a concern to me is how, what I believe to probably be a feed glitch, could possibly have made its way into the actual published exchange rates of commercial banks in Thailand - it is hard not to conclude that those responsible for verifying and signing off exchange rate changes must have been AWOL or asleep at the wheel. :shock:

Re the overvaluation of the THB:

In my opinion the THB is overvalued.

Although I have an estimate of its overvaluation it is only indicative, not authoritative, as I don’t have the information and resources to properly separate its constituent parts.

The last time I did some work on the overvaluation of the THB was mid November; my “estimate” then was that since the start of July 2014 there had been an overvaluation of the THB in the region of 25%.

I use the term “estimate” advisedly as, while it is mathematically deduced from the percentage movement of the USD/THB rate compared to the percentage movement of the US Dollar Index over the same period of time, it includes constituent parts that would probably be excluded in a more precise calculation.

Additionally, while the mathematics of my estimate may be correct, the result can only be as correct as the data and sources used and I am far from convinced that the sources, parameters and mathematics behind the US Dollar indexes are sufficiently robust and, although it may be counterintuitive, sufficiently flexible to accommodate the current state of chaos.

Please note that this does not mean that I'm convinced that the US Dollar Index needs to be changed; there have been instances in the past where the US Dollar Index has not been fully reflective of the international value of the USD but it self corrects with the passage of time and a return to a semblance normality.

However, it is important to note that while I believe that the THB is overvalued, there are government and other forces at play in the US that claim that the THB is undervalued!

The claim would appear to be “correct” according to the “formula” that is being used, the criteria of the formula are as follows:
If any of the U.S. trade partners meets the standards of the “1988 Act”, the Treasury Department must conduct an enhanced analysis. The three assessment criteria are:

1. A significant bilateral trade surplus with the United States is one that is at least $20 billion.

2. A material current account surplus is one that is at least 3 percent of gross domestic product (GDP).

3. Persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly and total at least 2 percent of an economy’s GDP over a 12-month period.

When a country meets all three specified criteria, the U.S. labels it as a currency manipulator and the U.S. shall try to solve this via bilateral negotiations (Act of 1988).
These articles provide some further background on that claim:

My view, without any confirmatory research, is that a formula (from forty years ago) that indicates that the THB is undervalued today would probably not stand up to detailed scrutiny - the really big threat to expats is that the formula could be used to "legitimise" further strengthening of the THB against the USD.

My suspicion is that the original formula was reverse engineered to provide the answer to whatever the political agenda was of its proponents at that time.

Those familiar with the Machiavellian nature of politics will recognise this as a ploy that is in common use with politicians around the world in furthering their own agendas (and, for some, in feathering their own nests).

Ashamed to be English since 23rd June 2016 when England voted for racism (and economic suicide)

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Re: Is the Thai Baht manupilated

Post by Twixies » December 29, 2018, 1:05 pm

As always JimboPSM. Thank you so much for the explanation :D

But if true with 25% overvalued, how comes the current account with over $200 bill to be true. Dont they have to use of all this billions to support it. I do know back in 1997 the was publishing a current account so big and when IMF wants the money the say they didn't have them. Could this be similarly this time then

add. And who is controlling them about all the figures coming out

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