Thai Economy Weakens, With a Twist: The Baht’s Too Strong
We’re a long way from 1997, but it’s fair to wonder how long the currency can defy the pull toward a slowdown.
https://www.bloomberg.com/opinion/artic ... too-strong
Tj
Thai economy and baht .....Bloomberg
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travelerjim1
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Gaybutton
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Re: Thai economy and baht .....Bloomberg
Meanwhile, today the baht got slightly stronger.
https://www.scb.co.th/en/personal-banki ... tml#fxrate
https://www.scb.co.th/en/personal-banki ... tml#fxrate
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belg0001
Re: Thai economy and baht .....Bloomberg
1 euro in now under 34 Bth…… I really don't know if I will come in February, my budget becomes a problem…..
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Gaybutton
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Re: Thai economy and baht .....Bloomberg
Committee calls for action against strong baht to improve economic performance
Sep 04, 2019
The office of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is concerned by the performance of the Thai economy in the second half of 2019.
The office fears that the lack of stimulating factors and an ever-stronger baht may lead to lower economic expansion than previously targeted.
JSCCIB President Preedee Daochai, told the press today (September 4) that the Thai economy in the second half of 2019 remains in a weak condition as seen from shrinking exports across all sectors except gold. “As a result, we are seeing a slowed expansion in industrial manufacturing, investment and private consumption,” he said. “Although tourism is increasing compared to last year, that’s partly due to last year’s base being rather low.”
Preedee added that the Thai economy in the rest of the year will be under a lot of pressure from various factors. “The strained global economy due to the US-China trade war will continue to affect us, as well as the trade dispute between Korea and Japan, Brexit issues and the stronger baht. These factors will slow down our exports and possibly tourism in the rest of 2019.”
Meanwhile, domestic consumption is likely to be affected by drought and the floods in the North and Northeast, he added.
“The government’s economic stimulus package and crop price guarantee policy may help a bit, but these policies usually take time before we can see substantial economic impact,” said Preecha.
“JSCCIB is concerned that a lack of stimulating factors and [as well as] the stronger baht may eventually lead to lower-than-expected economic expansion in 2019,” he said. “Moreover, if the US Federal Bank decides to reduce interest rates further, it will adversely affect Thailand’s competitive advantage in exports and investment. Therefore, the government must take care of the problem of the strong baht as soon as possible.”
Meanwhile, Suphan Mongkolsuthee, president of the Federation of Thai Industries, said the baht has risen by around 10 per cent since the beginning of this year.
“The baht has appreciated 14 per cent against the Korean won and 10 per cent against the Chinese yuan, which has essentially reduced our overall competitive advantage in the region,” he said.
Hence, he said, the central bank should work with the Finance and Treasury Committee appointed by the Deputy PM Somkid Jatusripitak, the SEC and representatives from private sectors to come up with measures to alleviate the effects of the stronger baht.
Also, president of the Thai Chamber of Commerce Kalin Sarasin said there were several ways of solving the problem of the strong baht.
“For instance, the government can promote the use of the baht in international trade instead of the US dollar, especially with neighbouring countries,” he said. “We also need to boost cross-border trade to attract more foreign investment, especially across the Thai-Myanmar Friendship Bridge in Tak’s Mae Sot district.”
https://www.nationthailand.com/news/30375825
Sep 04, 2019
The office of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is concerned by the performance of the Thai economy in the second half of 2019.
The office fears that the lack of stimulating factors and an ever-stronger baht may lead to lower economic expansion than previously targeted.
JSCCIB President Preedee Daochai, told the press today (September 4) that the Thai economy in the second half of 2019 remains in a weak condition as seen from shrinking exports across all sectors except gold. “As a result, we are seeing a slowed expansion in industrial manufacturing, investment and private consumption,” he said. “Although tourism is increasing compared to last year, that’s partly due to last year’s base being rather low.”
Preedee added that the Thai economy in the rest of the year will be under a lot of pressure from various factors. “The strained global economy due to the US-China trade war will continue to affect us, as well as the trade dispute between Korea and Japan, Brexit issues and the stronger baht. These factors will slow down our exports and possibly tourism in the rest of 2019.”
Meanwhile, domestic consumption is likely to be affected by drought and the floods in the North and Northeast, he added.
“The government’s economic stimulus package and crop price guarantee policy may help a bit, but these policies usually take time before we can see substantial economic impact,” said Preecha.
“JSCCIB is concerned that a lack of stimulating factors and [as well as] the stronger baht may eventually lead to lower-than-expected economic expansion in 2019,” he said. “Moreover, if the US Federal Bank decides to reduce interest rates further, it will adversely affect Thailand’s competitive advantage in exports and investment. Therefore, the government must take care of the problem of the strong baht as soon as possible.”
Meanwhile, Suphan Mongkolsuthee, president of the Federation of Thai Industries, said the baht has risen by around 10 per cent since the beginning of this year.
“The baht has appreciated 14 per cent against the Korean won and 10 per cent against the Chinese yuan, which has essentially reduced our overall competitive advantage in the region,” he said.
Hence, he said, the central bank should work with the Finance and Treasury Committee appointed by the Deputy PM Somkid Jatusripitak, the SEC and representatives from private sectors to come up with measures to alleviate the effects of the stronger baht.
Also, president of the Thai Chamber of Commerce Kalin Sarasin said there were several ways of solving the problem of the strong baht.
“For instance, the government can promote the use of the baht in international trade instead of the US dollar, especially with neighbouring countries,” he said. “We also need to boost cross-border trade to attract more foreign investment, especially across the Thai-Myanmar Friendship Bridge in Tak’s Mae Sot district.”
https://www.nationthailand.com/news/30375825
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Gaybutton
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Re: Thai economy and baht .....Bloomberg
Panel urges further baht measures
Rate cut fails to stop local currency's gain
5 Sep 2019
The private sector has made a renewed push for the central bank to contain the baht's rapid gain after a recent 25-basis-point cut of the policy rate had almost no effect on the local currency relative to regional peers.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) called on policymakers, the Bank of Thailand and the Finance Ministry to limit the baht's strength quickly to maintain the country's competitive edge, Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said after Wednesday's monthly meeting.
The policy rate cut has not stopped the baht's appreciation, which is taking a toll on exports, tourism and foreign direct investment, Mr Supant said.
"Additional measures may be needed to cope with the stronger baht," he said. "Those measures include imposing a withholding tax, outbound investment promotion and tapering the bond supply. These are ultimately the regulators' decisions."
In the year to date, the baht is 10% and 14% stronger than the Chinese yuan and South Korean won, respectively, while the Vietnamese dong has been stable versus the US dollar.
The baht has surged by about 6% against the greenback this year, making it the best-performing currency in Asia.
According to the Bank of Thailand's Monetary Policy Committee minutes for the meeting on Aug 7, there was concern that the baht's gain relative to trading partners' currencies could affect the economy to a larger degree amid intensifying trade tensions.
The central bank started to rein in short-term offshore fund inflows by reducing its new short-term bond supply.
It then stepped up efforts by lowering the cap on the outstanding balance of non-resident accounts from 300 million baht per person to 200 million baht and requiring a report with the names of end beneficiaries for all non-resident holdings of Thai debt securities.
Mr Supant said the private sector is gathering data from businesses on the baht appreciation's effects for further discussion with regulators.
The baht is expected to continue strengthening if the US Federal Reserve further eases its monetary policy as anticipated.
The JSCCIB wants to take part in a fiscal and monetary committee initiated by Deputy Prime Minister Somkid Jatusripitak to help policymakers seek ways to boost the economy, Mr Supant said.
Predee Daochai, chairman of the Thai Bankers' Association, said the firmer baht will dampen the country's competitiveness amid the slowing economy and the ongoing trade spat between the US and China.
Thailand's economic growth is likely to come in lower than the JSCCIB's current forecast range of 2.9-3.3%, he said. The joint committee is set to trim the economic and export growth estimates again at October's meeting.
The JSCCIB predicts the country's outbound shipments this year to perform in a band of 1% contraction to 1% growth.
The joint committee said economic momentum in July likely remained sluggish, as seen by the contraction in exports if gold is stripped out.
Domestic consumption was still tepid in July, while investment was stable.
The government's stimulus package could offset impacts from negative factors surrounding Thailand, but it will take time for the government's planned measures to attract foreign relocations, the panel said.
Meanwhile, Thai Chamber of Commerce chairman Kalin Sarasin said business operators have managed to tackle foreign exchange risks by themselves through baht settlement on intra-Asian trade, especially with Cambodia, Laos, Myanmar, Vietnam and Australia.
https://www.bangkokpost.com/business/17 ... t-measures
Rate cut fails to stop local currency's gain
5 Sep 2019
The private sector has made a renewed push for the central bank to contain the baht's rapid gain after a recent 25-basis-point cut of the policy rate had almost no effect on the local currency relative to regional peers.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) called on policymakers, the Bank of Thailand and the Finance Ministry to limit the baht's strength quickly to maintain the country's competitive edge, Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said after Wednesday's monthly meeting.
The policy rate cut has not stopped the baht's appreciation, which is taking a toll on exports, tourism and foreign direct investment, Mr Supant said.
"Additional measures may be needed to cope with the stronger baht," he said. "Those measures include imposing a withholding tax, outbound investment promotion and tapering the bond supply. These are ultimately the regulators' decisions."
In the year to date, the baht is 10% and 14% stronger than the Chinese yuan and South Korean won, respectively, while the Vietnamese dong has been stable versus the US dollar.
The baht has surged by about 6% against the greenback this year, making it the best-performing currency in Asia.
According to the Bank of Thailand's Monetary Policy Committee minutes for the meeting on Aug 7, there was concern that the baht's gain relative to trading partners' currencies could affect the economy to a larger degree amid intensifying trade tensions.
The central bank started to rein in short-term offshore fund inflows by reducing its new short-term bond supply.
It then stepped up efforts by lowering the cap on the outstanding balance of non-resident accounts from 300 million baht per person to 200 million baht and requiring a report with the names of end beneficiaries for all non-resident holdings of Thai debt securities.
Mr Supant said the private sector is gathering data from businesses on the baht appreciation's effects for further discussion with regulators.
The baht is expected to continue strengthening if the US Federal Reserve further eases its monetary policy as anticipated.
The JSCCIB wants to take part in a fiscal and monetary committee initiated by Deputy Prime Minister Somkid Jatusripitak to help policymakers seek ways to boost the economy, Mr Supant said.
Predee Daochai, chairman of the Thai Bankers' Association, said the firmer baht will dampen the country's competitiveness amid the slowing economy and the ongoing trade spat between the US and China.
Thailand's economic growth is likely to come in lower than the JSCCIB's current forecast range of 2.9-3.3%, he said. The joint committee is set to trim the economic and export growth estimates again at October's meeting.
The JSCCIB predicts the country's outbound shipments this year to perform in a band of 1% contraction to 1% growth.
The joint committee said economic momentum in July likely remained sluggish, as seen by the contraction in exports if gold is stripped out.
Domestic consumption was still tepid in July, while investment was stable.
The government's stimulus package could offset impacts from negative factors surrounding Thailand, but it will take time for the government's planned measures to attract foreign relocations, the panel said.
Meanwhile, Thai Chamber of Commerce chairman Kalin Sarasin said business operators have managed to tackle foreign exchange risks by themselves through baht settlement on intra-Asian trade, especially with Cambodia, Laos, Myanmar, Vietnam and Australia.
https://www.bangkokpost.com/business/17 ... t-measures