Once welcomed with garlands, Thailand's coup makers are rapidly losing their popularity. The generals and the interim government they support have gone from blunder to blunder, a list that is growing embarrassingly long. The resignation on Wednesday of Deputy Prime Minister and Finance Minister Pridiyathorn Devakula is the latest setback.
Far from being the authoritarian ogre once dutifully denounced by Western governments, Thailand's military-installed government appears instead to be too soft and rapidly losing its way.
The robust support it once enjoyed domestically from mainly urban circles is withering, as those who earlier viewed last year's September 19 coup as the only option to remove entrenched former prime minister Thaksin Shinawatra become increasingly restless amid a series of botched political and economic moves.
Wednesday's surprise resignation of Deputy Prime Minister and Finance Minister Pridiyathorn Devakula represents the latest lurch that has undermined domestic and foreign confidence in the interim government's stability.
Pridiyathorn was the military government's chief economic lieutenant and widely viewed as the architect of the government's controversial December 19 decision to impose capital controls on certain types of foreign investments to curb appreciation of the baht, a contrarian move that caused a record single-day drop on the Thai bourse.
He also sent a series of confusing signals to foreign investors when revealing tentative government plans to amend the Foreign Business Act, including legal changes to foreigner investors' ability to use local nominees in structuring their Thailand-based investments that raised concerns that the government could eventually expropriate certain types of foreign investments.
Full Story: Asia Times Online
Thai coup makers losing their grip
Thai coup makers losing their grip
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
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The understudy
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Mr. Bugksida
Here's another reason why Mr. Pridiyatorn Devakula resigned. The Sondhi Limptongkul's View of things. The Man who claims to had ousted Thaksin.
The only probable reason why Mr. Devakula left the Govt. is as an evonomist he know in the next one or two months time Thailands economy is going down south fast and he wants to leave the ships as early has he can and hits out his former Captain or PM Sorayudh Chulanond with a full Broadside barrage of critism of his handling of foreign financial situation. Speaking of which The current Dollar Baht rate looks pretty Grimm in deed. with 1$ = 33.18 Baht there's more concern of the Thai econnomy more than ever. Once the Dollar hits below the 30 Baht Thailand could be headed into another recession in the imediate Future.
There are prety darn intersting times ahead for this yea,
Here's another reason why Mr. Pridiyatorn Devakula resigned. The Sondhi Limptongkul's View of things. The Man who claims to had ousted Thaksin.
The only probable reason why Mr. Devakula left the Govt. is as an evonomist he know in the next one or two months time Thailands economy is going down south fast and he wants to leave the ships as early has he can and hits out his former Captain or PM Sorayudh Chulanond with a full Broadside barrage of critism of his handling of foreign financial situation. Speaking of which The current Dollar Baht rate looks pretty Grimm in deed. with 1$ = 33.18 Baht there's more concern of the Thai econnomy more than ever. Once the Dollar hits below the 30 Baht Thailand could be headed into another recession in the imediate Future.
There are prety darn intersting times ahead for this yea,
In Love with Hua Hin since 19naughty9 and it ain't fading!!!
(My fable for All Things Japanese knows no boundaries!) Proud Student of Stamford University Hua Hin Campus from 1999 to 2004 (5th Batch of Graduates.)
“Once you survive Stamford U Hua Hin Campus only you can survive anything!!!”
(My fable for All Things Japanese knows no boundaries!) Proud Student of Stamford University Hua Hin Campus from 1999 to 2004 (5th Batch of Graduates.)
“Once you survive Stamford U Hua Hin Campus only you can survive anything!!!”
I know, he owns the publication I quoted the article from. I actually also predicted this would happen to the economy a couple of months ago ... hence my views on property investment and the "current political climate".The understudy wrote:Mr. Bugksida
Here's another reason why Mr. Pridiyatorn Devakula resigned. The Sondhi Limptongkul's View of things. The Man who claims to had ousted Thaksin.
Lets hope for better times.
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
My thoughts entirely! A friend of mine bought Baht back home in the UK for 63 baht to the pound compared with 69 to the pound you can get here. The baht is getting stronger but the economy weaker. Weird!PJG wrote:Can anybody please explain why with all the Financial uncertainty why the value of the Baht is going from strength to strength. Surely with the present problems and the recent interest rate reduction it means that the Baht is fundamentally overvalued and is heading for a devaluation as in 1998.
This is from the Nation a couple of weeks ago, and is supposed to explain the two tier exchange system, I haven’t got much spare time today, so maybe someone can try to understand how it works!
Due to the withholding requirement, the Thai foreign-exchange market has been divided into two tiers, in which the baht in the offshore market is stronger than the baht in the onshore market by about Bt1 to Bt2.
Some dealers have recently warned that speculators would finally find loopholes to arbitrage the difference of the Thai currency value. Suchada agrees.
"It won't be good to leave the two-tier market for too long. People will eventually find a chance to arbitrage. For example, there might be over-invoicing of exports. They will finally find ways to get baht liquidity into their accounts," she said.
The withholding measure has encouraged the two-tier market, as speculators cannot get baht from the onshore one. Yesterday the baht opened onshore at 35.75-35.79, closing at 35.78-35.80. Offshore, the unit was 34.10-34.20 to the greenback late in the evening.
For example, a profit-seeker would like to speculate for a stronger baht and also take a profit in the Thai stock market. They do a swap transaction by selling dollars for baht in the offshore market with a foreign financial institution that has baht liquidity in a non-resident deposit account. Then they invest in the Thai stock market. Once the swap is due, they have to sell stocks to get baht liquidity and then sell it for dollars to settle the swap agreement. But they do not want to sell Thai stocks and wish to roll over the swap contract.
They need to find baht liquidity somewhere else to roll the contract over. They have to find baht liquidity offshore from another foreign financial institution which has baht, as the 30-per-cent withholding measure discourages them from doing it in the onshore spot market.
With so many doing the same thing, baht liquidity in offshore markets has dried up, resulting in the appreciation of the currency offshore.
Yesterday, Suchart Sakkankosone, director of the central bank's Exchange Control and Credits Department, said the money in non-resident accounts had declined by about Bt2 billion to Bt3 billion over the past couple of days. The bank is examining where the funds have gone.
Due to the withholding requirement, the Thai foreign-exchange market has been divided into two tiers, in which the baht in the offshore market is stronger than the baht in the onshore market by about Bt1 to Bt2.
Some dealers have recently warned that speculators would finally find loopholes to arbitrage the difference of the Thai currency value. Suchada agrees.
"It won't be good to leave the two-tier market for too long. People will eventually find a chance to arbitrage. For example, there might be over-invoicing of exports. They will finally find ways to get baht liquidity into their accounts," she said.
The withholding measure has encouraged the two-tier market, as speculators cannot get baht from the onshore one. Yesterday the baht opened onshore at 35.75-35.79, closing at 35.78-35.80. Offshore, the unit was 34.10-34.20 to the greenback late in the evening.
For example, a profit-seeker would like to speculate for a stronger baht and also take a profit in the Thai stock market. They do a swap transaction by selling dollars for baht in the offshore market with a foreign financial institution that has baht liquidity in a non-resident deposit account. Then they invest in the Thai stock market. Once the swap is due, they have to sell stocks to get baht liquidity and then sell it for dollars to settle the swap agreement. But they do not want to sell Thai stocks and wish to roll over the swap contract.
They need to find baht liquidity somewhere else to roll the contract over. They have to find baht liquidity offshore from another foreign financial institution which has baht, as the 30-per-cent withholding measure discourages them from doing it in the onshore spot market.
With so many doing the same thing, baht liquidity in offshore markets has dried up, resulting in the appreciation of the currency offshore.
Yesterday, Suchart Sakkankosone, director of the central bank's Exchange Control and Credits Department, said the money in non-resident accounts had declined by about Bt2 billion to Bt3 billion over the past couple of days. The bank is examining where the funds have gone.
That explains why the Baht is so strong for Offshore trading. I was quoted a rate just above 60 to the GBP. The Siam Commercial Bank is quoting around 69 for T/T transfers. Surely a difference in Onshore and Offshore rates of 15% is unsustainable and is a receipe for disaster for the economy. My brokers in London are advising to halt all payments in Thai Baht until the situation becomes clearer. My business is small buying around GBP6000 per month from Thai Companies but if you multiply up it is clear that the consequences for the Thai economy are dire. Indeed many in my field of trading are switching production to India and China.
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Guess
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In my 7 years here I have always understood that the mean rate against a basket of G8 currencies should work out at 65 Baht to 1 PST. My experience has shown that that figure is quite accurate. Two years ago I arrange for a transfer of about 500,000 Baht when a 66 mean rate was being posted in exchanges. The transfer was delayed due to the sloth like actions of my broker and when I got the money cleared in the Bank of Bangkok I only got 62. The lowest I have seen in 7 years. One thing that has changed since then is the rise in value of both the the Euro and the PST with a notable decline in the USD.caller wrote:I have just transferred some money to LOS from the UK, the exchange rate at about 16.15 on 1.3.07 (this afternoon here), was 64.4 baht to GBP. The lowest ever. Can't be doing much good for thai exports?
The acid test is to compare with the Swiss Franc. I think you may well find that the Baht has not fluctuated over the last five years as much as it may have seemed. As for exports from Thailand are concerned, they are mostly long term arrangements and it would require a sustained period of Baht strength to have a noticeable effect. However, imminent foreign investment may suffer.
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Hi Guess,
I understand what you are saying and from your previous posts, I understand you have worked in the money industry. But forget the rest of the G whatever if you can? As a humble soul with many years travelling and exchanging the Thai Baht against the UK pound, both in LOS and the UK (best avoided), for this simple soul, its the worst its ever been!
Who's responsible?
I understand what you are saying and from your previous posts, I understand you have worked in the money industry. But forget the rest of the G whatever if you can? As a humble soul with many years travelling and exchanging the Thai Baht against the UK pound, both in LOS and the UK (best avoided), for this simple soul, its the worst its ever been!
Who's responsible?
Talk is cheap
I hope you are aware when you transfer money from the UK T/T you send the money in pounds so that you get the exchange rate from a Thai bank - not the UK bank which is always substantially lower, but is currently even lower. You can save a huge amount of money doing this.caller wrote:I have just transferred some money to LOS from the UK, the exchange rate at about 16.15 on 1.3.07 (this afternoon here), was 64.4 baht to GBP. The lowest ever. Can't be doing much good for thai exports?
