Comments on: Currency : BOT intervenes to support THB

By: James

James — Fri, 20 Jun 2008 16:49:56 +0000

The world looks to be skating on thin ice… I really want to invest in Thailand more but I’m seeing inflation and the cut in subsidies and what they are doing to developers and it’s not looking good at all.

By: thaicrisis

thaicrisis — Fri, 20 Jun 2008 15:19:21 +0000

Nope. And it sounds far fetched indeed. Let’s say with an annual inflation rate of 6, plus rate at 3.75 (we could forecast 2×0.25 hikes from the BOT just for the show)… 9.75 ? Surreal indeed. Today.

I mean next year… seems so far away. The black swan of inflation could become even “blacker”.

However, we can’t deny that there is a pressure upward.

And already, some investors are loosing patience (read this article :”Bond investors are proving less patient with India, Thailand and the Philippines, markets where yields will continue to rise on worries about fiscal…”

http://uk.reuters.com/article/managerViews/idUKORM62743420080616)

By: fall

fall — Fri, 20 Jun 2008 14:51:10 +0000

I heard next year government bond will be inflation + (rate). Sound kinda unreal. Did you also heard of something like this?

By: Seizhin

Seizhin — Fri, 20 Jun 2008 11:23:51 +0000

Too much problem from in Thailand from the Thais.
First PAD’s selfish request, followed by a bad government and now is the inflation rate.

By: thaicrisis

thaicrisis — Fri, 20 Jun 2008 08:13:49 +0000

Why not. But the real problem is the bonds.

http://thaicrisis.wordpress.com/2007/12/21/currency-management-bot-lost-228-billions-thb-since-2006-and-has-a-debt-of-2-trillions

The BOT issued mountains of bonds to “sterilize” the flows of dollars in Thailand.

That’s a long term problem : because they need to pay interests.

Anyway : we should have in july the financial report of the BOT for 2007.
http://www.bot.or.th/English/AboutBOT/FinancialReports/Annual/Pages/Year.aspx

It’s going to be tasty, because it will cover a full year of “currency management”.

By: hobby

hobby — Fri, 20 Jun 2008 07:51:44 +0000

Looks like BOT might be making a profit now, if they bought USD at 31, and are now selling at 33

By: Real-Time: Another Bangkok D-Day

Real-Time: Another Bangkok D-Day — Fri, 20 Jun 2008 07:08:12 +0000

[...] BoT Fights for Baht: Thailand Crisis reports that the Bank of Thailand intervened again in the foreign exchange market to halt the [...]

By: thaicrisis

thaicrisis — Fri, 20 Jun 2008 06:47:01 +0000

Well… I don’t really like the word “gloomy”. I try to stick to what I prefer to call “common sense”.

Overall, if you peruse my blog since one year…. well I was good. I mean I was really good !

I was right on many political issues (look at the current situation today, with PAD rallyes, the country is totally blocked and polarized).

As for the economy, right too : with inflation, with the currency issue etc.

I had one thing wrong : exports. Last year, when the THB was increasing, I really thought that exports would suffer a lot. It didn’t happen.

Anyway. As for the “1997 deja vu” feeling. Here too I don’t really agree. The cause of crisis, from my point of view, are differents and much more powerful.

1997 was if I may say a very classic economic crisis, like in a text book : overinvestment (from condo to industry), overvalued currency, a strong peg on the currency,… the mixing was perfect.

Today it’s more complicated, and it’s really different (it’s not explained in the books, this is why people are so lost).

By: Klip "Sheikh" Springer

Klip "Sheikh" Springer — Fri, 20 Jun 2008 06:35:38 +0000

hmm interesting stuff in your blog. looks incredibly gloomy…
sense of dejavu after 1997???