The Exchange Rate Drama is unfolding. And some lala businessmen are crying like babies.
Thailand’s exports are unlikely to achieve 10% growth next year if the government leaves the baht’s appreciation unchecked, exporters warn.
“Ongoing baht strength will harm Thai shipments and weaken our competitiveness,” said Pornsil Patchrintanakul, deputy secretary-general of the Board of Trade.
Mr Pornsil was one of a group of leading executives from more than 50 trade associations who on Monday met with Veerasak Jinarat, the vice-minister for Commerce.
The baht, quoted Monday at 33.35 to the US dollar, is currently trading at a 14-month high and is up 4.4% since January.
Exporters said the baht has appreciated significantly faster against the dollar than competing currencies such as the Chinese yuan or the Vietnamese dong, hurting Thailand’s trade competitiveness. (Bangkok Post)
Who is Mister Pornsil ? A guy who has a very simple view of business : rewards and no risks.
His only ability to sell something outside Thailand is to rely -not on merit, talent, intelligence, better products, courage and why not luck-… but on cheap currency.
In the ideal and lala world of Pornsil, international trade would be someting like that :
-Hello mister foreign buyer. I sell to you 1 kilo of rice, 1 t-shirt and 1 air conditioner… let’s see total cost 200 USD… Special price for you. I will get 252453456533 millions THB thanks to the exchange rate. It’s magic. Yeah that will do. I could buy 17333 condos for my daughter, my nephew, my maid and mia noi. And maybe 6536 BMW cars. Pink color. Okay khrap ?
When the USD – which is the only currency that matters as far as exports are concerned (read my article here)- when the USD is falling… then small fry people like Pornsil start to freak out.
Not even 1 minute, Pornsil is able to think that a lower USD will lower the huge oil bill Thailand has to pay every month, and the bills for many other raw materials and parts imported. And therefore, will lower the costs of many businesses… Hence, the costs of exporters !
I mean it’s Economy 101. Minus 101 should I say. First grade school level. But obviously, it’s too complicated for Pornsil’s 2 neurons brain.
Furthermore, Pornsil is unable to understand that if his pathetic export company is selling less It’s not because another country can give a better price thanks to a better exchange rate… But instead, because DEMAND (solvent demand) HAS BEEN REDUCED… The crisis, hello ? The recession ? Oh my god… I forgot that Abhisit told us that the economic crisis was over. My mistake. One point for Pornsil.
Again, it’s way too complicated for all those clowns.
Last but no least, I would like to refresh your memory, with a (now) famous statement from Tarisa, our dear BOT governor. January 2009. Like an eternity away.
“Comparing the baht against the dollar does not represent the whole picture.”
Cheers Tarisa. You’re a winner.