The Bank of Thailand (BoT) stated on Monday, September 8, that it is considering measures to mitigate the impact of gold prices on the baht.
The BoT added that the strength of the Thai currency was due to the weakness of the dollar and the rise in the price of precious metals.
The central bank has not detailed the measures it plans to put in place, but has specified that they aim to reduce the volatility of the baht.
This Tuesday, September 9 at 8:00 (Thai time) 1 euro is worth 37.27 bahts and 1 US dollar is worth 31.66 bahts.
See: Thai Baht THB exchange rate
See also:
The Bank of Thailand will limit daily transfers to 50,000 bahts
Thailand: a baht too strong and insecurity weigh on tourism
Thailand: the rise of the baht threatens exports and tourism
Source : Bangkok Post
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1 comment
Reduce the volatility of the baht?
OK, but in which direction?
Does the Central Bank of Thailand intend to set a stable exchange rate against gold and other currencies?
Should we fear an even stronger baht, and thus see the price of gold decrease and cost less to buy for Thais?… but also thus decrease the value of the central bank's gold reserves against the national currency!
Will we witness a strong intervention by the Bank that would decrease the key interest rate by half to 1 point, which should cause (and again, given previous experiences, it's not certain) a shock at the level of the Stock Exchange and a fall in the baht that could again be exchanged around 39 to 40 baht for 1 euro. ?
Or another approach? A Thai secret trick?
Without explanations from Thai financial experts, we remain in a fog that is not artistic and that maintains a tension that is not profitable for anyone!!!
It remains to be seen whether the financial machinery that would be put in place could bear fruit in the long term, after a possible media "shot in the arm" on international stock exchanges and financial markets to stabilize the baht at a rate that would allow Thailand's economy and trade balance to relaunch on the export market and manage the impact of taxes imposed by the United States on all products exported to the States and the loss of revenue for the Thai state from the removal of import taxes on the majority of American products arriving on the Thai consumer market.
I don't want to be a bird of bad omen, but I believe that Thailand's margin of intervention in the face of international markets to stabilize its currency is very narrow and that any miscalculated, misjudged false maneuver could lead to an even more dramatic situation by plunging the Thai population and all foreign residents into growing uncertainty in the face of possible worrying inflation and declining purchasing power…
If the Thai Central Bank does not give more details on its intentions, it's because there are good reasons: does it want to avoid possible panic and retaliation in the form of protectionist measures from financial actors who blow hot and cold on stock markets?
All that's left to do is wait, biting one's toenails, for the content of the upcoming decisions…
All attempts to stabilize the baht since the Covid era have failed!!!
Another stab in the water or a new damp squib ???