More Gogo for Your Buck??

[x in pattaya]

I found the following comment on the Pattaya Addicts message board. While it sounds nice if you're buying baht, I assume it's illogical because the government doesn't have that much control over the exchange rate unless they decide to abandon the free market mechanisms and declare a fixed rate against the dollar. Possibly not a very sound way to go about managing the economy. Other countries, especially in the region, would hardly be pleased or acquiescent and it would just inflate the cost of imports which would be more generally inflationary and hardly popular, although maybe less unpopular than unemployment in the export & tourist industries.

The rumour/gossip didn't mention any level, so I suppose it could just be a target range that the BOT would try to aim for.

I think the prime minister just negotiated a massive Japanese government loan to finance more public transport. Presumably any plans to devalue the currency immediately following a loan agreement like this would seem dubious, unless it was already factored in.

Keep in mind that Pattaya Addicts message board is largely populated by straights, and we all know what ill-informed rumour mongers they can be.
Of course, just because something makes no sense and would likely have a host of unintended consequences, doesn't mean it won't be tried.

Anyone hear anything about this or have any (intelligent) comments?


Watch your favourite exchange rates website and see the rates against the Baht soar pretty soon
Sources are saying that the Thai Prime Minister has just got back from a meeting in Switzerland, that discussed the credit crunch, and that it was recommended that the Baht be devalued to head off a recession in Thailand
No links as such, but i have it from a reliable Thai that it WILL happen
I certainly hope so !!!!!

Hedonist

http://www.pattaya-addicts.com/forum/Pr ... 34118.html (http://www.pattaya-addicts.com/forum/Prediction-Time-t34118.html)

[jimnbkk]

Now you tell me!! I sent my money to SCB yesterday for my upcoming trip. I got 34.48 Baht per dollar.

I think the prime minister just negotiated a massive Japanese government loan to finance more public transport. Presumably any plans to devalue the currency immediately following a loan agreement like this would seem dubious, unless it was already factored in.
I imagine the Japanese would be smart enough to have the loan denominated in Yen.

I think the prime minister just negotiated a massive Japanese government loan to finance more public transport. Presumably any plans to devalue the currency immediately following a loan agreement like this would seem dubious, unless it was already factored in.
I imagine the Japanese would be smart enough to have the loan denominated in Yen.

Given that the capital items and senior management will probably all be provided from Japan the "loan" is actually just the financing of a sale.

[x in pattaya]

I think the prime minister just negotiated a massive Japanese government loan to finance more public transport. Presumably any plans to devalue the currency immediately following a loan agreement like this would seem dubious, unless it was already factored in.
I imagine the Japanese would be smart enough to have the loan denominated in Yen.

Exactly, but would local costs in baht ... primarily labor ... have been based on the current exchange rate? I suppose it would take into account a fluctuating exchange rate and payment would be determined by actual costs... although major construction project in Thailand (and everywhere else for that matter) tend to have a certain amount of leakage in funding.



Given that the capital items and senior management will probably all be provided from Japan the "loan" is actually just the financing of a sale.

Yes, you're right. The major part of the loan is probably going to be paid to Japanese companies and management.

[pong]

no, the major JPnese part is meant to pay for the trains, signalisation and other ''hardware''-from Kawasaki and consorts-so we can get the same nice situation as in the metro=rot faay fa taay din, where the german trains and jpnese signals led to 1 crash (early morning-no passengers-a train coming off depot) and several other near mishaps. That is/was also the reason why the BTS-extension took so long to get service-now announced for may coming. The next largest portion is for the Thai hardware-concrete, more cement, iron and steel etc-for the viadcuts. That concrete factory with the red elefant is a major bribing goal. (and has probably ore as few ministers as shareholders). Labour cost is relatively insignificant. The big gains though come from those holding land along the new lines and building new cndo's/apartmts etc-in JPN they tax for that-a pretty sound idea.

[x in pattaya]

Labour cost is relatively insignificant.

It is not insignificant politically.

I regret adding the comment on the Japanese loan and the fact that the major component is going for Japanese hardware.That was intended as a comment on the probability that the PM would almost simultaneously be implementing a devaluation policy.

The point of presumed interest to most of us is whether the government actually intends to try to devalue the baht and if so will it be through BOT manipulation with target range or will it be by resorting to pegged rates. I understand that it might seem appealing to the government and to those of us who exist on foreign based income, but I wonder if it's realistic and do-able.

[aussie_]

Now you tell me!! I sent my money to SCB yesterday for my upcoming trip. I got 34.48 Baht per dollar.

I have just returned from Thailand to Australia and at best was getting 23 baht per Australian dollar on my recent visit compared to over 30 baht to the dollar a year ago when we were closer to the US exchange rate.

[MARK]

Sorry guys this is far to complicated for me to follow, told you I was a simple man, does this mean I can put my prices up?. or should I Wait for this. :old:

[x in pattaya]

does this mean I can put my prices up?.

Only for tourists... including visitors from Bangkok or Hua Hin.

[quote="x in pattaya":3akcipxk]
I think the prime minister just negotiated a massive Japanese government loan to finance more public transport. Presumably any plans to devalue the currency immediately following a loan agreement like this would seem dubious, unless it was already factored in.
I imagine the Japanese would be smart enough to have the loan denominated in Yen.

Exactly, but would local costs in baht ... primarily labor ... have been based on the current exchange rate? .....[/quote:3akcipxk]

Most parties to large international transactions would use currency futures markets to hedge against any kind of currency moves. Currency/commodity markets are not just for speculators. This is the actual reason for their existence.

The bhat devaluation is probably more an attempt to goose Thai exports.

BTW the bhat continues to fall vs the US $. Its now 35 compared to about 29-30 this time last year. :cheers: