Thai central bank says ready to curb resilient baht if needed

By Kitiphong Thaichareon and Orathai Sriring

BANGKOK (Reuters) – Thailand’s central bank is still concerned about the strength of the baht and is ready to take further action if necessary, a deputy central bank governor said on Tuesday.

The baht’s gains have been driven by the country’s large current account surplus, and not speculation in the currency, Mathee Supapongse told a news briefing.

“We have a lot of weapons ready, but there is no speculation from foreign investors yet,” he said, adding the central bank was monitoring the market closely.

As Asia’s best performing currency in 2019, the baht rose nearly 9% against the dollar, putting more pressure on the export-dependent economy amid global trade tensions and markets are concerned the authorities will introduce capital controls, among other steps.

The baht traded at 30.24 per U.S. dollar at 0510 GMT.

Rising international reserves show the Bank of Thailand (BOT) has closely managed the baht by buying dollars, Mathee said. The reserves increased by $ 18 billion to $ 223 billion in 2019.

“If the BOT had not intervened, the reserves would not have risen and the baht may have been stronger than this,” he said.

But the central bank is mindful of side-effects and limitations of currency intervention, as it may face trade protagonist measures from other countries, he said.

On Monday, the U.S. Treasury said Thailand was close to triggering thresholds to be added to its currency monitoring list.

Mathee also said quantitative easing was not suitable for Thailand due to very high liquidity and it would largely benefit certain business groups.

The central bank will further relax rules to spur outbound investment to help ease upward pressure on the baht, he said.

Last year, the BOT introduced steps against short-term speculative inflows and relaxed rules to spur fund outflows in a bid to curb the baht’s strength.

In November, the central bank said within the next three months the limit exporters can keep proceeds abroad will be raised to $ 1 million per lading bill from $ 200,000 currently. Such proceeds account for about 80% of all exports.

While the baht’s appreciation has affected the economy by hurting export competitiveness, it has benefited importers and companies and individuals with foreign debt, he added.

The central bank has forecast Southeast Asia’s second-largest economy will expand 2.8% this year after growing by an estimated 2.5% in 2019, a five-year low.

(GRAPHIC: Thailand’s GDP, exports and consumption – https://fingfx.thomsonreuters.com/gfx/mkt/13/367/367/Thailand’s%20GDP,%20exports%20and%20consumption.png)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

EU official: Technical Brexit extension not needed from EU side

It would matter if the deal passes parliament

It’s not clear if a full legal text will be ready on Saturday or just a political declaration. If the text isn’t done it makes a deal less likely because members of the ERG said they won’t support it. However if it passes anyway, there may not be enough time to get it done and/or to implement a deal.

The EU is saying here is that business could continue as normal until that’s worked out and that the deal would go into place when it’s ready.

ForexLive

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

Argentina Treasury minister resigns, says ‘significant renewal’ needed amid economic crisis

By Eliana Raszewski

BUENOS AIRES (Reuters) – Argentina’s Treasury Minister Nicolas Dujovne has resigned, saying in a letter seen by Reuters on Saturday he believed the government needed “significant renewal” in its economic team amid a crisis which saw the peso plunge this week.

Dujovne said in a letter to Argentine President Mauricio Macri that he had given his all to the job, helped tame a significant deficit and trim public spending but conceded: “Mistakes have been made, without a doubt.”

“I believe my resignation is in keeping with my place in a government… that listens to the people and acts accordingly,” he added. 

Macri has appointed Hernan Lacunza , the current economy minister for Buenos Aires province, as Dujovne’s replacement, a government source told Reuters. 

(Reporting Eliana Raszewski; writing by Aislinn Laing; Editing by Marguerita Choy)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

Fed's George says wait-and-see approach needed for policy

Fed's George says wait-and-see approach needed for policy Fed’s George says wait-and-see approach needed for policy

NEW YORK (Reuters) – The U.S. economy faces "notable" risks and the Fed can take a wait-and-see approach to monetary policy, Kansas City Federal Reserve Bank President Esther George said on Wednesday.

"Over the medium term, I see the biggest risk coming from slower growth abroad, particularly in China, the euro area, and the United Kingdom," George said in prepared remarks at an event in New York.

George said the U.S. economy’s fundamentals still appeared sound and that job growth would likely rebound from a weak performance in February.

"Downside risks are notable however as my outlook calls for growth to slow to trend, with moderating job gains and low inflation," she said. "In these circumstances, monetary policy can take a wait-and-see approach."

George said she supported the Fed’s plans to conduct a review of monetary policy strategy this year. She said some proposed changes to its framework had merits, including proposals for the Fed to commit to making up for years of below-target inflation.

At the same time, she listed a number of reasons why such a framework might not work or could even do harm to the economy.

"I see both fundamental and practical issues to grapple with in moving to such regimes," George said.

However, George said it might be reasonable for the Fed to allow "even somewhat persistent" deviations from its 2 percent inflation target.

"If they are limited to, say 50 basis points above or below the objective (they) may be acceptable, depending on broader economic conditions," George said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Economy News