became a hot topic When the US Federal Reserve (Fed) raised interest rates by 0.75% to 3.00–3.25%, in line with what gurus and analysts had predicted.
became a hot topic
When the US Federal Reserve (Fed) raised interest rates by 0.75% to 3.00–3.25%, in line with what gurus and analysts had predicted.
But the key point that creates a shock
It became when the Fed signaled to continue raising interest rates throughout the next year.
It is expected to rise to 4.60% and maintain a high interest rate policy until 2024 to successfully control inflation.
Regardless of whether the economy will slow down, contrary to those market players who expect
Next year, the Fed will gradually cut interest rates.
Causing the global financial market to immediately turmoil
Major currencies have depreciated sharply!!!
This can be seen from the British pound.
The weakest in 37 years, the Japanese yen.
The weakest in 24 years. The euro has weakened in 20 years. The South Korean won has weakened in 14 years, while the Indian rupee.
and the Indonesian Rupiah
The weakest on record
The Thai baht
move in the direction of the global currency
depreciated to 37.45 baht per US dollar.
It was the weakest in 16 years.
Impact on major currencies around the world
This was due to the Fed raising interest rates.
with further pointing out that interest rates must continue to rise
causing global investment flows to return to the US
to receive higher returns
Investors flock to sell other currencies.
to buy US dollars instead
stopping the flow
One of the reasons for the depreciation of money is
The central bank could raise interest rates following the Fed.
to attract investments or use a currency intervention method
This was seen as soon as the Fed raised interest rates.
central bank of switzerland
and the Bank of England
has announced an interest rate hike immediately
Bank of Japan
not raise interest
But throwing money to intervene in the yen instead.
For this reason, at the Monetary Policy Committee (MPC) meeting of Thailand on September 28, 2022, most analysts considered
The MPC will raise interest rates by 0.25% to 1.0%, following the next two rounds of MPC meetings this year, which are expected to raise rates by 0.25% each to help prevent the baht from weakening too much.
At the same time, the Bank of Thailand (BOT) can also use other mechanisms to control the inflow of money, such as limiting the amount of money invested abroad by Thai people.
Which is contrary to the baht appreciation period that the Bank of Thailand announced to allow Thai people to invest in foreign countries without limits.
to help reduce the appreciation of the baht
with another strong current
In the event that the government expresses its stance that the baht will appreciate no more than 35 baht per US dollar
Fear of repeating the Tom Yum Kung crisis in 1997, ready for the Ministry of Finance to discuss with the Bank of Thailand
First of all, I must say
Conservative monetary policy
But looking back in 1997, the Thai private sector had a lot of foreign debt.
when the economic crisis
therefore unable to pay the debt
and the debt was recalled until bankruptcy
spread to commercial banks and Thai financial institutions
who is a guarantor of debt, has been intervened by the authorities or increases the registered capital
In addition, during that time
Thailand maintains the Thai baht exchange rate at 25 baht per US dollar.
When being speculated on the currency, the Bank of Thailand has to go in and support it.
Intervene the currency at 25 baht per US dollar.
until the reserve funds run out
In addition, there is another debt burden. When the Bank of Thailand encounters a loss, it allows the baht to float until the present.
However, Thailand's current financial situation is different from that of 1997, as evidenced by the low foreign debt burden of Thailand.
and the baht floated
No need to spend money to support the baht.
More importantly, the reserve funds are sufficient to pay off foreign debts.
depreciation or appreciation of the baht
Depends on economic fundamentals and capital flows
At present, it cannot be determined that the baht must depreciate by more than 35 baht per US dollar.
or only this
The Bank of Thailand can only intervene from time to time.
to help reduce volatility
Do not let the baht depreciate more than regional currencies.
Financial industry gurus assess the Fed's signal of a fiery interest rate hike.
have the opportunity to make baht
Depreciated to 38 baht per US dollar and if the MPC raises the policy interest rate by 0.25%, the baht will return to 37 baht per US dollar.
important during this period
The US dollar continues to strengthen.
Major currencies around the world
In addition, the baht depreciated.
Thailand should not go against the trend.
Just take care of the Thai private sector not to be disadvantaged by competitors.
If at the end of this year, foreign tourists bring more money to visit Thailand. Export to generate more income into the country. better economy The Thai baht will appreciate itself.
If at the end of this year, foreign tourists bring more money to visit Thailand.
Export to generate more income into the country.
The Thai baht will appreciate itself.