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Bank of Thailand braces for trade war fallout

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By Wichit Chaitrong

“The trade row has increased the uncertainties for Thailand’s economy because it could have a negative impact on Thai exports, businesses, employment, consumption and investment.”

Central bank keeps policy rate unchanged to facilitate growth; forecasts for GDP and export growth revised upwards amid weakening of the baht.

Protectionism, stirred by the trade disputes between the United States and China, remains the biggest risk to the Thai economy and was partly responsible for the Monetary Policy Committee (MPC) keeping the policy rate unchanged to further accommodate economic growth – this according to the central bank yesterday.

The majority of the MPC members yesterday voted to keep the policy rate at 1.5 per cent, as they were worried about the impact of trade tensions between the US and China on the local economy, said Jaturong Jantarangs, assistant governor of the Bank of Thailand (BOT).

“The members of the MPC are concerned about trade protectionism as the trade tension has intensified over the past few days, suggesting it is unlikely to end soon,” he said, referring to retaliatory tariffs between the world’s largest economies.

“The trade row has increased the uncertainties for Thailand’s economy because it could have a negative impact on Thai exports, businesses, employment, consumption and investment,” said Jaturong.

He said five members of MPC voted yesterday to keep the rate unchanged while one member voted to increase the rate by 0.25 percentage points.

“The threat of a trade war is among other reasons for keeping the rate low in order to facilitate growth,” he said.

Bank of Thailand braces for trade war fallout | News by The Thaiger

Current capital outflows from Thailand have not yet negatively impacted real economic sectors, as businesses are still able to raise funds at a low cost, but only a few companies pay slightly higher rates to issue bonds, he said.

The strengthening of the US dollar caused by the US rate hike has recently led to capital outflows from emerging markets including Thailand, he said, referring to foreign investors selling Thai stocks and bonds.

The capital outflow has led to the weakening of the baht against the US dollar. Year-to-date, the baht is at more or less at the same level as at the end of last year, he said, referring to the baht now weakening to more than 32 baht per dollar.

The baht had appreciated about 10 per cent last year and continued to rise about 3-4 per cent earlier this year, something exporters had complained about.

The central bank yesterday also upgraded the economic growth forecast for the year to 4.4, up from 4.1 per cent forecast in March, he said. Consumption has expanded but better economic conditions have not yet increased household revenue and employment across the board. And household debt remains high, he warned.

Private investment continued to expand partly because it was driven by public investment projects, he said. “The Eastern Economic Corridor [EEC] Initiative would further boost public investment but we have to see whether the projects suffer any delays,” he said.

Export is expected to grow at 9 per cent this year up from 7 per cent projected earlier, Jaturong added.

Prinn Panitchpakdi, managing director at CLSA Securities Thailand, said foreign institutional investors were more concerned about a potential escalation towards trade war and central banks around the world were tightening too much too soon. The strength of the US dollar coupled with the oil price trend does not help emerging markets, he said.

A clearer Thai political and election road map, the timely execution of public infrastructure investments, and progress on the EEC would place Thailand in a more favourable position compared to other Asean markets but the bigger global picture needs to get brighter first if foreigners are to slow down their selling, he noted.

“Most foreign investors appreciate an improvement in the corporate governance scorecard for most of the Thai listed firms but there remains some room for improvement especially with regard to genuine board independence, anti-corruption measures, and enforcement of competition law,” Prinn added.

Meanwhile, Soraphol Tulayasathien, director of Economic Stability Analysis Division at the Finance Ministry’s Fiscal Policy Office, said that the current fall in stock values were a result of short-term volatility as the market was reacting to the threat of a trade war.

Soraphol said the Thai economy was resilient to shoulder the impact of a volatile financial market. This is because the country has strong international reserves of US$212 billion (6.9 trillion baht), equivalent to 3.6 times short-term foreign debt or 9.8 times the monthly import value, he said.

Thailand has also diversified its export markets, and was not dependent only on China and the US.

Soraphol said the prospects for exports and tourism looked promising.

He did not expect the current bout of trade retaliation to escalate into a full-blown trade war and noted that most stock markets in Asia and the Stock Exchange of Thailand in yesterday’s trade had recovered some of previous day’s large losses. He expected China and the US to reach a compromise.

Bank of Thailand braces for trade war fallout | News by The Thaiger

STORY: The Nation

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Protests

K-Pop fan-funded billboards move from BTS and MRT stations to tuks tuks to support protesters

Caitlin Ashworth

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K-Pop fan-funded billboards move from BTS and MRT stations to tuks tuks to support protesters | The Thaiger
PHOTO: Twitter: @katipunera

K-Pop fan-funded “happy birthday” billboards are moving from mass transit stations in Bangkok to tuk tuks after the BTS Skytrain and MRT Bangkok Metro temporarily shut down services during pro-democracy protests last month.

K-Pop fans are a large backer of Thailand’s pro-democracy movement. As of last month, Thai and overseas K-pop fans raised more than 3 million baht to support the growing student-led movement calling on government and monarchy reform.

A Thailand fan page for the South Korean K-Pop band BTS (not to be confused with Bangkok’s BTS Skytrain) urged fans to stop paying for the “happy birthday” billboards displayed in BTS and MRT stations. The fan-funded signs celebrate the birthdays of the 7 members of the band.

The band members also issued a statement asking their fans (known as Army) to stop paying for signs in the BTS and MRT stations because the mass transit systems “inconvenienced protesters and normal citizens from getting home and putting them in danger.”

The “happy birthday” signs have been seen on tuk tuks throughout Bangkok while some have posted photos of empty advertising space in the transit stations.

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Thailand

Thailand News Today | Thai Airways corruption, Southern floods, Border Covid outbreak | Dec 3

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Thailand News Today | Thai Airways corruption, Southern floods, Border Covid outbreak | Dec 3 | The Thaiger

Thursday’s edition of Thailand News Today, including the latest in the local cases popping up in Northern Thailand. Thailand’s most watched English language news.

20 more people suspected of being involved in corruption at Thai Airways

20 people are now under suspicion of corruption and mismanagement within Thai Airways as accountants unravel the massive losses for the airline, spanning a decade

The news, announced by police and deputy head of the commission investigating the airline, comes as little surprise to anyone who has been following the demise of Thailand’s legacy airline. The airline is tackling a debt of around 300 billion baht.

The story follows many other tales of corruption and bad deals that have been part of a larger puzzle that is now being unraveled by accounts and committees who are handling the airlines’ bankruptcy.

Now, 20 people are suspected of corruption in 6 different parts of the company’s management.

The investigation into alleged corruption at the airline started in August. In September, 18 documents showing evidence of corruption and mismanagement at the airline was submitted to the Finance Ministry, still a major shareholder for Thai Airways.

The airline’s decision to buy 10 Airbus A340 aircraft for 100 billion baht in 2004 was catastrophic. The airline lost money on every single flight of these aircraft. All but 1 of them have been decommissioned and stored at the U-Tapao airport.

2 infected Thai women took domestic flights after illegal crossing from Myanmar

2 Thai women, both infected with Covid-19, took domestic flights after entering the Kingdom illegally from Myanmar and bypassing health checks and quarantine.

A total of 10 Thai women have now tested positive for Covid-19 after crossing the border from Myanmar, several having worked in the same hotel and entertainment establishment in the Burmese border town opposite Mae Sai in Chiang Rai.

Health officials are tracking and tracing anyone who could have been in contact with the women, a number well into the 100s. Some have travelled to Chiang Mai and Bangkok.

Thai economists say new local Covid-19 cases will slow tourism recovery

Meanwhile, the National Economic and Social Development Council says that the mini outbreak in Northern Thailand will re-ignite fears of a second wave of infections in Thailand, stifling travel and tourism in the northern cities.

Operators already note that there has been a drop off of bookings and cancellations related to the publicity from the cross border infections. Airline bookings have also dropped off to both Chiang Mai and Chiang Rai.

Government to raise 5-year Elite visa fee by 20%, as foreigners flee Covid countries

As more foreigners opt for one of Thailand’s “elite” visas, allowing stays of between 5 and 20 years, and costing anything from 500,000 baht to 2 million, the most popular version is up for a price hike.

The cost of the 5-year “Easy Access” visa will go up by 20% from January, to 600,000 baht.

An additional 2,674 applicants signed up for an elite visa so far this year. That’s an increase of nearly 25%, with the scheme generating revenue of 1.6 billion baht.

By the end of September this year, over 11,100 people hold an elite visa in Thailand, as part of 9 different packages offered by Thailand Privilege Card.

Heavy rain wreaks havoc in flood-ravaged Nakhon Si Thammarat

The governor of Nakhon Si Thammarat has put the province on high alert, following 6 days of heavy rain in the southern province.

Nakhon Si Thammarat is directly east of Phuket, on the Gulf of Thailand.

Large swathes of land are underwater after extensive flooding that has affected tens of thousands of people in the region. Floods have been recorded in 351 villages in 15 districts, with some 48,000 people affected.

Heavy rain and flash flood warnings were issued for all southern provinces except Chumphon and Ranong

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Bangkok

Man shot and killed outside Bangkok restaurant

Caitlin Ashworth

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Man shot and killed outside Bangkok restaurant | The Thaiger
PHOTO: Nation Thailand

A man was shot to death at a parking lot outside a restaurant in Bangkok’s Noi district. Police, accompanied by a doctor from the Siriraj Hospital, arrived at the scene around 2am this morning and found 49 year old Damrong Taweekkhet with 2 gunshot wounds in his chest.

Damrong, a fruit vendor, was chatting with his friends in the parking lot when a motorbike driver rode up and started arguing with Damrong, a witness told police. The driver allegedly pulled out a gun and shot it multiple times.

Police say they suspect the shooter is Damrong’s friend who had argued with him inside the restaurant prior to the shooting. Police are still looking for the suspect and say the motorbike was seen driving down Boromratchonnee Road.

SOURCE: Nation Thailand

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