What goes up must go down. The Thai baht has continued to weaken against leading international currencies, trading at 31.70 to the US$ in yesterday’s trade. The falls reflect regional concern over the coronavirus spreading beyond China. In the past few days both central South Korea and parts of northern Italy have reported outbreaks of the virus.
Kasikorn Research Centre report the baht had weakened along with the Chinese yuan and other regional currencies amid concerns about the Covid-19 outbreak.
The SET also plungedalong with other Asian stocks due to concerns over the spread of the virus. In addition, the baht fell on technical selling orders after it broke the 31.50 baht/USdollar level.
Signs of a weak economic outlook, as well as net foreign selling orders for Thai stocks and bonds pressured the baht sentiment, according to the Kasikorn report. The US dollar also rose on positive data on the US economy.
Last Friday, the baht had closed at 31.62/USdollar, having hit an eight month low of 31.69 baht/USD.
Up to the end of this week, KBank expects the baht to move within a range of 31.40-32 baht/USdollar. Key factors to be monitored closely are Thai export data for January, the Bank of Thailand’s monthly economic report and the ongoing coronavirus situation, according to the Kasikorn Research Centre report.
Meanwhile, the US economic data to be released during the week include February consumer sentiment surveys, plus February durable goods orders, new home sales, pending home sales, personal spending-income, and PCE/Core PCE price indices, fourth quarter 2019 GDP report (second release) and December house price data, according to the report in The Nation.
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Thai banks report they can handle the impacts of the virus
As the Covid-19 coronavirus continues to spread in Thailand, authorities have temporarily shut off shopping malls, entertainment and sporting venues while allowing food stalls and restaurants to open, but only for take-out and delivery services. The measures have led to social disruption, unemployment, leave without pay and salary cuts.
However, a senior official at the Bank of Thailand reports, “Thailand’s banking sector is strong enough to defend against a potential upsurge in bad debt as well as debt restructuring cases stemming from the ongoing Coronavirus outbreak and official measures to contain the spread.”
Senior director for the economic and policy department Don Nakornthab says that banks have a sufficient capital buffer in the event of higher past-due payments and debt restructuring. Unlike the 1997 Tom Yum Kung (Asian financial crisis in Thailand) crisis, the banking system’s financial position is much more solid now.”
“At the end of 2019, the banking system’s capital funds totalled to 2.85 trillion baht, with a capital adequacy ratio of 19.6% and loan-loss provision of 701.2 billion baht, according to central bank data.”
“The non-performing loan coverage ratio was stable at 149.9% at the end of last year, and the liquidity coverage ratio remained high at 187.5%.”
“The banking system delivered a 30.8% rise in net profit to 270.9 billion baht in 2019.”
Siam Commercial Bank ‘s co-president Apiphan Charoenanusorn says that more than 100,000 clients with over 150 billion baht worth of total loans have requested financial aid to ease their burden after the bank launched the scheme in February.
Last week The central bank has set guidelines for the minimum assistance that financial institutions must offer to debtors to ease their financial burden amid the pandemic, which is effective from April 1st. All lenders, comprising commercial banks, specialised financial institutions, and non-bank and leasing companies, are required to comply with the guidelines covering 6 types of loan product…
- Credit cards
- Personal and car title loans
- Auto and motorcycle loans
- Machinery leasing
- SME – Nanofinance and Microfinance loans
Krungthai Bank data shows that the bank has already provided financial aid to 1,500 customers with combined loans of 30 billion baht, while another 70,000 clients with total loans of 250 billion baht are in the process.
The strongest demand for debt restructuring is seen in the bank’s mortgage and personal loans.
At the state-owned Government Savings Bank, President and chief executive, Chatchai Payuhanaveechai says that the GSB has offered a three-month grace period on principal and interest for all debtors who still service debt and miss payment for less than three months as of the end of March.
“The scheme, will run until June 30 and is automatically applied to qualified debtors without any registration requirement, adding that those who do not want to participate in the scheme can honor their debt as usual.”
SOURCE: Bangkok PostKeep in contact with The Thaiger by following our Facebook page.
Thai government screws sex workers over 5,000 baht stimulus
Thousands of Thai sex workers, estimated to be around 300,000, mostly out of work due to the Covid-19 coronavirus crisis, will receive no labour protection from the government. Empower Foundation, an organisation for the rights and opportunities for sex workers across Thailand, has sent a letter to the government pleading for help.
“Many are mothers and main family providers and carers. Due to Covid-19 the government has ordered closures of entertainment places which means that over 100,000 sex worker across Thailand are out of a job. In emergencies women are often the ones who do the work of caring for others. Yet this work is not recognised, nor compensated or supported.”
“For example, even though entertainment places are reported to earn around 6.4 billion dollars per year and sex workers create 4-10% of the GDP. Sex workers are criminalized and left out of labour protection and social security. The closure order affects sex workers who now have no income at all. Sex workers are ready to help society, but also still must pay their rent, live and care for their family.”
The organisation is yet to receive a response from the government, and it’s estimated the number of sex workers without a job across the country has now reached 300,000.
Mai Janta, a community representative of sex workers in Chiang Mai working at Empower Foundation, told reporters that they were the first to be affected when the government declared all entertainment venues closed.
“When the massage parlours, bathing venues, bars and karaoke closed we all agreed with and supported the government’s measures. Yet our kind of work means that we have zero chance of any income during this time. Also the government has shown no interest in helping at all. Now we can only follow the situation and check in on the women we know of, which is our 3,091 members across Chiang Mai.
“This government has focused on arresting and enforcing, never supporting. The labour law has never protected these women even though we contribute greatly to the economy. There are some women who are under the social security scheme; those working for larger businesses who have proper working hours such as beer girls, karaoke girls and such. But freelancers and women working in bars are often left out in the cold,” according to Chiang Mai City News.
“The government’s 5000 baht compensation, which is still not available and may not be for months, only applies to a few women, as most are migrant workers or tribal people with no Thai ID.”
“These are the most vulnerable of all. They have nowhere to go and no resources at all. What we want is the nearly 500 million baht the government seized a few years ago from the human trafficking owners of Victoria Secret and Natalie massage parlors.”Facebook page.
Thailand’s 2020 exports to fall 500 billion baht
There is no doubt Thailand’s fragile export business is gong to be hit hard by the coronavirus outbreak. Following on from the impacts of the high Thai baht value, regional competition and the fallout from the US-China trade wars, Thailand is poised for one of its worst performing export years.
“Under the worst-case scenario in which the coronavirus Covid-19 crisis exceeds 9 months (to September 2020), the University of the Thai Chamber of Commerce is forecasting exports could contract by as much as 7.1% this year, with the actual export value shrinking US$17.42 billion USD, or 557.72 billion baht.”
This from Aat Pisanwanich, the director of the Centre for International Trade Studies at the University of the Thai Chamber of Commerce.
“The impact of the outbreak alone is expected to cause Thai export value to decrease by 13.48 billion USD.”
“Thailand’s exports to the Chinese market are projected to drop by 1.2-13.5% this year to US$24.5 – 28 billion, the lowest it has been in six years.”
“Agro-industrial products are expected to see the most impact from the coronavirus crisis. The outbound shipments of this sector may decrease by 5.4-30% or US$299 million, products that are in risks include vegetable oil, beverages, canned and processed fruits, canned and processed vegetables, and canned and processed seafood.”
“ASEAN countries are forecasted to see the biggest decrease in export market value down by 5 billion USD, followed by Hong Kong down US$4 billion, Japan down US$3 billion, China down US$2 billion, Europe down US$1 billion and the US down $1 billion.”
The main factors resulting in Thailand’s export contraction with China include decreasing the income of Chinese citizens and the ban on foreigners entering the country.
SOURCE: Bangkok PostKeep in contact with The Thaiger by following our Facebook page.
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