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Business Recorder
18 hours ago
- Business
- Business Recorder
Asia currencies: S Korean won and Thai baht edges lower
BENGALURU: Emerging Asian equities trended lower on Tuesday as investors took stock of regional governments' trade talks with the US, with Thai shares falling due to worries over the independence of the domestic central bank following a key appointment. Thailand's benchmark index fell over 1% after news that Vitai Ratanakorn, a perceived rate-cut advocate, would take the helm at the Bank of Thailand. The Thai baht slipped further, down 0.3% on the day. 'Given the weakness of Thailand's economy, there is no doubt that the country needs lower interest rates,' said Gareth Leather, senior Asia economist at Capital Economics, but added the appointment may fuel concerns about the bank's independence. Thai equities have risen over 8% since reports of Ratanakorn's appointment, anticipating monetary easing, but have also raised concerns about ongoing tensions between the BoT and the government regarding pressure for rate cuts. 'While we have some sympathy with the government's argument that interest rates have been kept too high for too long, over the longer term, there is strong evidence that central bank independence tends o deliver better inflation outcomes,' added Leather. Across the region, most stock markets were in the red, with Taiwan, South Korea and Malaysia posting losses between 0.3% and 1.5%. Taiwan equities extended their decline into a second session, giving back some of the 5% gain accumulated earlier this month. Meanwhile, Jakarta's benchmark continued to outperform, rising for a 12th straight session, underpinned by optimism following a recent US trade agreement and domestic policy easing.
Bangkok Post
21 hours ago
- Business
- Bangkok Post
Gamut of challenges await BoT governor
The new governor of the Bank of Thailand (BoT) will immediately face challenges as business leaders want him to push for measures to reduce loan interest rates and relax lending criteria among state and privately-run banks as well as avoid a surge in the value of the baht. "Whether or not we can deal with economic problems needs cooperation. We cannot simply rely on a single agency," said Vitai Ratanakorn, president of Government Savings Bank, who will assume the post of governor of the central bank in October, while airing his views during a talk held at the Economic Reporters Association on July 19. The issues of interest rates, loan rates and the value of the baht will require Mr Vitai's close attention as identifying the right solutions could reduce financial burdens, increase the competitiveness of businesses and stimulate consumer purchasing power, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI). "Lower loan interest rates will allow small and medium-sized enterprises [SMEs] to access financial sources more easily, which is crucial for their operations," he said. SMEs, which represent the majority of the FTI's members, play a key role in driving the economy. Echoing Mr Kriengkrai, Isares Rattanadilok Na Phuket, managing director of Altimate Packaging Co, said he wants to see the new central bank governor seriously deal with the net interest rate spread of commercial banks, which is the difference between the interest rates for loans and deposits, as it is crucial to banks' profitability. A high spread affects SMEs, which are good debtors with have high potential to repay debt, as banks lend at higher rates than they pay for deposits. Mr Kriengkrai also wants Mr Vitai to work on plans to have banks ease lending criteria as difficulty accessing loans deals a blow to many businesses. The new governor needs to help exporters maintain their competitiveness by preventing a sharp appreciation of the baht, which would make Thai products more expensive, he added. "A stronger baht would also cause foreign tourists to delay their travel to Thailand," said Mr Kriengkrai. A range of issues from competitiveness, household debt to the impact of the aged society and political conflicts are structural problems that could lead to an economic slump, Mr Vitai said earlier this month.
The Star
a day ago
- Business
- The Star
Asia markets slip on renewed tariff tensions; Bangkok appoints new cenbank chief
Emerging Asian equities trended lower on Tuesday as investors took stock of regional governments' trade talks with the U.S., with Thai shares falling due to worries over the independence of the domestic central bank following a key appointment. Thailand's benchmark index fell over 1% after news that Vitai Ratanakorn, a perceived rate-cut advocate, would take the helm at the Bank of Thailand. The Thai baht slipped further, down 0.3% on the day. "Given the weakness of Thailand's economy, there is no doubt that the country needs lower interest rates," said Gareth Leather, senior Asia economist at Capital Economics, but added the appointment may fuel concerns about the bank's independence. Thai equities have risen over 8% since reports of Ratanakorn's appointment, anticipating monetary easing, but have also raised concerns about ongoing tensions between the BoT and the government regarding pressure for rate cuts. "While we have some sympathy with the government's argument that interest rates have been kept too high for too long, over the longer term, there is strong evidence that central bank independence tends to deliver better inflation outcomes," added Leather. Across the region, most stock markets were in the red, with Taiwan, South Korea and Malaysia posting losses between 0.3% and 1.5%. Taiwan equities extended their decline into a second session, giving back some of the 5% gain accumulated earlier this month. Meanwhile, Jakarta's benchmark continued to outperform, rising for a 12th straight session, underpinned by optimism following a recent U.S. trade agreement and domestic policy easing. Singapore's Straits Times Index also retreated from record highs after 14 sessions of fresh peaks. Investors are now focused on the Monetary Authority of Singapore's policy meeting on July 30. In the currency markets, regional units moved in tight ranges as the August 1 deadline loomed for Southeast Asian nations to strike trade deals with the U.S. or face sweeping tariffs. The South Korean won and Thai baht edged lower, while the Malaysian ringgit posted modest gains. The MSCI index of emerging market currencies held steady but remains down roughly 1% from its July 3 record high. "We are in a backdrop of a fragile global environment where events ranging from Japanese upper house elections to U.S. President Donald Trump's tariff threats continue to create much uncertainty and cloud the outlook for markets," said Maybank analysts. Japan's Nikkei closed lower, while the yen softened slightly after weekend election results delivered a setback to the ruling coalition, though the outcome was broadly in line with investor expectations. HIGHLIGHTS ** Indonesian 10-year benchmark yield flat at 6.519% ** Philippines' Marcos to meet Trump hoping to secure trade deal ** Thailand foreign tourist arrivals fall 5.91% annually so far in 2025 - Reuters
Bangkok Post
6 days ago
- Business
- Bangkok Post
Are damaged Thai banknotes still usable?
Whether damaged Thai banknotes are accepted generally depends on the discretion of individual vendors. Minor damage, such as a small tear at the corner, often does not prevent their use for payment. However, if the banknote is significantly damaged, such as being torn by 20% of its size, and the user is unsure whether it can be used, the note can be exchanged for a new one at a bank, under the conditions set by the Bank of Thailand (BoT), as follows: 1. Banknotes with over 60% of the original note remaining If the banknote has only minor damage and can be clearly verified as a genuine government-issued note, it can be exchanged at full face value. No application form is required. These can be exchanged directly at any of the Government Savings Bank (GSB) branches nationwide. 2. A half banknotes If the banknote is split into two parts down the middle (lengthwise), each half can be exchanged for half of the note's original value. For instance, a 100-baht note torn in half can be exchanged for 50 baht per half. In this case, an application for damaged banknote exchange must be submitted to the bank staff. 3. Mismatched banknotes If the banknote has been pieced together from two different notes, possibly due to a printing error, and both parts are from the same denomination and series, it can be exchanged for the full value. 4. Mutilated or defaced banknote If a part of the banknote is missing but more than half of the original note remains, and the note is clearly verifiable as genuine and not damaged due to intentional acts, such as improper handling, it can be exchanged for its full value. 5. Faded or unreadable banknotes If the banknote is still reasonably recognisable as an authentic Thai note, it can be exchanged at full value. An application must be submitted for examination by bank officials. 6. Burned, chewed, mouldy or stuck-together banknotes These must be presented in person to a bank officer along with a completed application form and a copy of a bank book. If the damage was caused by fire, a police fire report must be attached. The documents and banknotes must be submitted directly to a bank that processes currency claims. If the damage is too severe to verify authenticity on the spot, the note must be sent to the BoT for examination. The verification process may take up to 60 days from the date the claim is received. Banknote Clinic The central bank also operates a Banknote Clinic, which offers off-site services to facilitate the exchange of damaged banknotes. The clinic takes place at different locations each month. Damaged banknotes can also be exchanged at any GSB branch or commercial bank nationwide.
Bangkok Post
16-07-2025
- Business
- Bangkok Post
Central bank contender touts need to work with government
A contender to be Bank of Thailand's (BoT) next governor said she would be "a little more aggressive" in articulating the path for interest rates, calling for closer coordination of monetary and fiscal policies. "As we have very limited resources, every bullet that we use would have to be more effective," BoT Deputy Governor Roong Mallikamas said in an interview in Bangkok on Tuesday. "That probably could be done only if we were in collaboration and our policies are directed in the same direction in a cohesive manner and better coordinated." Ms Roong made her comments the same day cabinet had been expected to endorse veteran banker Vitai Ratanakorn to lead the central bank. But a final decision has been delayed for at least a week, raising the prospect that Harvard-educated Roong could still get the top job. A career central banker, 56-year-old Roong is widely seen as representing continuity from current governor Sethaput Suthiwartnarueput, who has resisted government pressure over interest rates. Mr Vitai, in contrast, has publicly called for lower borrowing costs. The surprise delay in naming a new governor adds to uncertainty caused by the recent suspension of Prime Minister Paetongtarn Shinawatra, the daughter of former leader Thaksin Shinawatra. Thaksin, whose family has won nearly every election since the turn of the century, has long pushed for looser monetary policy while clashing with royalist generals, judges and bureaucrats. On top of that, Thailand is trying to stave off higher US tariffs that would damage its export-reliant economy and revive sluggish growth. The benchmark SET Index is among the world's worst-performing stock markets so far this year. Under Mr Sethaput, the central bank resisted government pressure for rate cuts and a higher inflation target to spur growth in an economy that has lagged the growth seen among peers in Southeast Asia. Ms Roong said that if she is appointed BoT governor, she would engage with diverse stakeholders from the government, financial and the private sector right from the start. "A lot of times we wait until things kind of develop to the stage where it has become a confrontation," Ms Roong said. "By hearing them early, they hear us early, telling them early, we made the chances of resolving and seeing more eye to eye and working with more space and more lead time." Ms Roong said she backs the BoT's current accommodative policy stance, which has seen 75 basis points of rate cuts since October, and noted that uncertainty about the rate outlook may prevent banks from lowering borrowing costs, reducing the overall effectiveness of interest rate cuts. "During this time of uncertainty, monetary policy needs to be supportive and serve as an anchor of stability," Ms Roong, who oversees financial system stability at the central bank, said in the interview. 'There are just too many uncertainties already and we should not add more. I would probably be a little more aggressive in articulating' the rate path, she said. Total loans have contracted for three quarters in a row, while household debt remains high. But the monetary policy committee led by Mr Sethaput has underscored the need to preserve its limited policy space to deal with future shocks, though most economists expect a further 50 to 75 basis points in rate cuts this year. The front-runner for governor, 54-year-old Vitai, is an advocate of lower rates and coordinated fiscal and monetary policy to help revive the faltering economy. As president of the Government Savings Bank (GSB), which has spearheaded state efforts to provide financial relief to debt-burdened households and individuals, he is perceived as being close to the finance ministry, raising questions about the independence of the central bank. Ms Roong has worked for nearly three decades at the BoT, helping shape monetary policy, financial regulation and fintech oversight. She also had a stint at state-run Krung Thai Bank Public Company Limited. "I have addressed challenges at the macro level and the micro level, being quite familiar with the central bank tools and purview and scope of our work, which is actually very wide, very large," she said. "So I'm just offering my experience."
