Poето перепечатка новостей в хронологическом порядке,как их видят ведущие тайские газеты sted: Tue Dec 19, 2006 1:56 pm Post subject: Capital inflows subject to 30% withholding
Capital inflows subject to 30% withholding
source: The Nation
Bank of Thailand to order financial institutions to withhold reserve requirement of 30 per cent of capital inflows, effective as of Tuesday to curb rising short-term inflows which push bath to a new 9-year high Monday at Baht35.09 to the US dollar.
Funds withheld from inflows for foreign direct investment can be returned as soon as evidence of the investment is provided.
Otherwise, all of the withheld funds can be returned after one year, as long as it can be documented that the initial funds remained in the country for the entire period.
If the funds are withdrawn from the country in less than one year, only two-thirds of the amount withheld will be returned to investors.
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above $20,000 year
December 19, 2006 breaking news
Thai stocks plunge after central bank acts to curb rising baht
source: The Nation/AFP
Thai share prices plunged on Tuesday after the central bank took the most stringent measure since the 1997 Asian financial crisis to curb the baht's rise, dealers said.
The Stock Exchange of Thailand (SET) composite index nosedived 64.62 points or 8.85 percent to 665.93 in the first minutes of trading and the bluechip SET 50 index fell 53.10 points to 458.90.
The Thai currency, which hit a new nine-year high of 35.12 to the dollar Monday, fell to 35.65-70 early Tuesday.
The Bank of Thailand on Monday ordered banks to lock up 30 percent of any new foreign currency deposits above 20,000 dollars for a year in an effort to curb inflows of funds pushing up the local currency.
Such deposits would carry no interest and a third of the funds would be forfeit if they were withdrawn before the one year was up.
Since the beginning of the year, the Thai baht has jumped about 14 percent against the dollar, putting pressure on the country's key exporting companies.]
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Posted: Tue Dec 19, 2006 2:21 pm Post subject: Re: Foreign currency control: 30 % lock above $20,000 year
BACKGROUND:
BoT's press release on new reserve requirements applicable to short-term capital inflows
Tarisa Watanagase, Governor of the Bank of Thailand (BOT) on Monday, announced that despite recent measures aiming at discouraging short-term capital inflows and limiting baht speculation, short-term speculative inflows of various forms continue to persist, as evidenced by the volatility of the baht and its rapid pace of appreciation.
Hence, the BOT has to implement an unremunerated reserve requirement on short-term capital inflows. Financial institutions are required to withhold 30% of foreign currencies bought or exchanged against the baht, except those related to trades in goods and services, or repatriation of investments abroad by residents. The details of the measure and related operational procedures are summarized as follows:
1. After one year, customers whose foreign currencies have been withheld can request for refunds by submitting related evidence to prove that the funds have been in Thailand for at least one year.
2. Once financial institutions have examined and certified the one-year minimum stay period, they shall inform the BOT to return the funds, through them, to their customers.
3. Should any customers wish to repatriate their funds earlier than one year, they would be refunded only two-thirds of the amount.
4. Foreign exchange transactions which have been traded prior to December 19, 2006 are exempt from this reserve requirement.
5. Foreign direct investments or unrequited transfers would initially be subject to the reserve requirement but shall be refunded upon submission of supporting evidence through financial institutions. Once financial institutions have examined and certified the legitimacy of such claims and the BoT deems it appropriate, the BoT shall promptly return the full amount.
6. Financial institutions shall remit the required reserves, in the form of foreign currencies, to the BoT on the 7th of the subsequent month.
7. The earnings received from this measure would be earmarked for public benefits.
In order to regulate foreign short-term capital inflows, several countries have imposed reserve requirements on such inflows during critical times.
The BOT views that the present situation warrants the introduction of such measure to prevent speculative pressure on the baht.
The BOT will closely monitor and assess the impact of this measure.
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December 19, 2006 3 pm
Baht depreciates to Bt35.92-Bt35.97
source: The Nation
The Bank of Thailand (BOT)'s measure to withhold 30 per cent of capital inflows in order to curb baht speculation Tuesday prompted the baht value to depreciate from Monday's peak of Bt35.06, fresh nine-year high, to Bt35.92 to Bt35.97 per dollar at 3 pm.
The Nation
Posted: Tue Dec 19, 2006 5:51 pm Post subject: Re: Capital inflows subject to 30% withholding
BOT to maintain baht measure, but to try to reduce effects
source: The nation
Nitaya Pibulratanagit, the central bank's assistant governor, said Tuesday the Bank of Thailand is seeking for ways to reduce the effects of the 30percent withholding requirement on other markets.
However, the central bank does not plan to remove the measure entirely.
Nitaya admitted after her meeting with brokerage companies and fund managers that the stock prices had fallen deeper than expected.
"After listening to (brokers), we must introduce measures to soften the rules quickly, but I can't say when we will do that," she said.
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Posted: Tue Dec 19, 2006 5:54 pm Post subject: Re: Capital inflows subject to 30% withholding
S&P analysts backs baht mesures
source: The Nation
The measures of the central bank to curb its currency appreciation won't have an immediate impact on the country's credit ratings, but the new measures will have long-term economic costs, a senior credit analyst at Standard and Poor's Ratings Services told Down Jones Tuesday.
The measures will slow foreign capital inflows, which could reverse the country's current account surplus and hurt the economy, said Kim Eng Tan, the primary analyst for Thailand at S&P.
"It has been very effective in stopping speculative inflows," said Tan, based on the market's performance Tuesday.
"Definitely, it will work, but it carries long-term costs which have to be balanced with short-term benefits."
Posted: Tue Dec 19, 2006 5:57 pm Post subject: Re: Capital inflows subject to 30% withholding
Thai stocks prices suffer their worst losses ever
source: The Nation
Thai stocks prices on Tuesday suffered their worst losses ever, sparked by panic selling after the Bank of Thailand imposed draconian measures to curb the baht's sharp rise.
The Stock Exchange of Thailand (SET) composite index plummeted 108.41 points, the biggest one day drop in the 31-year history of the bourse, or 14.84 per cent to close at 622.14.
The baht closed at 35.85-90 to the US dollar, after hitting a new nine-year high of 35.12 on Monday. The baht appreciated by 14 percent since the start of this year.
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Foreign house buyer affected by baht measure
source: The Nation
Impacts of the Bank of Thailand's austere capital control measure spreads beyond the stock market, as an expatriate sees a problem in settling a house purchase deal scheduled Wednesday.
The expat who contacted The Nation but asked not to be named transferred 150,000 euro from a bank in Hong Kong to Kasikornbank Tuesday, without knowing of the measure.
He was shocked to know that 30 per cent of his money would be parked with Kasikornbank once he converted the foreign currency into Thai baht.
"Only if the central bank averts the policy, would I have enough money to sign the contract. If this policy remains, I would need 30 per cent more for the house that I have reserved," he said.
Wednesday December 20, 2006
Curbs lifted as market crashes
source: Bkk Post
Red faces as B800bn wiped off share values
Authorities were forced to make an embarrassing U-turn yesterday and eased stringent currency controls on foreign investors one day after the Stock Exchange of Thailand lost 800 billion baht in value _ the largest one-day drop in its 31-year history.
Effective today, stock and foreign direct investment will be waived from the new Bank of Thailand rule requiring a 30% reserve on currency transactions.
M.R. Pridiyathorn Devakula, the finance minister and deputy prime minister, acknowledged that authorities had ''underestimated'' the impact that the controls would have on the market.
He met yesterday evening with market regulators, securities brokers and banks to discuss the fallout from the measures.
Local stocks plunged 14.84% yesterday in a broad selloff that saw the Stock Exchange of Thailand index close at a three-year low at 622.14 points, down 108.41, on heavy trade worth 72.1 billion baht.
Local and foreign investors alike sharply criticised the capital controls as ill-conceived and heavy-handed.
But M.R. Pridiyathorn defended the measures as needed to relieve pressure on the baht, which has gained 14% against the US dollar this year thanks to steady capital inflows and strong exports.
''This was not a mistake. The central bank tried to address the problems. Without action, the baht would already have broken through 35 to the dollar,'' he said.
''We don't need to discuss who to blame. Our priority is on fixing the problems.''
The baht yesterday weakened slightly to around 35.9 to the dollar, compared with 35.5 on Monday.
Under the revised rules, stock investors will be exempt from the reserve rule. Local banks, brokers and custodians will be asked to cooperate in ensuring that foreign funds do not shift to other asset classes such as bonds or the money market.
Analysts said the stock market should rally today after the policy shift, but cautioned that investment sentiment had been severely hit.
Kongkiat Opaswongkarn, chairman of the Federation of Thai Capital Market Organisations, said the impact on the economy ''was worse than from World War II'', and criticised the central bank for not understanding the capital market.
''The central bank needs to be more cautious before taking such measures. We hope to see a rebound, but many investors, large and small, have already suffered,'' he said.
Korn Chatikavanij, a deputy leader of the Democrat party and former head of investment bank JP Morgan, blasted the central bank's measures as a ''disaster''.
''As the rule is structured, it penalises everybody and it only helps put more pressure on the funds flowing into the country,'' he said. Many institutional investors had explicit rules against investing in markets with capital controls.
''This is an error by the authorities and they should come out and correct it as soon as possible,'' Mr Korn said.
Both the SET and the Securities and Exchange Commission, which were not consulted in advance about the capital measures, also voiced complaints.
Patareeya Benjapolchai, the SET president, said yesterday's sell-off came as investors sought to curb their risk.
''We feel the central bank should quickly step in and send a clearer message to the market, otherwise the SET will be heavily impacted,'' she said.
Thirachai Phuvanatnaranubala, the SEC secretary-general, said controls aimed directly at currency speculators would be more effective for the economy.
''It would be better if we can limit the measures only to currency speculators and not impede those bringing in capital for stock investment,'' he said.
Not everyone was critical. Exporters welcomed the measure as long overdue in helping stem the baht's appreciation.
''The baht has risen by 14% this year against the currencies of our export rivals.
''How can we compete with others if the baht is allowed to get stronger?'' said Somsak Paneetatyasai, president of the Thai Shrimp Association
