Jump to content
soalbundy

what's going on with the Thai Baht

Recommended Posts

12 hours ago, Mac98 said:

That would be if it was returned under the new tax rate, but I believe off shore funds will be given a tax holiday of 5%, a common strategy for offshore funds, greatly reducing their tax payment to $11 billion.

 5.25% rate was the Bush "one time" remedy for the Clinton Treasury Dept. tax dodge. It will be between 11% and 15% this time around.

 

https://www.nytimes.com/2017/11/29/business/taxes-offshore-repatriation.html

Share this post


Link to post
Share on other sites
On 1/14/2018 at 1:46 PM, lannarebirth said:

 5.25% rate was the Bush "one time" remedy for the Clinton Treasury Dept. tax dodge. It will be between 11% and 15% this time around.

 

https://www.nytimes.com/2017/11/29/business/taxes-offshore-repatriation.html

11% is still half of what they should pay under new rate of 21%, which they should be happy with as that would still be way down from the 35% they were dodging. If I didn't pay my taxes would I get to settle for one-third? Or would I get hit with interest and huge penalties? 

Share this post


Link to post
Share on other sites

Interesting to read that the Thai bond market is now weighted very much in favour of long-term bonds at 76% with the remainder at under one year. mostly this seems to be foreigners buying up emerging market debt, another stressor on THB but seems at odds with the bond market in general where short duration is the trend.

 

Even more Interesting though is that locals investing in Foreign Investment Funds (FIF's) has now reached 1.1 trillion baht, more than the total value of all Thai bonds purchased by foreign investors. Unanswered questions on this point concern where those purchases are being made, on or offshore and in what currency. Presumably, these are offshore funds as now permitted by the fairly recent change in BOT regs. to allow exporters to invest their foreign earnings in offshore investments rather than being forced to exchange them for THB, in order to prevent further upwards strain on THB. Presumably, these are also foreign currency investments rather than investments using THB. 

 

If the above is correct, at some point those FIF's will be repatriated and converted to THB and/or the earnings from them will be and that will have a sizeable impact on the value of THB, if there's ever a rush for the exits from Western markets. What that also means is that the true value of THB is being understated by some THB 1.1 trillion since those funds are not yet converted into THB but are still owned by local Thai's.

 

Share this post


Link to post
Share on other sites
59 minutes ago, Mac98 said:

11% is still half of what they should pay under new rate of 21%, which they should be happy with as that would still be way down from the 35% they were dodging. If I didn't pay my taxes would I get to settle for one-third? Or would I get hit with interest and huge penalties? 

I couldn't agree more. In fact, if it were up to me they'd be paying penalties on the money they did not repatriate that is in excess of their legitimate overseas expenses.

Edited by lannarebirth

Share this post


Link to post
Share on other sites

A Thai friend of mine who's an expert on Thai finance indicated that the Stock Exchange of Thailand (SET) is at record highs because of foreign money pouring into Thailand....another reason why the THB has been strong lately.  As for the USD, the recent massive corporate tax cut is projected to raise the US national debt significantly....which is not good news for the dollar.

Share this post


Link to post
Share on other sites
2 hours ago, simoh1490 said:

I

Even more Interesting though is that locals investing in Foreign Investment Funds (FIF's) has now reached 1.1 trillion baht, more than the total value of all Thai bonds purchased by foreign investors.  

 

If the above is correct, at some point those FIF's will be repatriated and converted to THB 

 

So is it possible that these local investors  have the ability and are working the exchange rate system here ? 

Using strong baht to buy foreign and then later using foreign to buy a weak baht.  

Edited by morrobay

Share this post


Link to post
Share on other sites
37 minutes ago, morrobay said:

So is it possible that these local investors  have the ability and are working the exchange rate system here ? 

Using strong baht to buy foreign and then later using foreign to buy a weak baht.  

Yes in theory, although BOT still has control over those flows so it will be difficult for them to try and manipulate the Baht. Also, the Baht is expected to be a one way bet hence there's little point in manipulating what is already strong.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

BANGKOK 21 January 2018 21:14
Sponsors
×