Once there's a first one, there will be a second.
Philippine Central Bank Governor Rubio Kersen also spoke out:
"We also need to pay close attention to the trends in the long-term market. I can't offer you much help, at most a billion dollars."
Similar to Thailand, the Philippines has also been hit hard by international speculative capital in the forward market. Although the situation is not as bad as in Thailand, it has reached a critical juncture.
"I still need to discuss this matter with the chairman. If necessary, we can enter the market to make a purchase." After expressing his views in the Philippines and Malaysia, Zhao Haitao finally spoke.
Malaga wasn't too happy with Hong Kong's attitude, but he also understood that Hong Kong was undergoing a historic transformation. Under these circumstances, this was all Hong Kong could do.
“Besides us, the Thai government also needs to take some measures to reduce the capital flow of those investment funds and thwart their plans,” Li Hongyi said.
“That’s right! We will soon enact some laws to restrict domestic banks from lending to foreign banks and significantly increase interbank lending rates, making their borrowing costs much higher.” Malaga knew very well that the current situation was the best possible outcome.
In high spirits, he disregarded the rules and told them in detail what his side was planning.
Seeing that Thailand had taken ample measures to deal with the situation, these financial tycoons who have a presence throughout Southeast Asia were relieved.
They are confident that they can use the strength of their country to cope with this financial crisis.
Zhao Haitao looked frustrated, as he kept pondering Malaga's proposal to "prohibit local financial institutions from lending to foreign investors."
In Thailand, all local Thai banks must comply with the government's orders, but Hong Kong, being a "free port," would never do so, as the Monetary Authority of Thailand (MAS) would.
If international hedge funds launch an attack on the Hong Kong dollar, what can Hong Kong banks do besides raising interbank lending rates? Zhao Haitao felt completely at a loss.
As evening fell, on a bustling street in Bangkok, an elderly man, accompanied by two men in black suits, was enjoying the lively atmosphere.
His name is Omir Skadir, a professor at Princeton University in the United States, and a senior partner of the Quantum Foundation.
He made significant contributions to finance, publishing numerous academic works on the subject. Although he originally only aspired to academic success, he never imagined that his writings would influence many aspects of modern finance, particularly monetary policy.
He originally came to Singapore under the guise of academic exchange.
Coincidentally, Thailand had learned of his achievements and was facing a crisis in this area, so they invited him to visit.
Sure enough, at Bangkok's international airport, the central bank sent a deputy governor to greet him, and the two had a seemingly frank conversation.
During the talks, Skadir admitted that Thailand currently faces many problems:
On the one hand, in order to maintain monetary stability, the government needs to keep interest rates high in order to obtain sufficient capital;
On the other hand, Thailand's large international trade deficit, coupled with the instability of its banking system, makes currency devaluation and lower interest rates more tempting. Therefore, the Thai government needs to weigh this point; otherwise, it could potentially fall into a much larger crisis.
Perhaps it was because of Skadiel's scholarly demeanor that the vice president of the Bank of Thailand lowered his guard.
In Scardil's presence, he completely forgot that this was an economist working for Wall Street's greatest hunter.
He admitted that Thailand had agreed to all interest rates that would keep its currency exchange rate at the prescribed level. However, due to problems in the banking system, the government is now focusing more on controlling interest rates.
Skadier gleaned a great deal of useful information from the vice president's words.
He seemed to see a huge opportunity to short the Thai baht, like standing next to a giant money box filled with cash that he could reach out and grab.
Skadi pretended not to understand the implication in his words, subtly changed the subject, and chatted with the official for a while longer.
Then, he suddenly brought up the previous topic, saying that he hadn't fully heard it.
Thai government officials, unaware of the extent of their leaks, repeated themselves.
Skadir and his partners were well aware that Thailand was powerless to change its current exchange rate policy. No matter how many official statements were made to maintain the exchange rate, the final result would be the same: the Thai baht would depreciate.
Why can't Thailand devalue the Thai baht on its own?
This is because, in addition to the continuous inflow of foreign capital, there is also political pressure from other Southeast Asian countries and regions.
As is well known, the Four Asian Tigers and the Four Asian Dragons all adopted an export-oriented development model.
Since this model is based on a large influx of external capital and technology, maintaining the stability of the domestic currency's value is inevitable.
Because if investors are worried about large fluctuations in a country's currency exchange rate, they will not make long-term investments in that country.
After a fixed exchange rate was established, foreign capital and technology poured in, leading to economic takeoff. During this period, the exchange rate still needed to maintain a certain level of stability. As a result, in addition to continuously attracting large amounts of capital from abroad, China also had to withstand pressure from neighboring countries.
It is common knowledge that when a country announces a devaluation of its currency, its products become more competitive in the world.
However, most Southeast Asian countries rely on exports to drive their economic development. Thailand, as the region's largest economy, must maintain its currency stability. Otherwise, if it were to devalue its currency, other countries would follow suit for their own interests, leading to a trade war. At that point, the situation in Southeast Asia would become a complete mess.
Therefore, for the sake of regional economic considerations, Thailand, as a regional "major power," must also maintain the stability of its currency value.
This is why Southeast Asian countries came to the aid of Thailand when the Thai baht was attacked.
Skadir stood on the streets of Bangkok, watching the bustling crowds, his heart filled with compassion. Compared to the greedy financiers on Wall Street, he possessed a stronger scholarly air and a greater sense of empathy.
In fact, there are many people in the United States who oppose attacking Thailand. But strangely enough, these opponents are all people Soros himself created.
George Soros was born in Hungary and is Jewish.
But he was lucky; during World War II, he escaped Nazi persecution, entered the Institute of Political Science and Economics in London, later developed his career in the United States, and eventually founded the famous Quantum Foundation.
More than his reputation in the financial world, Soros is concerned about his academic achievements. He has also established foundations in socialist countries such as Eastern Europe to help them achieve modernization.
Huaxia Yanjing also had such a fund, but it was forced to close down in 1987.
......
Continue read on readnovelmtl.com
