"Was it really broken just like that? That's too easy, isn't it?" Wangcai said incredulously, looking at the rapidly flashing bids on the screen.
In recent weeks, the Thai government has repeatedly emphasized that Thailand has hundreds of billions of dollars in foreign exchange reserves, enough to maintain the status of the Thai baht.
But at this point, the Thai baht had clearly reached the point of floating.
"Wangcai, how about we contact the boss?" Ma Guoliang offered a solution that wasn't really a solution: to start a three-way dialogue with Chen Dong.
The 1990s were also the year of the global Internet boom. China was approved to access the global Internet in 1994 and completed the network construction in May of the same year.
Other countries, however, had it earlier.
It is for this reason that Ma Guoliang proposed the tripartite dialogue model.
soon.
Chen Dong received a cross-border call and connected to the internet.
"Wangcai, Manager Ma, it's been a long time."
"Boss, is that you?"
"Boss, I'm so happy to hear your voice."
Chen Dong chuckled and asked, "Did you encounter any problems?"
Wangcai didn't hide anything and quickly told Chen Dong about the sharp fluctuations in the Thai baht, and also told him about the new policies the Thai government had implemented in recent weeks.
Upon hearing this, Chen Dong quickly opened the trading software. The screen was filled with flashing quotes from all sides. After looking at it for a while, he smiled and said.
"Don't worry, there's no news to support the idea that Thailand will abandon its fixed exchange rate policy. On the contrary, the current news is full of reports about the Thai government's attitude towards stabilizing the exchange rate, such as going all out and fighting to the death..."
“That’s really true.” Wangcai was a little embarrassed by what he was told, but he was still worried about unforeseen circumstances, so he asked, “Boss, is there anything we need to do? Judging from the current situation, our position is still too small.”
Chen Dong shook his head and said in a deep voice, "It's not the right time yet. Just watch. Attacking a country's monetary system is not as simple as you think. This is just the beginning. I believe the short sellers will soon release some news that is detrimental to the market."
"If we enter the market now, we will become a pawn for the short sellers to test the Thai government."
really--
As soon as Chen Dong finished speaking, a new change appeared on the screen.
Just now, BOT traders created a bullish candlestick pattern to test the Thai government's limits. Meanwhile, in the trading floor of the Bank of Thailand, traders responsible for the European and American markets quickly absorbed all the sell orders.
Soon, just as the Thai baht was about to fall below 26 baht to 1 US dollar, they collectively intervened, using a large amount of funds to push the baht up and temporarily stabilize its exchange rate.
When it comes to the amount of US dollar funds, no commercial bank's foreign exchange trading department or hedge fund can compare with a country's central bank.
They are the main players in the currency market, handling currency contracts. Therefore, once a central bank intervenes, the exchange rate can quickly stabilize.
certainly!
It's worth mentioning here that the actual trading volume of Thai baht contracts on the London International Financial Futures and Options Exchange and the Chicago Mercantile Exchange's International Monetary Market is not large.
Even the combined financial transactions related to the Thai baht in these two markets cannot compare to those in the Asian market (i.e., the Singapore International Monetary Exchange).
While this is partly due to the lack of interest from European and American investors in emerging markets, it is also because the Singapore Exchange has a significant influence within the Asian monetary system.
However, the situation is somewhat different now.
Although the trading volume in European and American markets still cannot compare with that in Singapore, arbitrage opportunities may arise if the Thai baht is quoted at a low price in London and Chicago, while the Singapore market shows a different price.
Arbitrage between the three markets will eventually bring prices to the same level.
More importantly, the major international capital currently dumping Thai baht in the market has also given these individuals a degree of control over the baht's trajectory.
For this reason, even though the volume of currency traded in the Singapore market is more than twice that of the other two markets combined, the prevailing view is that only the real-time quotes from London and Chicago can truly reflect the true trend of the Thai baht in terms of market pricing.
This is the fundamental reason why European and American investors can exploit emerging markets.
Furthermore, by controlling the spot market, they have strengthened their influence in the futures market. Now, market investors are most concerned about those who have borrowed large amounts of Thai baht and are selling it off. At what price will they break down BOT? This price will be immediately reflected in the futures markets of Europe and the United States.
However, this day was destined to disappoint those who were watching. The two sides made contact but then fell silent, as if nothing had happened.
In reality, those who shorted the baht did not have the power to further depress the exchange rate. They could only enter and exit quickly, taking advantage of the time difference to close their short positions after making a profit.
Chen Dong watched for a while longer, and when he saw that the Thai baht to US dollar exchange rate had returned to a safe level of around 25, he ended the call.
Actually, it's still early, and the average exchange rate of the Thai baht forward positions established by Wangcai is 25.5 baht to 1 US dollar, which is currently in a slightly profitable state. As for the other funds, they are all hedged with over-the-counter forward counterparties through foreign exchange brokers, with a timeframe of about one year. Therefore, there are no issues with the positions at this stage.
...
Two days later.
Chen Dong appeared at an offshore company in Hong Kong.
Wangcai and the others also rushed back from Bangkok.
In fact, whether Chen Dong appears or not is not very significant.
The reason for rushing back at this time is twofold. Firstly, things are progressing very smoothly on Er Mao's side; the pre-order for 2 million tons of wheat has already been exceeded. Secondly, they also managed to purchase a significant amount of corn, barley, sunflower seeds, and other crops planted during the spring planting season.
They only need to wait until the July harvest season to receive the 2 million tons of wheat they ordered for winter planting. As for the agricultural products planted in the spring, they will have to wait until September. Whether Chen Dong stays in Moscow or not is no longer of any practical significance.
On the other hand, never underestimate the determination of women from the fighting nation, especially a woman who is determined to become a mother.
Based on the above two points, Chen Dong feared that if he stayed any longer, he would be completely drained before Yulia became pregnant.
To be honest, he really did disgrace men.
Even upon returning to Hong Kong, he dared not contact Anne and Vivian Chow, fearing that the two might also experience a brief separation that felt like a second honeymoon, which would truly be the end of him.
Chen Dong decided that he would never leave the offshore company, at least until the Thai baht depreciated.
......
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