"Giggle..."
"You're such a sly little devil!"
Li Xiaoman laughed so hard her body trembled, and she gave him a flirtatious wink before saying, "So when are you planning to make your move?"
"today."
"So soon?" Li Xiaoman was clearly surprised.
If her call hadn't gone through, wouldn't we have missed a crucial opportunity?
It wasn't as serious as she thought. Chen Dong's funds were spread across multiple banks, and he used their accounts to buy Thai baht positions.
If these positions were to be sold, they would naturally be able to see it. However, the funds that are sold first will be safer and the profits will be more substantial.
Who knows how many US dollars in foreign exchange reserves Thailand's BOT still has?
...
Thailand, inside a bot trading room.
"Oh no, more funds are selling Thai baht in the foreign exchange market!"
These past few days, the traders at BOT have finally had a few good days and can get a good night's sleep, when unusual fluctuations have occurred in the forex market.
Is this some kind of trouble?
"How much capital is involved?" Upon hearing someone sell, the trader's nerves immediately tightened. Recalling the hellish life of the past few days, it felt like a dream.
“A sell order for 1 billion baht and 40 million US dollars,” a trader quickly announced, adding, “The other party is exchanging the money through a Thai bank, and they are already requesting us to allocate an equivalent amount of US dollars.”
Only $40 million?
That's not much!
When the traders at the bot heard this number, most of them thought it was a small number, especially after the recent baht defense battle, their perspectives had clearly broadened.
On the day of the final battle alone, they sold tens of billions of dollars.
But before they could even feel happy, the landline phone beside them started ringing repeatedly. At that moment, they exchanged a glance, a bad feeling creeping over them.
"Selling Thai baht? How much? What's the price?"
"1 billion baht, offer 25.6."
"You also want to sell for 1 billion baht? What? Even with the exchange rate? Okay, I understand."
"....."
Such calls came one after another.
After a dozen or so phone calls, the BOT traders were on edge again. Everyone realized that this was not a simple sell-off, but a premeditated, coordinated action.
This is likely another attack by international speculative capital. What puzzles them, however, is the source of this funding; it's not from the banking channels they've encountered before.
Little did they know that Chen Dong had been preparing for this day for a long time, even starting to plan months in advance. He had borrowed a large amount of money and, in order not to increase the interest rate when lending, he had specifically used an agreement to lock in the loan interest rate, all for the sake of this day.
Although the BOT traders were panicking, they weren't quite scared yet. After all, according to the BOT's vice president, the BOT currently has nearly $40 billion in foreign exchange reserves, which is enough to handle these exchanges.
But little did they know that bot's account held far more than $40 billion in foreign exchange reserves, and probably less than $10 billion in usable dollar reserves.
Moreover, Chen Dong's funds alone, and the leverage he used, were enough to completely crush them.
The news quickly reached the ears of BOT President Malaga, whose first reaction was whether the other side was fighting on two fronts.
"Is it a single-front operation, or are there developments on both sides?" Malaga asked loudly. If it's just selling in the spot market, it's likely foreign capital outflow, so there's no need to worry about it being done by hedge funds.
If the Thai baht depreciates in both markets simultaneously, then without a doubt, this is a new round of attacks on the baht by hedge funds.
"It's a two-pronged approach. As soon as the futures market opened, there was a huge sell-off. Our people are fighting fiercely with them, trying to push up the exchange rate," the vice president said, feigning ease.
Upon hearing this, Malaga's face darkened to the point of almost dripping water. What kind of time is this, and he's still thinking about my position?
"Connect me to office number two." Malaga ignored him, hesitated for a moment, then picked up the internal phone on the table, dialed the number, and glared at the vice president.
Although he was eager to hear what Malaga would say on the phone, the vice president left the office reluctantly after being glared at by Malaga.
“Mr. Number Two, I’m afraid our plan has been seen through.” As soon as the call connected, Malaga got straight to the point: “According to the latest feedback from various commercial banks, it is said that American funds are constantly calling us, asking us to report on our positions in the futures and forward markets.”
"Moreover, according to the latest news from the American capital market, hedge funds are currently selling off American government bonds on a large scale, preparing to raise enough funds to attack the Thai baht again."
"Today, it seems that the enemy's vanguard has begun selling off their shares."
"How could this happen? How long can our current funds hold out?" came the terrified voice from Number Two on the phone, clearly indicating that he didn't have a good solution to the current situation.
"I'm sorry, but I'm afraid we'll have a hard time holding off their attack this time!" Malaga's voice was low and bitter; this was a situation he absolutely did not want to see.
However, the attacks from international speculative capital were not swayed by his will, nor were they deterred by the false information he released.
Now we've reached the most crucial step!
"What if we announce an interest rate hike now?" There was a moment of silence on the other end of the phone. After a long while, a deep voice came out: "Answer me, what about raising interest rates? If we announce an interest rate hike now, at least we can retain some funds to flow back."
For most investors, investing in interest rates and government bonds are considered the two least risky investment options. There's a saying in the market that investing in these two products is risk-free, and their returns are very similar.
Raising interest rates can actually be seen as increasing bank interest rates. When investors deposit money in banks, the banks pay slightly higher interest rates than before, and then use this money for investment or construction.
Furthermore, with the government as a backer, unless the country goes bankrupt, this type of investment not only carries no risk but can also yield good returns.
Money is driven by profit. Once a country announces an interest rate hike that exceeds the value of its previously invested, stable products, that portion of the funds will flow into that country driven by the pursuit of profit.
The second point, which proposes using interest rate hikes to retain funds, is based on this principle.
Under normal circumstances, this operation is not wrong.
But clearly, Number Two overlooked one fact.
......
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