Once market liquidity recovered, commercial banks holding Thai baht in global markets visibly breathed a sigh of relief. Their worst fears did not materialize; as long as the BOT intervened, the baht's exchange rate quickly recovered, returning to the level of 25 baht to 1 US dollar.
certainly!
While liquidity in the Thai baht foreign exchange market has been restored, this liquidity is contingent on the BOT's ability to intervene in the market. In other words, once the BOT runs out of US dollars and loses its ability to intervene in the market, this liquidity can disappear instantly.
However, with the support of fake news, the pressure on the bot will be greatly reduced. It hasn't reached the point of being completely helpless and everyone kicking it while it's down.
Soon, commercial banks participating in the foreign exchange market also began to conduct foreign exchange transactions in an orderly manner, profiting from exchange rate differences, converting the currency into US dollars for foreign trade settlement, and then converting it back into Thai baht...
at the same time.
The bot's president's office.
Malaga sat on the sofa with a worried look on his face. In front of him was a report on yesterday's global market situation, but he didn't even bother to look at it.
Alawan's resignation also shocked him, inevitably giving him a sense of tragic sympathy, like the feeling of "a rabbit mourning the fox's death." After all, the two of them, one in charge of monetary policy and the other in charge of fiscal policy, had a lot of overlap, and over time, they had become very good friends in private.
However, just before Alawan resigned yesterday, he hadn't received a single word of it. This indicates that the situation was urgent and the circumstances were more passive than he had anticipated.
Thailand also needs a capable figure to serve as a scapegoat, or rather, a political sacrifice. Frankly speaking, this is absolutely not Arawang's fault. Even if he were in Arawang's shoes, he wouldn't necessarily have done a better job. It's simply that the overall international situation has deteriorated.
In short, Thailand's economy is heavily reliant on exports to drive growth. Before the global economic downturn, exports generated substantial foreign exchange earnings, leading to a significant increase in economic growth.
However, once the external situation deteriorates, export-dependent countries like Thailand find their products lose competitiveness and no one is willing to buy them. Meanwhile, insufficient domestic demand indirectly leads to faster capital flows, shifting towards industries with shorter cycles rather than those that can truly generate long-term profits. This creates a vicious cycle.
This means that if there is even the slightest disturbance in the foreign exchange market, these short-term funds will quickly withdraw from their home countries.
All the Thai authorities can do is try to retain this capital, such as by raising interest rates. However, this approach is like trying to quench thirst with plums; it can only temporarily retain a portion of the funds. When the funds realize that the disadvantages outweigh the advantages, they will not hesitate to abandon the Thai market and flee in droves.
In the end, what will be left for Thailand will probably be a mess and devastation.
Against this backdrop, how easy is it for the Thai government to keep the baht from depreciating?
The thought of all this gave Malaga a major headache. If they want to maintain the Thai baht's status and prevent a large-scale devaluation, there is only one way left: to seek help from the International Monetary Fund.
But it's not as simple as it seems!
The International Monetary Fund is nominally a bailout organization for its member countries. However, who gets bailouts and who doesn't is decided by vote, not by application.
In this voting mechanism, whoever has the most shares has the most votes, and the country with the most shares is undoubtedly the United States.
More importantly, if we actually ask the International Monetary Fund for help, we will be subject to the limitations of the mechanism. We will definitely provide assistance, but the conditions attached will be extremely harsh.
"When soldiers come, we'll block them; when water comes, we'll dam it. If we really can't resist, we'll have no choice but to surrender!"
Malaga sighed deeply, his voice filled with profound sorrow, as he thought about the role the United States played in this currency crisis.
...
"Boss, Miss Li Xiaoman has arrived."
"Hmm." Chen Dong was taken aback upon hearing this, then said, "Take her to the reception room."
"Yes, boss." Wolong nodded and then left.
In the reception room.
"Chen Sheng".
"Sister Xiaoman."
Li Xiaoman's makeup today is exquisite, her outfit is perfectly matched, and she looks even more capable.
"What would you like to drink?" Chen Dong asked.
Li Xiaoman raised an eyebrow: "How about we eat and chat?"
“Okay, you decide.” Chen Dong nodded without refusing. It was already lunchtime, and even if Li Xiaoman didn’t come, he would still eat something.
The two didn't go far and just found a table at a Western restaurant near the offshore company.
Sirloin steak, served with Italian pasta, bread, red wine, and a side of French foie gras for each person.
There seemed to be a lot of food, and for Western food, these dishes weren't expensive, so it was clear that neither of them wanted to spend too much time on them.
Just as the waiter was preparing the food after ordering, Li Xiaoman asked the question first.
"Mr. Chen, the forward market suddenly lost liquidity last night. Were you shorting it?"
"If I said it wasn't us, would you believe me?" Chen Dong didn't answer directly, but instead asked in return.
Li Xiaoman rolled her eyes at him and said, "I don't believe it!"
"That settles it then." Chen Dong spread his hands, knowing that some things were better left unsaid.
"I didn't mean anything by it. I received a report from the foreign exchange trading department early this morning, and I was wondering who has such great power."
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