"We won, boss! We won!"
"Great, we did it!"
"Congratulations, Mr. Chen," Li Xiaoman said with a smile as she stepped forward.
"They should be congratulating us," Chen Dong said with a happy smile.
As he predicted, Thailand succumbed to pressure, exhausted its dollar reserves at the last minute, and announced that the baht was abandoning its fixed exchange rate.
“You’re right, congratulations to us.” Li Xiaoman smiled broadly. This time, following Chen Dong’s lead, the HSBC foreign exchange trading department also made a lot of money.
But more importantly, these two currency crises will solidify her position at HSBC, which is what makes her happiest.
"It's getting late, I need to rush back and prepare for a meeting with the board later. As for inviting you to dinner," Li Xiaoman said, glancing at the cheerful crowd around her, and smiled, "Let's do it another day."
"Okay, you go ahead and do your thing. We'll call each other again after everything is finished."
Chen Dong nodded and instructed Wolong to see Li Xiaoman off.
At this moment, Wangcai walked up to Chen Dong and suggested, "Boss, things here are pretty much settled. We're just waiting for the Thai authorities to officially announce the devaluation of the baht during the day. I estimate that the baht will depreciate by at least 20%."
"The Thai baht is just the beginning. This baht incident is not just a simple currency crisis. If my estimate is correct, the currencies of Malaysia, the Philippines, Singapore and other regions will also be attacked in the near future."
As he spoke, Chen Dong turned to the crowd celebrating and said loudly, "Guys, it's not time to be happy yet. In the coming period, everyone should take the time to rest. We must establish positions before international speculative capital enters other Southeast Asian countries and regions."
"What, it's not over yet?" Everyone was taken aback by this, their expressions varying.
Chen Dong took in everyone's expressions and waited for them to process what he had just said before continuing, "Since 1992, once a currency crisis occurs, its impact will not be limited to just one country or region."
"Europe, America, and now Southeast Asia, are all like this. If you look closely, you will find that the economies of Southeast Asian countries have many similarities. They all rely on foreign capital investment and then use exports to increase revenue to drive domestic economic growth."
"The Thai incident reveals why these countries maintain fixed exchange rates. Now that Thailand has taken the lead in devaluing its currency, Thai products will be cheaper than exports from other countries. How will other governments think in this situation?"
“What if we choose to actively devalue the currency?” Lu Dachui blurted out, but then shook his head and said, “If we do that, the inflow of foreign capital will become a big problem.”
Chen Dong nodded approvingly and said, "This needs to be treated differently. If it is not too reliant on foreign capital, it is possible to choose to actively devalue the currency. But if it relies entirely on foreign funds, this path is not feasible."
"But my view is that even if those countries and regions choose to stick to the current exchange rate system, they may eventually be forced to announce the abandonment of the existing fixed exchange rate system."
"So, does that mean a large-scale currency crisis?" Wangcai's expression changed immediately. According to Chen Dong's analysis, these countries have no fewer problems than Thailand, facing internal and external troubles, and now with international speculative capital watching, it seems that currency devaluation is indeed the only possibility.
"I'm afraid that's the case. However, it's possible that some regions might actually be able to withstand this crisis." Chen Dong rubbed his nose. He didn't say it explicitly, but he was actually referring to Hong Kong.
When international speculative capital attacks Hong Kong, we'll have to see if he agrees.
"Alright, don't think about it too much for now. You should rest. Wait for the Thai government to announce the devaluation of the currency during the day. Also, I have other things to do these few days. I'll leave the matter of building positions in other Southeast Asian countries and regions to you, Wangcai."
"Understood, boss." Wangcai nodded, then looked at the other trading supervisors, "You all heard what the boss said, so get some rest."
"Yes, boss, Brother Wang, we'll go first."
......
Unlike the celebratory scenes within the offshore company, the Thai baht crisis brought joy to some and sorrow to others, such as another private equity firm not far from Chen Dong's company.
"It's over, we're finished." When Sim learned that Thailand had announced the devaluation of the currency, his first reaction was that their positions were going to be wiped out, and on top of that, the brokerage firm would probably demand compensation for the related losses.
"Sim, don't panic. Let's calculate our losses first." The man in white was also pale-faced; he simply couldn't believe it was real.
"The issue isn't how much we've lost. Currently, our average position is 26.82 baht to 1 US dollar, which is already quite low. Only God knows how much the baht will depreciate once Thailand announces the devaluation during the day."
"I'm sorry, I messed it up." Looking at the lights outside, Sim spoke without a trace of emotion, like a walking corpse whose soul had been emptied.
Let's take it one step at a time and wait for news tomorrow.
That's the theory, but if the foreign exchange market really drops by 20% tomorrow, with their leverage, they will lose at least 40% of their entire managed funds. In other words, overnight, $1 becomes 60 cents, or even less.
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