Chart, BOT : Foreign currency reserves and exchange rate, until 27 june

Long time we didn't have a look on the foreign currency reserves of the Bank Of Thailand. Here is an update (datas BOT).

Left scale : the total of the foreign currency reserves (in millions USD) + the net forward position (futures buying contracts that the BOT will have to honor).

Right scale : the official exchange rate USD-THB (the BOT gives also the total value in THB of the foreign currency reserves in USD).

Watch out : the total foreign currency reserves is given in USD, but it doesn't mean that the reserves are 100 % in USD... Actually, officially the bank says that USD compose around 60 % of the total reserves (the BOT keeps Euro too for instance).

The chart “speaks” a lot, I think. If you follow this blog since one year, you should know the whole story (capital controls in december 2006, the BOT buying mountains of USD, to weaken the THB, in order to boost thai exports...and then issuing mountain of bonds to “sterilize” those liquidities...).

On january 2007, the total (reserves + net forward position) was 71 billions USD... One year later, it reached 105 billions... And march 2008... it was the peak at 128 billions. And then the BOT removed the capital controls... Plateau...

And then the USD starts to gain some strength on the world market... The BOT starts to intervene... but in the other way ! To support the THB versus USD (read here)...

And you can see on the chart, it's very clear, the total foreign currency reserve starts to decline. Coincidence ? I don't think so. It's the proof that the BOT continues to “play” with the exchange rate (they sold some USD).

[ time for a few days of rest. I will be back online sunday 13 july ]