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Chinese Tourists Can Help Pull Thai Baht Out of Political Morass

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(Bloomberg) — Thailand’s baht slid to the lowest level since March last week but there are reasons to believe it will bounce back in coming months.

The currency is poised to recover as an upsurge in Chinese tourists bolsters the nation’s finances, while any resolution to the political standoff that is dragging down Thai assets will likely lead to a relief rally, analysts say.

“A significant influx of tourists in the second half can contribute to a surplus in the current account by boosting tourism receipts, which will positively affect the value of the baht,” said Poonyawat Sreesing, a senior economist at Siam Commercial Bank Pcl in Bangkok. The baht may appreciate to as strong as 32 per dollar by year-end, about 10% stronger than the current level, he said.

The baht has been dragged lower in recent weeks as the coalition of pro-democracy parties that gained the most seats in the May 14 election have struggled to secure enough support from the pro-establishment senate to form a government.

The protracted stalemate helped send the baht to as low as 35.285 per dollar on Friday, the weakest level since March 1. The currency has now declined about 3.5% since the day before the vote, the worst-performing Asian emerging currency over the period after the Malaysian ringgit.

Landing Slots

Help may be on the way. Visitors from China and Australia should help lead an increase in tourism this month as airlines are in talks with the local airport authority to increase landing slots, the Tourism and Sports Ministry said in May.

Chinese tourist arrivals were only about 40% of pre-pandemic levels on a monthly basis as of April, which means there’s still significant room to improve in coming months as flight capacity increases, Chua Han Teng, an economist at DBS Group Holdings Ltd. in Singapore, wrote in a client note last week.

Initial signs the influx is filtering through the economy may be revealed in May current-account data due this Friday. The numbers unexpectedly deteriorated in April due to a slide in exports., leaving room for a potential upside surprise.

Some Negatives

Baht bears says there are plenty of reasons for possible further losses.

Weakness in the Chinese yuan may weigh on the baht, given the close correlation between the two currencies, said Vijay Kannan, an Asia macro strategist at Societe Generale Singapore Branch. The risks of worsening external demand and an underwhelming recovery in China could also negatively impact Thai exports, he said.

Diverging monetary policy between the US and Thailand may also drag the baht lower. The Federal Reserve is still signaling two more interest-rate hikes this year, while economists are almost certain the Bank of Thailand’s key rate has already peaked at its current level of 2%.

Close to Success

Those negatives may count for little though if there’s a breakthrough in the political deadlock.

Parliament will meet July 3, setting in motion the process of new government formation followed by the vote to elect a prime minister. The eight-party coalition of pro-democracy parties fronted by Move Forward said last week it’s close to securing enough support from the Senate to form a government led by its Harvard-educated leader Pita Limjaroenrat.

“If there is resolution on the political front, potentially there could be a correction lower in USD/THB,” Societe Generale’s Kannan said

Here are the key Asian economic data due this week:

  • Monday, June 26: Japan PPI, Singapore industrial production, Taiwan industrial production
  • Tuesday, June 27: Taiwan unemployment rate
  • Wednesday, June 28: Australia CPI, China industrial profits, South Korea consumer confidence
  • Thursday, June 29: Australia retail sales and job vacancies, New Zealand activity outlook, business confidence, Japan retail sales, South Korea business surveys
  • Friday, June 30: China PMIs and current-account balance, Thailand current-account and trade balance, Australia private sector credit, New Zealand consumer confidence, Japan jobless rate, industrial production and Tokyo CPI, South Korea industrial production

 

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‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

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HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

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REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Nova Scotia election: Liberals say province’s immigration levels are too high

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HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

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