Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (4503)	12/19/1997 7:27:00 PM
From: goldsnow	Respond to of 116753

Death of Gold?? ÿFull story Alarm bells ring as currency, gold flee Thailand 02:43 a.m. Dec 19, 1997 Eastern By Rajan Moses BANGKOK, Dec 19 (Reuters) - Alarms bells are ringing in Thailand as speculators and worried citizens squirrel capital in the form of currency notes and tonnes of gold out of the crisis-hit country. Police and customs departments are alert to the capital flight, which analysts warn could diminish the already dwindling confidence in Thailand. The latest round of capital flight comes on top of the heavy foreign fund outflows that have already accompanied Thailand's worst economic turmoil in decades. Such outflows have left Thailand mired in a severe liquidity crunch, pushed the embattled national currency, the baht, to all-time lows and driven the stock market to its lowest in nine years, analysts say. Regulators and analysts said some Thais, having lost faith in the plunging baht, are taking bags of currency notes and reselling gold abroad in an attempt to switch out of the cheap baht and into stronger foreign currencies. Gold exports require licensing by the Commerce Ministry, although it is legal to carry foreign currency out of the country. Singapore, which has no limit on gold and currency imports, is a favoured destination and one analyst said people would just go to money changers to get their money to Singapore. ''Obviously more people are doing this now as the baht has sunk,'' said the analyst, from a Bangkok-based foreign firm. The baht this week plummeted to a record low of 49.35 before recovering to the 45 level after the Bank of Thailand warned it was probing some alleged speculative trades in the currency and exporters were goaded by the authorities not to hoard dollars. Exporters were said to be holding off on sales to make bigger profits at sharply lower baht levels later. ''And it is not only happening in Thailand. I hear it is worse elsewhere, like in Indonesia or South Korea which have been hit hard,'' said the analyst, who declined to be named. The opposition has also jumped on the bandwagon in the call to check capital flight. Former premier Chavalit Yongchaiyudh, leader of the main opposition New Aspiration Party, urged the government to expose those hoarding dollars and speculating against the baht. ''There has been capital flight and it has been appreciable over a period of time. The money stocks are contracting rapidly in real terms. Liquidity has dried up,'' said Richard Henderson, head of research at Krungthai Thanakit Plc. The government has ordered the Central Investigation Bureau of the police to investigate gold smuggling and dollar hoarding. Storing up foreign currency is not illegal but, in Thailand's current circumstances, is considered socially undesirable. Customs officials say they have been ordered to keep a closer watch out for gold smuggling out of the country, to check whether exporters bring foreign exchange earned from gold exports back into the country and to probe their tax records. ''Customs officials have been ordered to watch out for any gold smuggling out of the country,'' said a customs officer based at Bangkok airport. On Thursday, a Singapore-bound Malaysian was questioned by customs officials at the airport as he carried 32 kilos of gold bullion for export, but was later released when it was found that his company was licensed to undertake such movement. ''He was allowed to board the flight after officials found that the gold was properly documented,'' the officer said. Customs department sources said gold exports had surged recently. In September gold worth 2.2 billion baht was shipped out and in October the value was 3.0 billion baht, compared with an average value of 1.0 billion baht a month before that. Local media also reported this week that an influential Thai took out 20 bags filled with U.S. dollars on October 27 to an undisclosed foreign destination from the Bangkok airport. Details were thin but no action was reported against him. Deputy finance minister Pichet Panvichartkul told local media this week that the report was true. On gold smuggling, he said this week that one company alone exported about one tonne of gold last month taking advantage of loopholes in the law to move large quantities of gold abroad. The finance ministry planned to take measures to plug the loopholes and curb the practice, he said. Some new companies were established specifically to export the gold using legal means but did not send the funds from the gold sales back home to Thailand, he said. ''These people take advantage of loopholes in the law and make profits by taking the national resource out of the country,'' Pichet said. Analysts said the government should move quickly to plug the loopholes that let people ferret capital out to make personal gains at a time when national liquidity was tight. This month's closure of 56 debt-ridden finance firms by the authorities, a liquidity crunch and a lack of confidence in local financial institutions weakened by the crisis have all snowballed to cause some Thais lose faith, they added. ^REUTERS@ Copyright 1997 Reuters Limited. All rights reserved. Republication and redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. ÿ