bullyxtreme Chapter 353 The Thai Baht Collapse
Chapter 353 The Thai Baht Collapse
The strife in the political arena was far beyond ordinary people's imagination. Qiu Daxin, who was in a deadlock, launched a series of self-rescue actions.
3 month 28 day.
Qiu Daxin held a media meeting. Faced with the precarious financial market, Qiu Daxin announced more than a dozen radical rescue measures on behalf of the government. The rescue plans involving real estate and stock markets won unanimous praise from ordinary people.
"Qiu Daxin, have you ever thought about how much burden these rescue measures you proposed will bring to the finance? Ordinary people don't know, don't you know? In order to maintain the stability of the financial market, we are now heavily in debt. Where is the money to bail out the market?" Ma Dexiang asked angrily.
Qiu Daxin argued: "As long as the property and stock markets are stabilized first, we can significantly increase the benchmark interest rate to increase the cost of obtaining Thai baht for international hot money. We can also completely ban domestic commercial banks from providing loans to foreign capital companies. Block the channels for international hot money short-selling the Thai baht to obtain the Thai baht..."
"How is it possible? We are committed to building Bangkok into an international financial center like Singapore, and we are also preparing to stabilize the foreign exchange market through administrative intervention? If international capital withdraws from Thailand as a result, can you bear this responsibility?" Ma Dexiang asked.
"It's the lesser of two evils! The top priority now is to stabilize the stock and property markets and avoid further deterioration of the financial system..." Qiu Daxin explained.
The people did not wait for Qiu Daxin’s rescue measures...
Two days later, Qiu Taxin lost control of his emotions during an interview on a local TV station and announced his resignation as deputy prime minister with tears in his eyes.
Qiu Daxin's tearful exit from politics in an almost impeccable way not only avoided being regarded as a scapegoat, but also laid a solid public foundation for his comeback.
………………
Sansirui Real Estate Company.
After Yang Mo's tactful reminder, he speeded up the development, but as he rushed, one property still failed to go on sale.
Bangkok's real estate market has lost its former glory, and the vacancy rate is rising.
beep...
The phone on the desk rang suddenly.
"Hello, Shansirui Real Estate Co., Ltd., who are you?" Sheta grabbed the phone and asked casually.
"I'm Yang Mo, has the opening date been set?"
"Hello, Director Yang! It's confirmed that the market will open next Saturday!"
"Where's the opening price?"
After a brief hesitation, he replied: "The average price is tentatively set at 2.5 baht per square meter, which is basically the same as the surrounding sold properties!"
"It's too high. Let's change it to an average price of 1.7 baht!" Yang Mo said lightly.
"How much?" He didn't believe his ears.
"I said it should be changed to an average price of 1.7 baht..."
"Why? If you want to withdraw the funds as soon as possible, I think the price of 2.2-2.3 baht should be able to be liquidated quickly..." He asked in confusion.
"There is no need to liquidate it as soon as possible. Divide this property into three phases for sale. The opening price of the first phase is 1.7 baht, the opening price of the second phase is 1.6 baht, and the opening price of the third phase is 1.5 baht!" Yang Mo said without explanation.
"No... Director Yang, Shang Sirui will lose hundreds of millions of baht for no reason. Can you tell me why?" If the voice hadn't been too familiar, he would have even begun to suspect that the person talking to him on the phone was not Yang Mo himself. It's a prank played by a competitor!
"Do you want Sansirui to become the largest real estate company in Southeast Asia? If you want, just do what I say!"
"Director Yang, I still don't quite understand your business intention of insisting on doing this..."
Yang Mo could only explain with a wry smile: "The outbreak of the Southeast Asian financial crisis is just around the corner. In one year, hundreds of real estate companies will go bankrupt throughout Southeast Asia. The more housing prices fall now, the more real estate companies will go bankrupt in the future." No one cares about it. By then, Sang Sirui will be able to buy a real estate company that is on the verge of bankruptcy with a very small amount of money. Compared with this, what is the loss of hundreds of millions of baht now?"
He finally understood what was going on and blurted out: "Do you want Shang Sirui to hit the market with a huge price cut and burst the real estate market bubble in advance?"
Yang Mo nodded: "Shang Sirui's current loss will be rewarded ten times and a hundred times in the future. Just do as I say!"
A week later, Sansirui’s opening price of 1.7 baht caused panic in the entire real estate market.
Immediately afterwards, the remaining properties of Beiguo Real Estate announced that they would be liquidated at a 6.5% discount.
Yokota Real Estate subsequently followed up and announced a sale at a 6.3% discount on the first installment.
The remaining properties in San Sirui have dropped to 1.6 baht per square meter again...
The brutal price war caused widespread distress in the entire Bangkok market. Panic quickly spread across the country. Prices were cut across the board in Pattaya, Chiang Mai, and Phuket, and the real estate market bubble burst!
.........
Under Jonathan's instruction, HSBC Bangkok Branch was the first to announce: In view of the current instability in the financial markets in Southeast Asia, HSBC has indefinitely suspended local currency hedging business in various financial institutions in Asia!
A stone stirred up a thousand waves.
This move by HSBC is tantamount to announcing to the world that the currencies of Southeast Asian countries are at risk of significant depreciation. A small number of commercial banks subsequently followed suit and announced the suspension of local currency hedging operations.
In late June, the affiliated companies of Qianhai Asset Management, which had been dormant for a long time, took action one after another. Regardless of the cost, they borrowed Thai baht from a number of Thai commercial banks to sell short in the foreign exchange market.
The Bank of Thailand’s foreign exchange reserves have bottomed out and it is unable to intervene in the foreign exchange market. It has to abandon the 26:1 fixed exchange rate system and implement a floating exchange rate. Without government intervention, the Thai baht plummeted by 25% almost overnight...
The baht's fall quickly spread to the entire Southeast Asian market.
Under the influence of the plummeting Thai baht, the Philippine peso, Indonesian rupiah and Malaysian ringgit are in danger and have become the targets of international hot money.
More than a month later, the Bank of Malaysia announced that it would abandon the fixed exchange rate system, and the ringgit defense battle failed. After adopting a floating exchange rate system, the ringgit depreciated by 27% in just one day!
Even the Singapore dollar, which has always been strong, was not immune, devaluing by 6%...
The impact of Thailand’s abandonment of the fixed exchange rate system is still spreading. In early August, the Thai stock market suffered a heavy setback, falling below 8 points. Throughout July, the Thai stock market fell by as much as 500% in a single month...
Li Heping did not stop there, but continued to borrow Thai SET component stocks from banks and sell them short. The SET stock index futures almost became a one-sided short market, with no long contracts at all.
The Thai baht, stock market, and property market collapsed one after another. The entire financial system was almost defeated by international hot money, and gradually spread to the entire Southeast Asia. The financial crisis began to show its fangs that can eat people without spitting out bones...