Category: News

Domino Effect of visiting Taiwan

          On 2 August 2022, Nancy Pelosi, the 52nd Speaker of the United States House of Representatives, visited Taiwan late on Tuesday on a trip she said shows an unwavering American commitment to the Chinese-claimed self-ruled island, but China condemned the highest-level U.S. visit in 25 years as a threat to peace and stability in the Taiwan Strait. Pelosi said that discussions with Taiwanese leadership will focus on shared interests, including advancing a free and open Indo-Pacific. However, her arrival prompted a furious response from China when international tensions were already elevated by Russia’s invasion of Ukraine.           According to One China Policy, China considers Taiwan part of its territory and has never renounced using force to bring it under its control. The United States warned China against using the visit as a pretext for military action against Taiwan. If China begins an assault on Taiwan, The consequences to Taiwan will occur whether boycotting from other nations or exporting potential goods referring to the electronic industry.           Moreover,

The EU is going into RECESSION

          After the world faced the Covid-19 pandemic, the world economy keep shrinking. In addition, the invasion of Russia-Ukraine driving a high inflation hike to 13% and low growth is soaring energy bills. The Bank of England has announced that the interest rates rose to 0.50% which reaches 1.75%, this rate is the highest rise in 27 years. After that, the Bank of England warned the UK will get into a recession, the economy will be shrink in the last 3 months of this year and keep shrinking until the end of 2023.           On the next day, after the Bank of England warned that the UK will into recession, it will spend time on 5 quarters (2022 – 2023), the Pound depreciated to 0.25% which reach 1.213 dollars, and depreciation to 0.12% which reach 0.843 euro.           Moreover, the Bank of England forecasted that the level of inflation will hit 13.3% in October 2022, and in 2023 the inflation rate still is high for a whole year,

The Worsens Inflation as Economic Crisis in Laos Hit 22-Year High

          Trading Economics reported the inflation rate in Laos hit 23.6% year-on-year in June, the highest since May 2000, establishing a surge in energy and consumer goods prices. The residents are struggling to challenge dizzying increases in the price of petrol, cooking oil, and other basic necessities. Furthermore, the Vientiane Times reported that the cost of living rose significantly including the cost of food, seasonings, non-alcoholic beverages, clothes, footwear, medicine, construction equipment, vehicles, spare parts, and other imported goods whereas the many low-income earners striving to afford basic necessities. According to the Lao Statistics Bureau, the highest surge in consumer prices in June this year was recorded in the communications and transport category, at 55.5 percent year-on-year.           In addition,  the smaller economies in which Laos has one of the highest inflation rates in the region, soaring fuel prices, and significant currency depreciation against the US dollar are creating pressure on inflation, particularly in Laos and Myanmar. The fuel price crisis has been possibly the most visible indicator of economic crisis, with

ECB hikes interest rate for the first time in 11 years

          On Thursday, 21st July 2022, the European Central Bank announced to raise the interest rate by 0.50%. This is the first time since 2011 which has raised interest rates, and from the announcement, it would begin to be effective on 27th July 2022. The cause of the ECB to raise its interest rates is because annual inflation in the European Union rose to 9.6% in June, reaching 8.6% for 19 countries that use the euro, and another factor is the surging of energy prices.           After the ECB announced raising interest rates, ECB denied providing a definitive direction of the rate raises in the future. Christine Lagarde, ECB president said “From now on we will make our monetary policy decisions on a data-dependent basis, We will operate month-by-month and step-by-step. What happens in September is going to depend on what data we have for September.”           However, We have to keep an eye on the interest rates in Europe that would affect the world economy together with

The Crisis of Myanmar Currency From Balance of Payments

          On 18th July 2022, the local correspondent reported that The Central Bank of Myanmar ordered companies and individual borrowers to suspend repayment of foreign loans, the latest procedure to prevent the nation’s decreasing foreign exchange reserves in order to prevent the reducting of International Reserves which to prevent the MMK capital flight, prevent the currency fluctuation, and sustain the financial stability of International Reserves.             Since Myanmar’s economy has been suffering from cash shortages for over a year, sharp increases in the prices of consumer goods, and a rapidly depreciated Myanmar Kyat (MMK) together with appreciated USD. Myanmar’s military regime tightened foreign exchange rules after the nation’s currency lost one-third of its value against the dollar after the coup triggered a freeze on parts of the foreign reserves held in the US and suspension of multilateral assistance, both key sources of foreign currency supplies. While, Most foreign exchange earners are mandated to convert their currencies into kyat at the central bank’s reference rate of 1,850 to a dollar set in

Dropped $30B of Foreign Exchange Reserves in Thailand

          On 9th July 2022, the reporter announced that the situation of bearish Thai Baht was hit to 36 THB per 1 USD at this time. It made the anxiety that will be affected the capital would be flown out, while the Bank of Thailand asserted that they won’t intervene in the Baht, and let it be as the market mechanism, according to the bearish Thai Baht is a middle-level when compared to the near regions, and they will take a part when Thai Baht fluctuation. Mr. Poon Panichpiboon said the Bank of Thailand intervenes in the Baht when it fluctuated by using foreign exchange reserves, in the beginning of 2022, the Bank of Thailand has foreign exchange reserves of $279 Billion, but at this time (report updated on 24th June 2022) foreign exchange reserves remain as $251Billion or dropped as $28 Billion, This cause has reflected that the Bank of Thailand seeks to find any path for Thai Baht, not to have fluctuated too fast.           However, the Thai Baht still

The 7.66 % Thai Baht Inflation

          In the latest report from the Ministry of Commerce in Thailand, compared to the same period in July last year, 2021, was raised by 7.66% in 2022. The report has shown unexpected forecasts from many economic analysts which are only 7.50%. Now, The Thai baht is depreciated to 35.97 per USD (05/07/2022) which has reached the new high Thai baht depreciation record in 16 years, since 2006.           The CPI (The Consumer Price Index in Thailand) is the key way to measure the changes in purchasing trends and inflation. The spike increased in the CPI in the group of Electricity, fuel, and water supply increased by 33.03%, and the group of Energy increased by 39.97% compared to last year. The overall commodities increased by 7.66%.           Moreover, the Russian invasion of Ukraine and the pandemic-related shutdowns in China are the causes of the worldwide energy crisis that led to disruptions in the global supply chain and also leading to all commodities prices.          

The impact of increased interest rates from the FED on Thailand

          Since the US has faced an inflation rate hit 8.6% which is the highest in 40 years, the FED has consideration to increases the interest rate, and the latest update on the interest rate is rose to 0.75% after they had seen the inflation report of May.           Accordingly, How will this impact Thailand? The signal to increase the interest rate is the same as the FOMC meeting recently. The governor of the Bank of Thailand, Dr. Sethaput Suthiwatanaraput said about monetary policy “The interest rate in Thailand is the lowest in the region, but inflation in Thailand is the top rank in the region, so the monetary policy that they use considerately.” This quote was analyzed that the interest rate in Thailand will increase exactly, at present the interest rate is 0.5% but the inflation rate hit 7.1% which is the highest 13 years ago. On 8 June 2022, during the meeting The Monetary Policy Committee has a 4:3 solution to keep the interest rate at 0.5%, the votes were

The Royal Government of Cambodia considers the digital economy as a new source of growth

          The Minister of Commerce, Pan Sorasak, participated in the discussion on the topic of trade in digital service and stated that the Royal Government sees the digital economy as a new source of growth. Minister Sorasak made the remark at the 2022 Annual Meeting of the World Economic Forum in Davos-Klosters, Switzerland.           The Minister of Commerce, Pan Sorasak, stated that the digital economy will be a new source of Cambodia’s economic growth. Meanwhile, he also committed that there are challenges including the legal framework, not only mechanisms for implementing and coordinating fintech which is computer programs and other technology used to support or enable banking and financial services but also the development of a roadmap for fintech policies.           Minister Sorasak added that for the purpose of promoting innovation and open trade in services in the digital sector, the Royal Government of Cambodia will take the actions by the following; established the Digital Economy and Business Committee of Cambodia implemented the Digital Government Policy of Cambodia

BREAKING NEWS: The 0.75% interest rate was rapidly raised by The Federal Reserve (FED) aimed to assist with slower inflation.

          At the current FOMC meeting, The Federal Reserve on Wednesday (15/06/2022) raised interest rates by 0.75% which is the largest move it has made since 1994, it was a decision in order to increase the interest rate by 0.75%. In the former time, On May 4, policymakers have been discussed raising short-term interest rates by 0.50% to a target range due to CPI wost than forecasted between 0.75% and 1.00% in a bid to lower inflation.           But a hot inflation report on Friday (10/06/2022), showing the fastest shifting of price increases since 1981, showed little sign of relieving price pressures in the month of May. Combined with other economic data showing the worst reading of consumer confidence since the 1970s, the pessimistic outlook pushed the Fed to entertain the idea of abandoning its prior plan. From the US central bank forecasting, the US also decreased its economic projections for 2022, stoking recessionary fears which is The Fed’s median GDP forecast for 2022 is now 1.7%, down significantly from 2.8% in