"So what do we need to do?" Liao Xiaohua asked cautiously. He didn't continue to ask about the allies that Zhong Shi mentioned just now, because he knew that any country has one or two friends, and even a country like North Korea has a big country behind it, let alone a relatively moderate country like Thailand.

The reason why he asked cautiously was because he was afraid that Zhong Shi would misunderstand what he meant. You must know that the flagship fund of Tianyu Fund has always been controlled by Zhong Shi himself, and even Andrew can't get involved, so he asked in such a general way.

"Don't worry, I've got the arrangement!" For such a financial storm that swept the entire Southeast Asian region, Zhong Shi could not miss it, in fact, at the beginning of 97, he had already begun to play chess pieces everywhere, just waiting for the moment when the situation broke out, or waiting for him to detonate it himself.

Take Thailand, for example, when Thailand had not raised interest rates in early January, Zhong Shi borrowed a one-year baht worth a total of $5 billion and locked the interest rate at an annualized rate of 8%, while shorting about $1 billion in the forward market.

The reason why he did not borrow more is because his funds are invested in the Russian government bond market, and he can't get out of it for a while. That's a lot of money, considering that even the ever-expanding Quantum Fund now maintains its flagship fund at around $15 billion due to an agreement between Druckenmiller and Soros not to expand the size of the main fund. The surplus funds were invested in the Emerging Growth, Quasar and Quota funds.

At this time, the US dollar interest rate remained at an annualized level of 5.25% for the entire year of '96, but in Thailand. Due to the threat of inflation from an overheated economy, one-year interest rates are usually maintained at 8% to 10% and above, and more interestingly, interest rates vary from bank to bank, but are generally above 10%.

As a direct consequence of this situation, there is a lot of hot money in arbitrage, and even the local banking industry is more than happy to borrow dollars, yen, or marks from overseas at interest rates at least 3 to 5 percentage points lower than the Thai baht, sell them in the market, and then turn them into Thai baht to lend. The total amount of such overseas borrowing is more than $1 trillion, of which more than 90% are short-term loans with a maturity of less than one year, which means that when the value of the Thai baht is unstable. This hot money will flee Thailand as soon as possible. When the time comes, the whole of Thailand will be in ruins.

Seeing that Zhong Shi had already made arrangements, Liao Xiaohua stopped continuing to ask, and instead chatted with Zhong Shi about the current situation, and it didn't take long for him and Andrew to say goodbye and leave. Now that Zhongshi has an understanding of the situation in Southeast Asia. There was no need for them to stay any longer.

……

Bangkok. Central Bank of Thailand.

Governor Luncha. Malaj is on a conference call with his allies. Discuss how to join forces to face the impact of international financial institutions on the Thai baht.

"What about the banking system?" The question was asked by the chairman of the Monetary Authority of Singapore, Ko Shengming, who is more concerned about the creditworthiness of the Thai banking system than the current short selling of the baht.

Unlike the central banks of most countries on Shijie. The Monetary Authority of Singapore does not rely on the rise and fall of interest rates to affect finance, but uses foreign currency exchange to regulate and control the Singapore dollar market.

The reason is that the Monetary Authority of Singapore at this time does not have the power and responsibility to issue currency, and naturally cannot change the increment of market liquidity, so it can only change the circulation of the entire society by changing the form of stock, and then affect the entire financial market, so the Monetary Authority of Singapore has more control over the foreign exchange market to a certain extent than the central banks of other countries.

At this time, Gao Shengming is not worried about the sell-off in the foreign exchange market, because the funds of the Monetary Authority of Singapore and the Bank of Thailand are enough to cope with the current situation. But the reason why the castle is easiest to attack from the inside is still well understood, because Thailand's current economic situation is not very good, and it is rumored that its banking system and financial companies are in extremely bad condition, and there are even rumors that some of Thailand's large banks are on the verge of bankruptcy.

Just last month, Moody's downgraded the credit ratings of three major banks, Ayutthaya, Kyoto and Thai military, from A2 to A3. Moody's report said that if Thai banks do not impose stricter regulations on these banks, the quality of their assets will decline rapidly.

And if the problems of the banking system are not solved, even if the Thai government resists the blow in the foreign exchange market, the collapse of the banking system will still lead to a frenzied flight of funds, followed by another round of new blows.

"I have discussed this issue with Mr. Prime Minister and the Minister of Finance, and a new policy will be introduced soon to further raise the margin for bad debts of banks!" Malaka swore by it.

In fact, with the exception of Singapore, the central banks of Southeast Asia are focusing their attention on the baht. They know very well that if the baht does not resist, then the next one will be one of them, or all of them.

The officials of these central banks are well aware of the enormous harm caused by international funds, especially hot money led by hedge funds. As far away as the whole of Europe, nearly two years ago in South America, these tragic scenes are still vivid, but they did not expect that these scenes would come to Southeast Asia so soon.

"Can you reveal the BOT (Bank of Thailand) position in the forward foreign exchange contract?" The questioner was asked by Shen Liantao, Deputy Chief Executive of the Hong Kong Monetary Authority, who represented the Hong Kong Monetary Authority in the conference call.

"Ahem......" Although he was mentally prepared, but when asked this question, Malajia was still embarrassed, but fortunately, the people who participated in the meeting could not see his expression, and after pretending to prepare, he said: "This position is basically the same as the dollar we sold, and the amount is about 5 billion US dollars." ”

In order to cope with selling in the spot market, Thai banks have to buy Thai baht in US dollars in the spot market, and in order to preserve their value, they have to buy US dollar contracts in the forward market, which forms a counterparty with international speculators. The side that shorts the baht sells the baht in the spot market and the baht contract on the forward contract. Putting double pressure on the Thai side.

The location of such forward contracts is not fixed, some are in London, some are in New York, and some are in Singapore. According to the news from the Singapore Exchange, during this period in the forward foreign exchange market of Asian currencies, the total daily trading value is as high as 6 billion US dollars, and the volume of the Thai baht is the fastest growth, which means that the main force of the current international capital attack is in Thailand.

"The most important thing at the moment is to closely monitor the movement of the market. Especially in the forward foreign exchange market, once there is a huge sell-off. We need to pay attention to the spot market at the first time. I hope you can help me then. This time, without waiting for others to ask, Malajia preemptively said.

Although this kind of dialogue is very passive, after all, he has a request for others, and he has to bow down. Although it is very aggrieved. But the Malagars still have to keep their heads down. begged in a low voice.

There was a low murmur on the other side of the phone. Half a day later, Gao Shengming was the first to speak: "Don't worry, Singapore will definitely support the Thai baht in this regard." We've got $10 billion ready to get in at any time. ”

The reason why Singapore is so supportive of Thailand. The first is that the Thai economy is inextricably linked to them, and the second is that most of the short selling of Thai baht contracts is carried out in the Singapore futures market, and Singapore is also more active morally.

Naturally, Singapore also has its own considerations, although Thailand has been actively building a regional financial center in recent years, but it still cannot be compared with Singapore, Hong Kong and other financial centers that have been around for some years. Through this active intervention in the market, Singapore wants to let the world know that Singapore is not just a small place, and it will not be manipulated by others.

Hearing the promise of the Singapore side, Malaka breathed a sigh of relief, although he had long known that the Singapore side would help them with all its might, but at this time, he heard Gao Shengming, who represented the official, say it, and he let go of a heart hanging in his throat.

"We also have to pay attention to the dynamics of the forward market, I'm afraid we can't give you too much support, and it's estimated that there is only $1 billion." With the first statement, others also took a stand, this time by the governor of the Bangko Sentral ng Pilipinas (BSP) Gabi. Simson. Like Thailand, the Philippines has also suffered a fierce attack on international travel funds in the forward market, although the situation is not as serious as Thailand, but it has also reached the point of urgency.

"I'll need to discuss it with Mr. President, but we'll buy it when we need it." After the Philippines, Malaysia and other regions successively expressed their positions, Shen Liantao said.

Although Malajia is not very satisfied with Hong Kong's statement, he also knows that Hong Kong is at a juncture of historical changes, and it is difficult for Hong Kong to make too strong support in this situation.

"In addition to our support in this regard, the Thai government should also do something to limit the liquidity of investment funds so that they cannot succeed." On the call of Zuihou, Gao Shengming suggested.

"Yes! We will soon introduce regulations that will restrict local banks from lending money to foreign investors, and at the same time significantly increase the level of offshore lending rates, making it much more expensive for them to borrow. "Although we have not received any commitment from Hong Kong, Malajia knows that it is now the most promising result. In a big mood, he didn't care about the rules of secrecy, and revealed all the jihua of their internal conspiracy in one breath.

Seeing that the Thai side has also made full preparations, several figures who are prominent in the financial circles of Southeast Asia are relieved, and they believe that with their national strength, they will definitely be able to cope with this currency crisis.

Only Shen Liantao, who hung up the phone, was sullen, and he repeatedly chewed on Malaka's sentence of "restricting local banks from lending funds to foreign investors", as long as the Thai side goes down with an administrative order, the entire local Thai bank must follow it, but as for Hong Kong, a place known as a free port, it is impossible for the HKMA to issue such an order.

If international hedge funds hit the Hong Kong dollar, what can Hong Kong do in addition to raising the call rate? Shen Liantao fell into deep contemplation. (To be continued......)

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