ExpatOilWorker

I deliberately wanted to keep the GBP out of the discussion, as central banks still hold pounds in their currency mix. The debate is whether USD is involved in a tourist transaction between two banana republic currencies. I think yes, even with a Yuan transaction, you seem to think otherwise. Paul Krugman has a short dollar write up, that kind of support my side of the argument. The same article is available for free in a local Thai newspaper with the capitals name in it. https://www.nytimes.com/2023/02/03/opinion/us-dollar-reserve-currency.html

What kind of visa do you plan for your mother?

In many ways historically Russia is a great nation, not only in size bit also cultural, literature, science, sports engineering and chess. If you could hit the reset botton in 1917 and insert a western style government, we would all play second fiddle to Russia today. With the current leadership everything in Russia ???????? is sh!t, except of course..... p!ss!

True, but you also don't see Russians voicing their anti-war feelings on anonymous Internet platforms ????. Silently, many Russians probably feel that Russia deserve international respect as a great nation.

So only 3 then? I think we can put the whole murder island theory to rest.

Time for a serious question then. Out of the 24 deceased you mentioned earlier, how many are confirmed murdered? The guy that was shot 5 times + the young British couple, any more?

Soon it will be 5 dive instructors and one spectator on the missing person list.

Lets not forget that the Fed have a dual mandate of "pursuing the economic goals of maximum employment and price stability.", so while Powell might be OK'ish with inflation he is probably more worried about employment numbers if and when the next recession cycle come. I don't think Paulson and Bernanke had a crazy fun time in 2008. When discussing USD exchange rates it is impossible not to notice the whopping $500 billion US trade deficit. If any other country had that kind of deficit, they would be where Pakistan and Sri Lanka are now, begging IMF for handouts. So is the US trade deficit good or bad? In fact, it is neither. It is a must and a stabilizing effect for the world economy. As the world economy grows central banks around the world need ever larger amount of US dollar, which they get courtesy of the American consumers. Bretton Woods still works, after nearly 80 years.

Since you seem to have all the information, what is your opinion on Michael's death?

Child birth was not kind to Isabella and she took advantage of too many free tortillas at the factory, as far as Fernando is concerned she might as well just join the pile of women resting around Juárez. Noi is important for our story. Fernando is hard at it and soon BOT have an extra $1,000 on their balance sheet, but then Noi rushes out and buy the latest iPhone. Apple transfer the profit back to Cupertino and the BOT have to let go of their $1000. That is not a problem as Thailand now have +1 iPhone and Noi have increased her earning potential thanks to Tinder. Sadly Noi soon drops her new phone and it shatters in 1,000 pieces. Noi and Thailand ow have nothing. That is the reason FDI is more Important for Thailand. The BOI is very picky of what industries they let invest in Thailand. Fixed asset investments that support an export industry is what they want. They is why we have everything from Ecco shoes, Danish porcelain, Japanese car manufacturers to Western Digital. Vietnam is doing the same thing and that is why we have seen Samsung and Panasonic relocation in recent years.

I didn't mean to imply that the central banks are involved in every single visa transaction, each national bank settle their foreign currency holdings daily, probably around noon.

What kind of sports, track runners? https://twitter.com/PaulJawin/status/1619632961414111235?s=20&t=leDt_bFMub2U-O2EMZPSgA

I agree with your last statement, that the USD/THB exchange rate does not change, but for a different reason. Fernando withdraws 5,000 baht from a Kasikorn ATM, 3,000 pesos is deducted from his Banco Amigo account in Mexico. The clearing bank in NY don't want pesos, so Banco Amigo ask Bank of Mexico for $150 which they wire through the clearing bank to Kasikorn Bank. Kasikorn Bank may hold the $150 on their books for a few days, but since Fernando keeps coming back for more, soon Kasikorn hands over the $150 to BOT and get another 5,000 baht. BOT have now increased the foreign reserve of Thailand with $150, but at the same time the broad money supply M2 has been increasing by 5,000 baht. In short, there are more baht in circulation, but they are backed by an identical increase in foreign reserve, hence supply and demand is unchanged and the Thai baht exchange rate should stay flat.

https://assessprice.treasury.go.th/

12 plots of land for sale, some more, some less than 3 million per rai. https://www.kasikornbank.com/th/propertyforsale/search/pages/index.aspx?province=50&propertyType=01&

The VISA card system seems to be a membership organization operating within BIS using 180 different transaction currencies. That does however not answer how BOT settle cross-border transaction, but since BOT mainly hold USD, I suspect most exotic tourist currencies, including Yuan, is converted to USD. d53p16.pdf

When Fernando from Mexico withdraw 5,000 Baht on his ATM card to pay Noi for services rendered, don't the BOT settle the transaction in USD with the corresponding Mexican bank? Somehow I don't envision BOT having a special Peso shelf in their underground vault. Similar, when the Chinese locust arrives, they also leave a trail of greenbacks and not redbacks behind.

I think our good Chartchai under-play the Importance of tourism when he is looking at the shot-term 2 week swing in foreign reserve. Once tourist numbers are back at 3 million/month $1 billion of "free" hard currency will roll in every week. Capital inflow on the other hand can go both ways and dissappear as fast as it came in. All tourist are not alike, some arrive with very deep pockets: Exodus of Wealthy Chinese Accelerates With End of Covid Zero https://www.bloomberg.com/news/articles/2023-01-25/rich-chinese-plan-to-leave-with-money-with-covid-zero-s-end

If tourism is only playing a very small role in the value of the baht, then it shouldn't be included in the list of factors that influence the Thai baht.

The sky was (correctly) falling for the good Chartchai in September 2022, but then in November/December things turned around and FCR made back some of the losses and the baht rose again in value. Maybe the BOT was doing the right thing at the time after all. https://www.bot.or.th/App/BTWS_STAT/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

Tourism of course show up on the current account balance sheet, but is it really classified as export? In that case outbound tourism should be import, bit confusing.

FDI is important enough for Thailand that they have separate immigration offices for BOI visa holders, but is it really big enough to affect the baht? Using TAT's numbers (I know!) of $2,000 spend per tourist, 15 million annual tourist per year in the above 30 years period and 35 baht/$, the 6.8 trillion baht FDI is "only" 21.6% of the 31.5 trillion baht tourist revenue.

One interesting and surprising aspect of capital flow is that a currency often gets stronger after a major national disaster, such as a large earthquake or like in Japan tsunami. The reason is that insurance companies repatriate a lot of money to pay for the damage claims.

This it fascinating reading and the OP might have something to add as he seems to understand the subject better than most. China's influence over Thailand sure is growing, but will this also slowly erode the Thai baht's dependency on the US dollar? https://twitter.com/matthew_pines/status/1616467262256607232?s=20&t=H7N7_ycEnBr25xUL5VVQZg