What's with the Baht? ???

[manchega]

same as other currencies, no need for tourism to stop.  

 

we are due the next financial crisis that would be as opportune moment as any,  the Thai baht has been pegged to the us$ before, it can do so again?

as I am sure you know the export will not stop, 

 

what do you think will happen ? hyperinflation and Thai will switch to blackmarket and we will all discover why so many people wear a lot of gold 

[Andycoops]

the baht is strong because Thailand has a lot of reserves, a good growth rate compared to all western economies (4%) and very little debt.

[janclaes47]

Just now, theguyfromanotherforum said:

 

What real estate situation? It's one of the cheapest in the world.

No  way the cheapest, the huts in Biafra are cheaper per sqm........a lot..................but not much below build quality here.

[timendres]

1 minute ago, theguyfromanotherforum said:

What real estate situation? It's one of the cheapest in the world.

I will quickly admit that I have no deep knowledge on the topic, but I have read articles by those considered knowledgeable who insist that there is a bubble there. Hopefully not.

[jonwilly]

In 2001 I was getting B76 to Uk pound, it slowly fell through B73 then down to the B50s with a big drop in 08 to B43.

It then rose to B50-55 before Brexit placed us back in low B40's.

Predicting exchange rates is a fools game, I remember B38 to UK Pound being normal for many years.

 

john

[david555]

Bullet proof baht ....printed on kevlar bills......555 !

[Air Smiles]

2 minutes ago, jonwilly said:

I remember B38 to UK Pound being normal for many years.

 

Which years would they be?

[ExpatOilWorker]

1 hour ago, yimlitnoy said:

Why have you kept your money in CAD?  The trend has been going down for more than 10 years already, enough time for you to react, the bottom is not far I suppose, the CAD is at a 10 years low against the THB:

 

 

 

1 hour ago, Halfaboy said:

Do I see it correct that also the volumes are decreasing ? If so, what would be the reason for this.

The drop in volume and value coincide with the fall in crude oil price. Could be one of many reasons of course.

[soalbundy]

According to Bloomberg a recent fall in the Indonesian currency is a harbinger of things to come for all Asian currencies. For the past two years foreign investment has been pouring into Thailand, they have large foreign reserves,they are investing in infrastructure, have a healthy current account and it is, for the moment, politically stable. Only Trump and the EU (Italy) could put too much salt in the soup.

[simoh1490]

25 minutes ago, manchega said:

same as other currencies, no need for tourism to stop.  

 

we are due the next financial crisis that would be as opportune moment as any,  the Thai baht has been pegged to the us$ before, it can do so again?

as I am sure you know the export will not stop, 

 

what do you think will happen ? hyperinflation and Thai will switch to blackmarket and we will all discover why so many people wear a lot of gold 

Unless a country exports huge amounts to the US AND it has lots of USD it wants to protect, pegging a currency against the Dollar is pointless, it's actually restrictive in many ways plus people will always find ways to borrow around the peg offshore, that's what caused the Asian crisis in '97 in the first place.

 

I don't believe there will be hyperinflation in Thailand, not even close. I think the Baht will continue to strengthen against USD for quite some time, until some point when either the Dollar bottoms out or the BOT decided that THB is too strong and is hurting exports, we're not at either of those two points yet. If BOT does want to weaken the Baht it can do so in a number of different ways but each entails a risk to the country. BOT could, as they have done in the past, impose taxes on capital inflows, define minimum durations for the inflows, loosen THB currency controls completely and a myriad of other ways also, including devaluing the currency. Putting a tax on short-term inward direct investment runs the risk of choking off FDI completely, removing all currency controls runs the very real risk that hedge funds will take a position against THB and cause it to devalue in circumstances not of its making.

 

I expect to see THB remain stronger and get stronger still over the next five/ten years, beyond that it's hard to imagine. As the US and the rest of the western world increase interest rates that will take some of the heat off THB, until inflation here becomes an issue and BOT has to increase rates also.

[uffe123]

I remember when I was getting 55 Baht to the dollar. Now it really sucks like the rest of this place since the military took over. Things are not as rosy as they want everyone to believe, pity the poor Thais. The farmer's are all complaining they cannot make a living and have borrowed buko money from the government bank to buy fertilizer for rice etc. They are all in debt except for the elite of Bangkok.

[simoh1490]

7 minutes ago, Air Smiles said:

 

Which years would they be?

Pre-1997 crash, the Baht was pegged to USD at 25 and that gave a rate against the Pound of around 35 or so.

[ExpatOilWorker]

1 hour ago, simoh1490 said:

Fewer Canadian dollars are buying even fewer Thai Baht, that's fewer tourists and less FDI.

 

MJM - it's not correct to say that BOT never tries to weaken the Baht. They have gone through extended periods where they spent large amounts of foreign currency reserves trying to do just that but it's a no win proposition. The answer lays in changing the rules governing currency controls such as allowing exporters to invest foreign currency overseas and that has been done quite recently.

You are contradicting yourself.

The BOT can purchase baht by using its foreign currency reserves, effectively reducing the number of baht in circulation, but this will strengthen the baht, not weaken it.

Typically central banks use interest rate to manipulate the strength of its currency or in a few cases, like Venezuela, just increase the M2 money supply.

 

[theguyfromanotherforum]

19 minutes ago, timendres said:

I will quickly admit that I have no deep knowledge on the topic, but I have read articles by those considered knowledgeable who insist that there is a bubble there. Hopefully not.

 

Thing is Canadians like to whine about Toronto and Vancouver real estate. But, Canada isn't just these 2 cities.

 

Find me a major country or even developing country where their financial city center is cheaper per square meter.

 

I can buy Ritz Carlton or Shangri La at 50% discount in Toronto comparing to the same unit in Bangkok.

 

And before some guy inevitably quotes numbeo or some other crap site..... no you can not compare the average real estate prices in Bangkok to Toronto as 70% of real estate in Bangkok doesn't have a working Western toilet, so the average can be pretty skewed.

 

 

 

 

[puipuitom]

You mean: what happened with the US and Canadian dollar, the British pound,  as you get less THB's for your money.

 

I live in Euroland... not the slightest problem.  Many ice cubes in a small bucket, which is swung around. One goes up, other goes down...

[simoh1490]

4 minutes ago, uffe123 said:

I remember when I was getting 55 Baht to the dollar. Now it really sucks like the rest of this place since the military took over. Things are not as rosy as they want everyone to believe, pity the poor Thais. The farmer's are all complaining they cannot make a living and have borrowed buko money from the government bank to buy fertilizer for rice etc. They are all in debt except for the elite of Bangkok.

You saw a spike to 53 in 1997, a very brief one, therefore it hovered around 45.

 

I'm pretty certain that Thai farmers always complain, they complain about too much rain, not enough rain, prices too high and prices too low and the fact that they're growing the wrong crop most of the time - it's the nature of being a farmer in Thailand I'm afraid and also that the more they grow and sell, the more they spend. Farmers here are mostly rural poor so for the most part they're in a subsistence industry whilst spending like the middle class, that's why they're complaining and that's why the number of farmers is reducing, year on year.

[simoh1490]

5 minutes ago, ExpatOilWorker said:

You are contradicting yourself.

The BOT can purchase baht by using its foreign currency reserves, effectively reducing the number of baht in circulation, but this will strengthen the baht, not weaken it.

Typically central banks use interest rate to manipulate the strength of its currency or in a few cases, like Venezuela, just increase the M2 money supply.

 

I don't believe I am plus I never said that BOT could or should buy baht, that would have the effect of strengthening THB. If BOT wanted to weaken THB they would need to sell THB against USD nothing else would do the job. 

[Air Smiles]

27 minutes ago, simoh1490 said:

Pre-1997 crash, the Baht was pegged to USD at 25 and that gave a rate against the Pound of around 35 or so.

 

I couldn't find direct rates for back then, but going on £/$:

 

£1 = $1.65 = B41.3(-+100%)

Edited March 6, 2018 by Air Smiles

[ExpatOilWorker]

15 minutes ago, simoh1490 said:

I don't believe I am plus I never said that BOT could or should buy baht, that would have the effect of strengthening THB. If BOT wanted to weaken THB they would need to sell THB against USD nothing else would do the job. 

How would they then reduce their foreign currency reserved?

Burn dollar bills in an oil drum behind the BOT?

 

 

MJM - it's not correct to say that BOT never tries to weaken the Baht. They have gone through extended periods where they spent large amounts of foreign currency reserves trying to do just that but it's a no win proposition. The answer lays in changing the rules governing currency controls such as allowing exporters to invest foreign currency overseas and that has been done quite recently.

[ExpatOilWorker]

39 minutes ago, uffe123 said:

I remember when I was getting 55 Baht to the dollar. Now it really sucks like the rest of this place since the military took over. Things are not as rosy as they want everyone to believe, pity the poor Thais. The farmer's are all complaining they cannot make a living and have borrowed buko money from the government bank to buy fertilizer for rice etc. They are all in debt except for the elite of Bangkok.

The scary part is that the AVERAGE household debt is 84%. When some rich still float in money others down the food chain must have 100% and maybe even 200% of their yearly income in debt.

[simoh1490]

1 minute ago, ExpatOilWorker said:

How would they then reduce their foreign currency reserved?

Burn dollar bills in an oil drum behind the BOT?

 

 

MJM - it's not correct to say that BOT never tries to weaken the Baht. They have gone through extended periods where they spent large amounts of foreign currency reserves trying to do just that but it's a no win proposition. The answer lays in changing the rules governing currency controls such as allowing exporters to invest foreign currency overseas and that has been done quite recently.

You've lost me! Why would they want to reduce their foreign currency reserves?

 

On the currency front: it is demand that causes THB to be strong so selling USD and buying THB causes it to strengthen. Exporters settle trade bills in USD, or at least 60% of them do, and that USD is then sold to buy THB which causes THB to get stronger.

 

If BOT wanted to weaken THB it could sell THB and buy USD, the USD would then become part of their foreign currency reserves holdings.

 

[CH1961]

It's quite simply, the exchange rate goes up and down .. no matter what you think about or want. All the discussion about the reason why is senseless. Live with it or leave.

[ExpatOilWorker]

4 minutes ago, simoh1490 said:

You've lost me! Why would they want to reduce their foreign currency reserves?

 

On the currency front: it is demand that causes THB to be strong so selling USD and buying THB causes it to strengthen. Exporters settle trade bills in USD, or at least 60% of them do, and that USD is then sold to buy THB which causes THB to get stronger.

 

If BOT wanted to weaken THB it could sell THB and buy USD, the USD would then become part of their foreign currency reserves holdings.

 

The below are your words. So how have the BOT spend the currency reserves in a way that will weaken the baht?

 

MJM - it's not correct to say that BOT never tries to weaken the Baht. They have gone through extended periods where they spent large amounts of foreign currency reserves trying to do just that but it's a no win proposition. The answer lays in changing the rules governing currency controls such as allowing exporters to invest foreign currency overseas and that has been done quite recently.

[MaeJoMTB]

55 minutes ago, Air Smiles said:

 

Which years would they be?

The years before 1999.

[Air Smiles]

1 minute ago, MaeJoMTB said:

The years before 1999.

Is that the year your graph starts?

[simoh1490]

7 minutes ago, ExpatOilWorker said:

The below are your words. So how have the BOT spend the currency reserves in a way that will weaken the baht?

 

MJM - it's not correct to say that BOT never tries to weaken the Baht. They have gone through extended periods where they spent large amounts of foreign currency reserves trying to do just that but it's a no win proposition. The answer lays in changing the rules governing currency controls such as allowing exporters to invest foreign currency overseas and that has been done quite recently.

The foreign currency reserves are expressed as USD but actually contain a variety of currencies plus gold, including THB, their primary purpose is to ensure/warranty trade or commercial transactions. Their secondary purpose is to provide a financial pool that can be used to help manage the value of THB, otherwise, where would BOT get the funds from to do its job and fullfill its remit.

Edited March 6, 2018 by simoh1490

[Brunolem]

20 minutes ago, ExpatOilWorker said:

How would they then reduce their foreign currency reserved?

 

Just ask the Swiss...

[darrendsd]

3 hours ago, RichardColeman said:

I look at it this way, if my wife and I can live OK with the pound/baht dropping to 42, then we will be OK when it rises again - eventually.  

Unfortunately I have been hoping it will rise eventually since 2006, 75 Baht to the pound when I first came to live here in February 2006, within the space of a few months it had dropped to 43

 

I have give up hoping now, I've managed to survive on the crap rate for 12 years, if it goes back up great, if not I just have to live with it, as many others do

[Brunolem]

Pictures are sometime better than words...

 

Here are both pictures and words that explain everything...

 

http://www.goldtelegraph.com/oh-canada-looming-economic-meltdown/

Edited March 6, 2018 by Brunolem

[ramrod711]

1 hour ago, theguyfromanotherforum said:

 

Thing is Canadians like to whine about Toronto and Vancouver real estate. But, Canada isn't just these 2 cities.

 

Find me a major country or even developing country where their financial city center is cheaper per square meter.

 

I can buy Ritz Carlton or Shangri La at 50% discount in Toronto comparing to the same unit in Bangkok.

 

And before some guy inevitably quotes numbeo or some other crap site..... no you can not compare the average real estate prices in Bangkok to Toronto as 70% of real estate in Bangkok doesn't have a working Western toilet, so the average can be pretty skewed.

 

 

 

 

The only flaw with Bangkok is that at least 50% of it will be under water within 20 years. I don't imagine that will improve real estate prices.