What's Happening To The Thai Baht

[mpdkorat]

The Thai baht has increased against the UK pound by about 4 baht over the last couple of days. Anyone have an idea whats going on.

[Ulysses G.]

Yes, the baht has gotten stronger.

[wintermute]

Currency speculators and various money traders in the know are utilizing BoT's incompetency to make lots of money on the Thai baht. It's a feeding frenzy right now that will probably screw Thailand in the long run.

[rak sa_ngop]

Yes, the baht has gotten stronger.

But I just got 69.25 baht to the pound at 11.00 am Sat when the x-rates.com website says 65.45!!

I checked 4 currency booths and all were between 69.10 and 69.37

I am changing all my spare pounds today (money that is)!

[goldfish]

Currency speculators and various money traders in the know are utilizing BoT's incompetency to make lots of money on the Thai baht. It's a feeding frenzy right now that will probably screw Thailand in the long run.

Have noticed also, and the fact that the exchange booths are keeping the rate high. Am I correct in assuming this is a two fingers up to thailand and the baht is about to crash?

[wintermute]

Currency speculators and various money traders in the know are utilizing BoT's incompetency to make lots of money on the Thai baht. It's a feeding frenzy right now that will probably screw Thailand in the long run.

Have noticed also, and the fact that the exchange booths are keeping the rate high. Am I correct in assuming this is a two fingers up to thailand and the baht is about to crash?

Supposedly the onshore and offshore markets are kept "separate" and this was all according to plan as stated by Dr. Tarisa. Apparently the offshore markets have limited access to baht liquidity. We'll see what happens but I think they are failing to take into account a lot of other factors. Baht liquidity may be limited for non-citizen investors but i'm sure that Thai citizens are doing plenty of speculating as well. I wouldn't be surprised if several foreign investors in conjunction with Thai partners are rolling the dice with lots of overseas money with various undiscovered loopholes.

[Chang_paarp]

In the business section there are daily threads on the matter all started by the local expert rumour monger.

[dgoz]

Currency speculators and various money traders in the know are utilizing BoT's incompetency to make lots of money on the Thai baht. It's a feeding frenzy right now that will probably screw Thailand in the long run.

Have noticed also, and the fact that the exchange booths are keeping the rate high. Am I correct in assuming this is a two fingers up to thailand and the baht is about to crash?

If it was about to crash, why would it be getting stronger as it is now?

I can't wait to see the next genious move by the General & co to soften the Baht.

The last attempt was so funny it alone was worth the admission price.

[britmaveric]

Currency speculators and various money traders in the know are utilizing BoT's incompetency to make lots of money on the Thai baht. It's a feeding frenzy right now that will probably screw Thailand in the long run.

Have noticed also, and the fact that the exchange booths are keeping the rate high. Am I correct in assuming this is a two fingers up to thailand and the baht is about to crash?

If it was about to crash, why would it be getting stronger as it is now?

I can't wait to see the next genious move by the General & co to soften the Baht.

The last attempt was so funny it alone was worth the admission price.

Setting up for a the big hit would be my assumption - speculate the other way then dump baht like it hasnt been seen before.

[calibanjr.]

Is this an officially sanctioned Topfield Inc. thread?

[LaoPo]

Is this an officially sanctioned Topfield Inc. thread?

LaoPo

[Cyberstar]

Currency speculators and various money traders in the know are utilizing BoT's incompetency to make lots of money on the Thai baht. It's a feeding frenzy right now that will probably screw Thailand in the long run.

Have noticed also, and the fact that the exchange booths are keeping the rate high. Am I correct in assuming this is a two fingers up to thailand and the baht is about to crash?

If it was about to crash, why would it be getting stronger as it is now?

I can't wait to see the next genious move by the General & co to soften the Baht.

The last attempt was so funny it alone was worth the admission price.

Setting up for a the big hit would be my assumption - speculate the other way then dump baht like it hasnt been seen before.

Yes, that's about the only thing left that gives a sensible explanation. However, then we need to take one more step and ask; To whom does et make sense to buy relatively expensive Bahts, just to to later flood the market with it at dumping prize? ... The only sensible answer to this is: Detronized, welthy Thais with an urge to (re)gain powerful positions - a new way of making countercoup, maybe?

[atlastaname]

I am a FX dealer based in the UK. On tuesday the baht was 70.55 to the £, fell a little wednesday to 69.75 , then thursday i saw it drop dramatically to 67.25 and Friday morning UK time it went to 64.9 before closing friday at 65.72. I phoned my Thai friend who by co-incidence arrived in BKK Thursday afternoon after the big drop had started and warned him (this was on Friday) that the baht had gone up in value by an amazing amount and he was due a big dissapointment whe he changed his pounds. I said he will only get around 64.50 instead of the hoped for 69 when he left thge UK . But i just changed them all at 69.33 he said!!

So i don't understand why if the spot rate is 65.72 , you can still get 69.33 in BKK. I have never known this to happen nbefore , although they are sometimes a few hours behind the curve they are not usually THAT behind

[meadish_sweetball]

I am a FX dealer based in the UK. On tuesday the baht was 70.55 to the £, fell a little wednesday to 69.75 , then thursday i saw it drop dramatically to 67.25 and Friday morning UK time it went to 64.9 before closing friday at 65.72. I phoned my Thai friend who by co-incidence arrived in BKK Thursday afternoon after the big drop had started and warned him (this was on Friday) that the baht had gone up in value by an amazing amount and he was due a big dissapointment whe he changed his pounds. I said he will only get around 64.50 instead of the hoped for 69 when he left thge UK . But i just changed them all at 69.33 he said!!

So i don't understand why if the spot rate is 65.72 , you can still get 69.33 in BKK. I have never known this to happen nbefore , although they are sometimes a few hours behind the curve they are not usually THAT behind

There is a discrepancy between the domestic exchange market and the overseas exchange market brought about by the 30% withholding tax imposed by the Thai central bank.

Compare the rates on: http://www.bangkokbank.com/Bangkok+Bank+Thai/main.htm with http://www.xe.com/

News available here: http://www.iht.com/articles/ap/2007/01/26/...y-Disparity.php (International Herald Tribune)

[Meerkat]

I am a FX dealer based in the UK. On tuesday the baht was 70.55 to the £, fell a little wednesday to 69.75 , then thursday i saw it drop dramatically to 67.25 and Friday morning UK time it went to 64.9 before closing friday at 65.72. I phoned my Thai friend who by co-incidence arrived in BKK Thursday afternoon after the big drop had started and warned him (this was on Friday) that the baht had gone up in value by an amazing amount and he was due a big dissapointment whe he changed his pounds. I said he will only get around 64.50 instead of the hoped for 69 when he left thge UK . But i just changed them all at 69.33 he said!!

So i don't understand why if the spot rate is 65.72 , you can still get 69.33 in BKK. I have never known this to happen nbefore , although they are sometimes a few hours behind the curve they are not usually THAT behind

Are you an interbank FX trader?

If yes, I'd recommend you stick to currencies that don't have separate on- and off-shore markets. I'd also recommend not repeating what you've written here to the rest of your desk.

[Neeranam]

So i don't understand why if the spot rate is 65.72 , you can still get 69.33 in BKK.

The moneychangers know something we don't and want rid of as much baht as they have.?

[meom]

Setting up for a the big hit would be my assumption - speculate the other way then dump baht like it hasnt been seen before.

Dump it where exactly? Onshore or offshore?

[LaoPo]

So i don't understand why if the spot rate is 65.72 , you can still get 69.33 in BKK.

The moneychangers know something we don't and want rid of as much baht as they have.?

Hmmm...it's more like they want as much foreign currencies as they can but it could be they know something we don't.

The top moneytraders probably have some good connections on top.

But 'traders' also think this:

Traders also suspected the central bank of intervening in offshore markets in late trade to take the bid for the dollar off a low of around 33.00 baht to ease the psychological pressure in the onshore market.

This article thanks to Meadish_sweetball:

Thai capital controls causing baht to trade at stronger rate outside country

http://www.iht.com/articles/ap/2007/01/26/...y-Disparity.php

LaoPo

[usatrader]

Let me get this straight as it seems counter intuitive to the BOT's stated goals.

The supply of available Bhat to be had outside of Thailand is shrinking. Thusly, driving up the outside of Thailand exchange rate for bhat in a classic supply & demand equation.

While at the same time, inside thailand there is an increasing volume of Bhat available, thus, it is being traded locally at weaker rates of exchange, jus pos, to any major foreign currency.

So in a way this is in effect working to increasing the local Thai supply of Bhat and as well foreign monies optimally needed to get the better rate at the same time.

If you have only Bhat and want to spend it outside of Thailand or for products price in another currency, your costs, in bhat vs any major foriegn currency, will be at least 6% higher for any item valued in that foreign currency.

Yet, if you are bring a foreign currency to Thailand, perhaps hopefully not subject to the very confusing and disjointed 30% withholding rules, you get more bhat in exchange for that foreign currency.

So this, in effect, invites more, non 30% withholding, foreign currency to be exchanged inside Thailand, while discouraging foreign exchange for Bhat outside of thailand.Thus causing far more bhat to remain and reside in Thailand thereby increasing the Bhat Money supply of both Bhat and any internally exchanged foreign currency supply.

Perhaps, I am wrong, but is not increasing ones own money supply a key component to increasing core inflation and is not increasing ones supply of foreign currency equally a core component of increasing the strength of that currency?

As I recall there is this equation which states in general Money supply is important because it is linked to inflation by the "monetary exchange equation".

Perhaps I'm all wrong here, but won't this spiral into combining to make everything in and outside of Thailand more expensive for Thai's and foreigners alike over time. Given the apparently increasing strength of the Bhat and increasing likelihood of inflated prices within Thailand just to keep up with this disparity of a strengthening Bhat that this dual system of disparity is creating?

Forget remotely considering the impact of this confusing 30% withholding rule?

Any ideas on my confusion?