Will This Baht/dollar Exchange Work?

[billaaa777]

I am going home to the US in February for two weeks. The difference in the international exchange rate and what the Thai Banks are offering should provide me a way to make a little money, I think. This is my plan, will it work?

I am going to wire 330,000 Baht to my US bank account before I leave, that way I will stay under the $10,000 limit that would be reported to the IRS. The international exchange rate is 33.5 right now.

When I get back to the US I will cash a check and bring back $9,800, again staying under the $10,000 limit. Since the Thai banks are paying approximately 35.50 for a dollar now I will sell them to the bank. I figure I would make somewhere around 18,000 Baht after wire fees.

Am I missing something here? Is this going to work?

[britmaveric]

You are assuming the in country rate will be higher - I'd assume that won't stay like that for long.

[billaaa777]

You are assuming the in country rate will be higher - I'd assume that won't stay like that for long.

When I go to “http://www.xe.com/ucc/” the most accurate site I know of to get up to date exchange rates the US dollar in now at 33.5170 to the Baht. When I was at my bank yesterday the bank was buying dollars at over 35.50 Baht.

I will be going home for two weeks.

I just can’t see how knowledgeable people that can get money in and out of the country are not making millions on this difference in exchange rates. Unless I am missing something.

What am I missing?

[backflip]

If you were intelligent and knowledgeable, you wouldn't be missing anything. You are missing the details, you are missing the point, you are missing the big picture. Put on your thinking cap!

[billaaa777]

If you were intelligent and knowledgeable, you wouldn't be missing anything. You are missing the details, you are missing the point, you are missing the big picture. Put on your thinking cap!

What a comprehensive post. You must be really proud of yourself. One more clown at this site!

[naka]

You are assuming the in country rate will be higher - I'd assume that won't stay like that for long.

When I go to “http://www.xe.com/ucc/” the most accurate site I know of to get up to date exchange rates the US dollar in now at 33.5170 to the Baht. When I was at my bank yesterday the bank was buying dollars at over 35.50 Baht.

I will be going home for two weeks.

I just can’t see how knowledgeable people that can get money in and out of the country are not making millions on this difference in exchange rates. Unless I am missing something.

What am I missing?

You are missing the fact that the US bank will give you nothing near the rate

you saw on XE.com

Look ... this is really simple ... The bank can offer you any rate they want

and for your small transaction they will offer cr@p rates ... Up to you !

Naka.

Edited January 28, 2007 by naka

[Gaudente]

You are assuming the in country rate will be higher - I'd assume that won't stay like that for long.

When I go to “http://www.xe.com/ucc/” the most accurate site I know of to get up to date exchange rates the US dollar in now at 33.5170 to the Baht. When I was at my bank yesterday the bank was buying dollars at over 35.50 Baht.

I will be going home for two weeks.

I just can’t see how knowledgeable people that can get money in and out of the country are not making millions on this difference in exchange rates. Unless I am missing something.

What am I missing?

You are just missing the sentence you quoted. That difference (that is not so much after you subtract all the exchange fees and travel expenses related to the operation you planned) is not going to last.

First you do not know if tomorrow morning your bank will still be paying 35.50 $ for your baht. Second , if it does, you have no guarantee that once the baht wired will get to the USA the exchange rate will be again 33.50.

Such differences are exceptional and extremely rare market anomalies that for sure do not last long.

Edited January 28, 2007 by Gaudente

[billaaa777]

You are missing the fact that the US bank will give you nothing near the rate

you saw on XE.com

Actually, when I wire funds back to the US, which I do frequently, I get very close to this rate.

That difference (that is not so much after you subtract all the exchange fees and travel expenses related to the operation you planned) is not going to last.

I am flying home anyway, so that is not an expense to be considered. My wire fees run me around 700 Baht.

Such differences are exceptional and extremely rare market anomalies that for sure do not last long.

Actually the Bank of Thailand has created two markets for the Baht, an international market and domestic market.

First you do not know if tomorrow morning your bank will still be paying 35.50 $ for your baht.

This is true, and the reason I created this thread. Hopefully, to have an individual extremely knowledgeable in the exchange market to explain how this can be happening. Because I sure don’t understand how you can buy Baht at one bank for 33.50 and another bank will buy them from you for 35.50. How, can this be?

[nikster]

You are missing the fact that the US bank will give you nothing near the rate

you saw on XE.com

Actually, when I wire funds back to the US, which I do frequently, I get very close to this rate.

That difference (that is not so much after you subtract all the exchange fees and travel expenses related to the operation you planned) is not going to last.

I am flying home anyway, so that is not an expense to be considered. My wire fees run me around 700 Baht.

Such differences are exceptional and extremely rare market anomalies that for sure do not last long.

Actually the Bank of Thailand has created two markets for the Baht, an international market and domestic market.

First you do not know if tomorrow morning your bank will still be paying 35.50 $ for your baht.

This is true, and the reason I created this thread. Hopefully, to have an individual extremely knowledgeable in the exchange market to explain how this can be happening. Because I sure don’t understand how you can buy Baht at one bank for 33.50 and another bank will buy them from you for 35.50. How, can this be?

It's weird which is why it won't last. Certainly not 2 weeks. Your risk in this scheme is that the baht goes below 33 in the meantime. However, I would think there will be another currency intervention. After all devaluing a currency really isn't all that hard - just start the printing presses....

The government doesn't do that solely to keep inflation in check. But IMHO there will be a threshold where they can take it no longer. Exporters are hurting severely right now.

I think I will cut my expenses for the time being and wait for the baht to go back up, even if its short term. The general consensus is that the Baht rides on the Chinese Yuan which will continue to appreciate long term. There is no stopping it.

While I think your scheme has a good chance of working I am not encouraging you to speculate on currency. There's a risk involved. Who knows maybe the Baht will go back to 25 / USD where it was 10 years ago...

Edited January 28, 2007 by nikster

[backflip]

"One more clown at this site! "

You looked lonely, so I thought I'd join you.

[PeaceBlondie]

Why bother keeping your total amount under US$10,000? You can transfer a larger amount, and you have a legal reason to do so, coming and going. I was told that when you enter a country and declare a large amount of cash (large enough to report, but legal to bring in) there's no law broken, unless you falsify the amount you're bringing in. In fact, if the IRS got reports of both over-$10,000 transactions, they would balance out. At least, when I classified income tax returns for the IRS and saw currency transaction reports that balanced out, I overlooked them. That was a long time ago.

Why not transfer $50,000 instead of just $9,800?

One more thing: after 9/11/2001 attacks, some financial institutions in the USA started invoking a little-used clause and reported transactions under $10,000 to the IRS. My Chinese friend got reported for depositing about $6,000 cash into his credit union account.

[kayo]

If you were intelligent and knowledgeable, you wouldn't be missing anything. You are missing the details, you are missing the point, you are missing the big picture. Put on your thinking cap!

What a comprehensive post. You must be really proud of yourself. One more clown at this site!

I resemble that remark!

[rogerinthai]

You are missing the fact that the US bank will give you nothing near the rate

you saw on XE.com

Actually, when I wire funds back to the US, which I do frequently, I get very close to this rate.

You may have in the past, but not with the current Thai banks rates. You must check the rates at the very same time. They change every day, as you know.

By the way, in general, arbitrages do temporary exist, you just need to be quick enough to grab them before they close down.

Edited January 28, 2007 by rogerinthai

[topfield]

What are all these hairbrained schemes involving the USA and the IRS ? Why travel thousands of miles ?

Why risk transfers where the rate may have changed by the time the money is safely banked.

Are you not aware that the offshore baht rate would apply in Malaysia ?

Are you not aware that it is legal to take 500.000 baht in thousand baht notes to Malaysia (and there seems no limit on how often you can do this.)

You've got it ! Yes there are zillions of change offices in Penang marked 'pengular wang' or similar.

Hold your horses...what about the dozens of split villages straddling the Thai-Malaysia border. They don't even need to travel ! The villagers should all be multimillionaires by now......SO WHAT IS THE CATCH ??

[Sophon]

If you were intelligent and knowledgeable, you wouldn't be missing anything. You are missing the details, you are missing the point, you are missing the big picture. Put on your thinking cap!

What a comprehensive post. You must be really proud of yourself. One more clown at this site!

I resemble that remark!

????

I don't get it, how can you resemble a remark? (did you mean resent?)

Sophon

[wishIwas49]

Hello. I'm hoping for some quick feedback from those of you in Thailand now.

I am flying to BKK from Bahrain on Tuesday with T GF. We see on XE.com that the dollar is 33.5 to Baht mid-market. Thai GF is calling folks in BKK now and is being told the dollar is still exchanging at 35.6.

Plan was to change local Bahrain currency to Baht before leaving here, but if it is true that outlets are still exchanging at 35.6 (+/-.1 either way) then it would make sense to bring dollars and change them in Thailand vs. Bahrain currency to Baht. At the amount I'm turning into Baht, the difference is more than 12k Baht in my favor IF 35.6ish is accurate.

Can anyone confirm the window/hand to hand exhange rates in country please?

All the best,

Jay

[bkkandrew]

Why not just buy at the note changers, such as super rich in pratunam, seemingly at onshore prices, i.e. 35+??

[backflip]

Sophon was using a funny line from the old 3 Stooges comedy, where Curly misues the word "resemble".

When you don't understand what you are doing, or the reason why, you are likely to screw up. What the OP is trying to do is referred to "arbitrage of exchange rate transitivity" - specifically in a situation known as "two or more goods in one market". If he knew that, he'd understand what is is trying to do is fraught with danger. Too, the OP wants to limit currency movement so that his activity is not monitored by the US government. It is not illegal for him to perform currency speculation - at least from the US perspective. So, either he's doing something truely illegal - laundering drug money, for example - or he doesn't know the law. Again, if you don't know the law, you run the risk of tripping yourself up.

[IMA_FARANG]

I am going home to the US in February for two weeks. The difference in the international exchange rate and what the Thai Banks are offering should provide me a way to make a little money, I think. This is my plan, will it work?

I am going to wire 330,000 Baht to my US bank account before I leave, that way I will stay under the $10,000 limit that would be reported to the IRS. The international exchange rate is 33.5 right now.

When I get back to the US I will cash a check and bring back $9,800, again staying under the $10,000 limit. Since the Thai banks are paying approximately 35.50 for a dollar now I will sell them to the bank. I figure I would make somewhere around 18,000 Baht after wire fees.

Am I missing something here? Is this going to work?

Maybe, but some cautions are:

1. Have you ever actually tried to wire that amount of Baht out of a Thai Bank? Can you prove it was legally earned in Thailand? Have you proof you paid the taxes in Thailand on the money? Do you have a work permit or are you on a Tourist visa where employment in Thailand is specifically prohibited?

2. Although the amount you want to change is less than $10,000 it is possible that any amount over $5000 in a one-time transaction may raise questions with U.S. security.

3. There will be bank fees that will cut into your profits.

But if it is possible, Good luck.

[billaaa777]

Plan was to change local Bahrain currency to Baht before leaving here, but if it is true that outlets are still exchanging at 35.6

Can anyone confirm the window/hand to hand exhange rates in country please?

As best as I can determine, you can find out the approximate local exchange rate by looking at the rate The Bangkok Post quotes on its front page. Which is now somewhere around 35.80.

http://www.bangkokpost.com/

[PMK]

It's a deliberate misuse of words in a way that someone who is not a native English speaker might make. Funny to some people - mostly under the age of 10.

I don't get it, how can you resemble a remark? (did you mean resent?)

Sophon

[PMK]

Maybe, but some cautions are:

1. Have you ever actually tried to wire that amount of Baht out of a Thai Bank? Can you prove it was legally earned in Thailand? Have you proof you paid the taxes in Thailand on the money? Do you have a work permit or are you on a Tourist visa where employment in Thailand is specifically prohibited?

That is what I was wondering about. It's been a very long time since I inquired so I thought maybe things had changed, but when I looked into it, exporting baht was tough, even with a work permit (which I had at the time) or even with receipts proving when and how funds were originally transferred in. With a work permit it could be done, but as you suggest, you had to have paperwork proving taxes had been paid and the outgoing funds were excess employment revenue.

In fact, I remember a long time ago an employee of the German Embassy complaining that he could not transfer out enough money to pay his credit card bill.

[chiang mai]

I'm holding a cashiers cheque for 6 mill + baht earned from the sale of my condo. and I am required by law (so HSBC tells me) to repatriate and exchange the funds as soon as the cheque is presented. I can hold the cheque (for up to six months) and wait and see if the rate improves in my favor; or I can tell HSBC in BKK to convert the baht at 70.68 into sterling and then ship it out; or I can tell HSBC BKK to transfer the baht to Hong Kong and have HSBC HK convert it into sterling at 67.4. Easy choice methinks!