When will Thai Baht get back to reality

[robertson468]

13 hours ago, tingtongtourist said:

just a few points:

 

-thai stock market: seems healthy and is actually gaining on performance instead of being dragged down with BS of western fund managers and dodgey loan practices.

 

-Thailand has little exposure to western corruption of the banking system.

no government forced superannuation policies that force people to pay into but which will fail due to chrashes and inflation once interest rates go up again. 

 

-no triple taxing of the lower and middle class while the rich pay nothing.

 

-yes, they had the TomYumGoong crisis but the US banking meltdown did not destroy them because of little exposure to IMFs.

 

- thai have healthy export of textiles and food to neighbouring countries and export afar also.

 

- toursim has nearly doubled in recent years.

 

- despite what the moaners say. Thailand has a pretty easy immigration policy which does attract a lot of foriegners who bring money into the country.

The big danger for Thailand is the level of debt, which is raising a few eyebrows in the finance markets, however, that is controlable with the right loan principals.  Remember also that Thailand is an emerging economy, whilst the ones you are making comparisons with are well developed, although their annual increase is GDP relatively low.  Maybe, but only maybe the Sterling will strengthen once we have disengaged ourselves from the Euro.  The indicators are looking good, but who knows what is round the corner?

[LomSak27]

12 hours ago, tingtongtourist said:

thai stock market: seems healthy and is actually gaining on performance instead of being dragged down with BS of western fund managers and dodgey loan practices.

 

-Thailand has little exposure to western corruption of the banking system.

no government forced superannuation policies that force people to pay into but which will fail due to chrashes and inflation once interest rates go up again. 

I burst out laughing after reading these first two.

 

I assume the government keep it propped up, if only for appearance sake. However I don't think it would fall that far if they let it float.
 That said I believe the economy is not well, as both lower and higher educated Thais I know, have had trouble finding work. More telling, some scions of Poo Yais, supporters at least in the beginning of the current rulers, have openly stated " they have ruined my future" These are grads of Chula and Thammasart, and this in the last six months,  by the way. So yes things are not well .... I hope things improve, as a bad economy hurts too many people who deserve better.

[Farang99]

15 hours ago, Lamkyong said:

i would be highly surprised if anyone here can come up with an acurate answer  in LAY MENS terms you will be inundated with lots of  theories    and charts similar to your post   sorry i can not offer any help  back to the fifty mark eould be nice (G.D.P.)

70 would be even nicer - as it was when I first came here

[Farang99]

9 minutes ago, robertson468 said:

The big danger for Thailand is the level of debt, which is raising a few eyebrows in the finance markets, however, that is controlable with the right loan principals.  Remember also that Thailand is an emerging economy, whilst the ones you are making comparisons with are well developed, although their annual increase is GDP relatively low.  Maybe, but only maybe the Sterling will strengthen once we have disengaged ourselves from the Euro.  The indicators are looking good, but who knows what is round the corner?

That is my hope  - that the £ will recover once Brexit has happened. But this  will only work if the Brexit is a clean break with no leftover bits.

[Srikcir]

36 minutes ago, sammieuk1 said:

Thai exports must be paid for in local currency's of the recipients

As I recall:

Typically, the foreign reserve that consists of currencies (the World Bank XDR basket consists of the following five currencies: USD , Euro , Renminbi, Japanese yen, and British pound) used to pay for imports. US imports from Thailand are paid in USD, not baht. Same for the other four countries in the currency basket.

A nation that has insufficient foreign reserves to conduct import transactions using XDR currencies will have to pay a currency conversion fee.

However, countries can make trade agreements to honor the currency of the exporting country for payment. Such is the case between China and Thailand. But there is no "must."

China also hasa state-owned offshore company that can bypass use of currency with nations having insufficient XDR currencies (ie.,.  renminbi) through a barter process.

[NoBrainer]

Well Pre 1997 it was at around 24 to the USD for a very long time.

 

And that is probably the real value, when all things are considered.

At 24 to USD it makes the prices of goods and services more inline with the rest of the world.

 

Can't even go out for lunch in most countries without dropping $100.00 these days.

 

 

 

[free123]

Well I am not an economical expert...but i figured asia is growing in economy and power while the west os declining on all levels....thai economy is strong europe is weak...europe needs to keep their money weak otherwise nobody would buy their trash...( many times goods from china better and cheaper ).similar to usa...the people in thailand grow in wealth a strong and healthy middle class has developed that creates local demand..in europe the middle class slowly but steadily vanish away...finaly there you have 80percent poor that are dominated by powerful banks...tax here is low very low enterpreneurship is welcome...europe the asdolute opposite....etc etc...and the junta give stability and security...for example in bkk at night i feel very much more secure that in any europaen city in daylight...plus they did not have at first the bank and now the refugee bs that europe cant handle...here illegals get put in the hole where they belong in europe they stuff money up their arse...now all this shows up in the currency exchange rate so simple...remember weak and corrupted economic systems banladesh pakistan europe etc. have weak money powers in relation to strong growing lands like thailand singapore etc...why i see so many western people here because their own countrys are up the arse crime and corruption ridden .....now china plan and will realise that massive international silk road project and europaen countrys growl up their arse to get a tiny piece of the cake...all the europaen puppets went to the big  chinese leader to beg him not to forget them with this project....europe at present times cannot even build airports anymore ( germany Berlin ) ...their rulers are weak and towards their own people irresponsible...they sell out similar to senegal...

Edited May 9, 2018 by free123

[Sam Lin]

12 minutes ago, NoBrainer said:

Can't even go out for lunch in most countries without dropping $100.00 these days.

 

Uh, wow. How many people are you feeding at lunch, and what is "most countries?"

[Jane Dough]

15 hours ago, Unsane said:

What is reality?

Yes indeed. Hopefully for all those resident in Thailand with baht it will get back to the halcyon days of 32 baht to the pound experienced in the early 1980s. We demand even cheaper holidays in the UK!

[theguyfromanotherforum]

Lol.... get used to it. Expect the price of your "girlfriends" to keep going up along with your McMuffins.

 

The baht is high because Thailand is a developing country and the economy keeps going at the higher rate than your "Western" countries that stopped producing anything 2 decades ago. The exchange is completely justified.

 

My wife's job is practically guaranteed for the next 10 years because BTS/MRT keeps expanding, while in Canada they do research proposals for 4 subway stations that last a decade. A few months ago I did an example how how I lost $100,000 Canadian dollars in 4 years due to a strong Thai baht. So, what am I going to do? Should Thais be kept poor because some of you are complaining about the price of a bar-fine?

 

The other day I was reading how some sexpat tefler was complaining about Cambodian currency not going up and putting his "retirement" at risk. Cry me a river!!! I guess people should keep being exploited, so you can retire in style in a 3rd world country.

 

You guys make me cry..... from hilarity.

 

[LomSak27]

Looks like the chirpers are all here. Why even bother.

Paxton threw a no hitter in Canada no less. Looks like I will get the video feed too. This place is tanking.

[OTipawan]

The self destructive depreciation of major currencies is one thing.

The other thing is domestic. Thailand is kind of recreating all the preconditions toward the eve of bubble blast in Japan last century, not even to mention this country had a notorious record of crisis before. 

No one knows when, but eventually these glorious exchange rates will be gone in a finger snap together with the condo market.

[HHTel]

Some may remember that the pound traded against the baht at around 38 before the crash of '98.  Following that the baht went through the floor giving in excess of 80 to the pound for a while.  So with Brexit and the baht strength, the rate is somewhere between 42 and 43.  Still higher than before the crash.  So where is the 'reality'?

 

[IsaanFam]

The difference is, the West is gradually going down hill with a steady slow past and you can just adopt to it, while Thailand is doing great in economic sense, you will never know what happens tomorrow as it is an absolutely unstable country.

[Brunolem]

12 hours ago, swissie said:

Exactly. It's not the Thai Bht getting stronger, it's the "western currencies" getting weaker.
Why? Economically, politically, militarily the "West" has peaked, while the "Asian-Dawn" has just begun. (You ain't seen nothing yet).
10 years from now, the Bht (and other asian currencies) will likely be another 25-30% higher. Perfectly normal.
Cheers.

Exactly!

 

And don't forget that the West (including Japan) has been printing money like mad since 2008.

Sooner or later, more money for roughly the same amount of goods leads to currency depreciation...sometime to complete destruction...

On top of that, most Western countries have a public debt reaching 100% of their GDP, which is a sure sign of coming financial troubles.

Meanwhile, the Thai economy is not infected with these financial diseases.

 

[IsaanFam]

25 minutes ago, theguyfromanotherforum said:

Lol.... get used to it. Expect the price of your "girlfriends" to keep going up along with your McMuffins.

 

The baht is high because Thailand is a developing country and the economy keeps going at the higher rate than your "Western" countries that stopped producing anything 2 decades ago. The exchange is completely justified.

 

My wife's job is practically guaranteed for the next 10 years because BTS/MRT keeps expanding, while in Canada they do research proposals for 4 subway stations that last a decade. A few months ago I did an example how how I lost $100,000 Canadian dollars in 4 years due to a strong Thai baht. So, what am I going to do? Should Thais be kept poor because some of you are complaining about the price of a bar-fine?

 

The other day I was reading how some sexpat tefler was complaining about Cambodian currency not going up and putting his "retirement" at risk. Cry me a river!!! I guess people should keep being exploited, so you can retire in style in a 3rd world country.

 

You guys make me cry..... from hilarity.

 

 

I get you however let people complain because it's our freedom of speech to complain about stuff neither you or me or them can change.

[Wake Up]

15 hours ago, ELVIS123456 said:

Yeh - anything around 28-30 Baht to the AUD would be nice too (and normal).  I guess it will eventually change back.  But I just cannot understand that the currency of a 3rd world country that is being run by a military junta, can run the course that it currently is running.  Is the US doing soemthing to prop them up, and create an economic buffer against China?? It has to be something along those lines to last for so long, because it aint due to the normal economic and interest rate cycles.

 

 

Drive north and south and west and east and you see all the construction cranes, new businesses both international and local and improvements to infrastructure.  Then go to Burma and Laos and Cambodia and you will see your third world comments about Thailand are not accurate IMO. 

[nickmondo]

5 hours ago, Ks45672 said:

Hopefully it continues and the baht ends up breaking records against the dollar pound and euro

what a stupid thing to say.  Reason being, the tourists wont come here, and the ex pats will leave in their droves.

[jkcjag]

Why expect a slight depreciation under a Junta? It's government is much more stable than the previous ones.

[Ks45672]

3 minutes ago, nickmondo said:

what a stupid thing to say.  Reason being, the tourists wont come here, and the ex pats will leave in their droves.

Like that would be a bad thing...... 

[nickmondo]

1 minute ago, Ks45672 said:

Like that would be a bad thing...... 

Ks45672, I think you have perfected the art form of making stupid comments.  :-)

I dont think the ruling Junta would be too impressed if the walking ATM's all decided to leave!  :-)

 

[Laza 45]

16 hours ago, ELVIS123456 said:

But surely it is not related to economic performance or interest rates, as they are both basically the same as they were years ago. And also wouldn't it be better for Tourism and Manufacvturing if the Baht was lower. Something is not right IMO.

Actually I think it is related to economic performance and interest rates.. Thailand enjoys a high level of foreign currency reserves and a very low level of debt to start with.. The Thai economy is probably the best performing of all SE Asian countries.. but Vietnam isn't far behind..  Thailand (and Australia) have been preferred places to park cash because of positive interest rates and economic growth (although Australia's growth has been sluggish since the end of the mining boom) while European countries have had near zero interest rates and little economic growth.. (Germany has had growth.. but negative interest rates)..  This could well change in the near future though.. the American economy is picking up and I've seen talk of interest rates going up there in the not too distant future. Higher American interest rates would bring money back into the American economy that has been parked overseas.. weakening the Baht and the $Au..  (I hope..).. also.. Thailand has been bringing in large amounts of cash to fund large infrastructure projects.. this puts upward pressure on the Baht as well.. But.. who knows what will happen .. with Trump's trade war talk and now his war on Iran's recovering economy anything could happen.. 

[poanoi]

15 hours ago, FritsSikkink said:

It does make sense as the Thai economy is doing good which can't be said of the EU ones.

actually the northern countries of EU is doing well,

but the southern pigs are dragging it down

[ScammedInThailand]

15 hours ago, ELVIS123456 said:

In answer to a few questions - the 'normal' ranges of value of the Baht against other currencies is what I mean by 'reality.  Aside from the dip of all western economies in 2008-2009 due to the Global Financial Crisis, and other things on an individual currency (like the Greece/EU crisis), the Thai Baht has predominately over the long term moved within normal levels against each currency.  But something happenned in 2015 - ever since then, the Baht has grown in value significantly against all currencies for a long period of time.  In many cases for over 3 years. Even during the GFC the abnormal changes did not last that long.  Movement in one direction over the last 3 years aint normal. Something is going on. It doesnt make sense.

  

When I visited Thailand from my home in Hong Kong in 2005 - the exchange rate was HK$1 - 5.29 THB. Today, you will be lucky to get 4.15 THB for the HK$! 

 

HK has a very stable government, with excellent governance and fiscal management, very low levels of both crime and corruption, is largely populated by extremely well-educated, professional people working for the world's leading financial institutions and many MNC's Asian headquarter offices. 

 

Compare that to the toilet that is Thailand and its mickey-mouse government, that boasts the world's largest number of civil & military uprisings, Asia's most badly managed economy, total lack of investment and infrastructure [except that provided by the Chinese] over the same period of time. There is absolutely no logical explanation why the Baht has increased to such levels - except by manipulation. 

[simoh1490]

1 hour ago, sammieuk1 said:

Here's my theory and its not based on anything other than my thoughts.

 

Thai exports must be paid for in local currency's of the recipients or how could they possibly be competitive ?

Once said currency's are here its in everyone's interest to keep the TB as high as possible its just a local currency.

With tourism at record highs also bringing in massive FX this country must be awash with dosh for the few and powerful.

It appears to me that the Thai rich are right behind a cripplingly strong baht simply because they want more dollars the real world currency.         

Mostly nonsense but one part was correct, tourism does bring in a lot of foreign currency but nothing like the inflows exports creates:

 

Exports are typically paid for in USD , over 60% of Thailands are and therein lies a major part of the problem. As exporters are paid they exchange their newly earned dollars for THB and that increases the strength of the Baht. Meanwhile, BOT, who is the buyer of that USD grows their foreign currency reserves at an alarming rate. Add to that tourist who exchanges foreign currency for THB and again, THB strengthens.....buy THB against USD and THB gets stronger, sell THB against USD and THB wakens.

 

 

 

I

 

 

[Ks45672]

13 minutes ago, nickmondo said:

Ks45672, I think you have perfected the art form of making stupid comments.  :-)

I dont think the ruling Junta would be too impressed if the walking ATM's all decided to leave!  :-)

 

Broke ass pensioners who can't afford it anyway wouldn't be a big loss imo?.... 

 

I doubt the few Leo's they can afford to buy are propping up the Thai economy but you're entitled to your opinion

[Cranky]

First reality is even a 30-50% swing in currency value doesn't bother anyone with enough cash to already have a diversified cash holding/hedge in Baht and home currency, maybe even an additional one - USD for example for a Brit.  Prudent cash management dictates you should buy a couple of years or more cash requirements on the dips in value.

 

Second reality is nobody gives a flying one if poorer people leave Thailand - they are actually encouraged to fly off.  Tourists will always turn up regardless.

 

[Franko666]

On 29/03/2018 at 12:32 PM, DonnyT said:

They are dangerous places.

Surprised Australia is so high.

 

3 hours ago, thailand49 said:

Just a personal opinion it is because he isn't really running the country he was put in place before the HM pass to keep the country in tack and they seem to have done that but he is nothing more than a puppet who is starting to love the job for all the benefits it provides.  It is no surprise to me at least he wants to have the job for good.

 

16 hours ago, Lamkyong said:

i would be highly surprised if anyone here can come up with an acurate answer  in LAY MENS terms you will be inundated with lots of  theories    and charts similar to your post   sorry i can not offer any help  back to the fifty mark eould be nice (G.D.P.)

It depends which way you are going, its a 2 way st. Taking money out of Thailand is a great deal atm. Thats the thing with exchange rates, there are winners and losers and ex pats losing atm. Time to move on?

[moe666]

Then write your complaining story to the western investors who bring their money here to invest in bonds and the Thai stock market. A couple of years ago my thai stocks doubled in a 6 months period because of investment by the US and Japan needless to say I sold when the money started to be pulled out. A very nice profit. If you wait for the bhat to fall you will do nothing, if you wait for it to rise you will do nothing just live your life in a normal manner and it all evens out

[Shiver]

Similar things have occurred in other Asian currencies compared to Western.  It doesn't appear clean cut just by looking at charts, but it's hard to say there is no correlation.  As to the cause I don't know.  Maybe looking into relative QE could be a starting point?

 

Each country/zone will be choosing its weapon (commodities, manufacture, tourism, service industry etc) which will likely distort what a 2D fiat chart can show.

Gov't money is never a good store of value though.