When will Thai Baht get back to reality

[Brunolem]

18 hours ago, Henryford said:

That is why the Baht is still strong compared to our Mickey Mouse currencies.

And remember that the baht remains strong even though the dollar is trending higher...what would it be if the dollar was weakening...

[jerry921]

Some may find this chart interesting. It's intended to show the depreciation of various currencies vs the dollar both now (feb-may this year) and back during the "taper tantrum" in 2013. One aspect of interest is simply which currencies are included. - those are the ones that are getting hit. The THB is in there, above the red line. If I'm right about which triangle matches which label, the triangle for THB is just above the B in THB and below the R in MYR. That shows about -2.5% this time vs about -8% in the taper tantrum. So it's not as bad for the Baht this time around. By way of comparison, does anyone know what the depreciation for the Baht was in the 1997 currency crisis?

 

 

In case it's necessary for copyright or ownership credit, here's a link to the article that this chart came from (not really on topic for this thread). I don't see any copyright on the chart itself.

 

https://www.zerohedge.com/news/2018-05-18/em-rout-worse-taper-tantrum-answer-one-chart

 

Edited May 19, 2018 by jerry921
add copyright info

[simoh1490]

30 minutes ago, jerry921 said:

Some may find this chart interesting. It's intended to show the depreciation of various currencies vs the dollar both now (feb-may this year) and back during the "taper tantrum" in 2013. One aspect of interest is simply which currencies are included. - those are the ones that are getting hit. The THB is in there, above the red line. If I'm right about which triangle matches which label, the triangle for THB is just above the B in THB and below the R in MYR. That shows about -2.5% this time vs about -8% in the taper tantrum. So it's not as bad for the Baht this time around. By way of comparison, does anyone know what the depreciation for the Baht was in the 1997 currency crisis?

 

 

In case it's necessary for copyright or ownership credit, here's a link to the article that this chart came from (not really on topic for this thread). I don't see any copyright on the chart itself.

 

https://www.zerohedge.com/news/2018-05-18/em-rout-worse-taper-tantrum-answer-one-chart

 

The 1997 crash saw THB go from circa GBP 38 to just over 90, against USD it went from a hard pegged 25 to 45 (spikes notwithstanding) https://tradingeconomics.com/thailand/currency

[Franko666]

On 13/05/2018 at 3:58 PM, theguyfromanotherforum said:

 

This. I bash bitcoin a lot, but the fact is it trades at $8000++ today. What I think it should trade at is completely irrelevant. 30 baht for 1 Australian dollar? For what? How does Australia compete with Thailand these days? What does it export? What does it produce? How many Australian prostitutes comparing to Thailand and at what price? Everything matters. You're lucky it's over 20 baht.

 

On 18/05/2018 at 8:15 PM, Henryford said:

That is why the Baht is still strong compared to our Mickey Mouse currencies.

Govt debt in Thailand and Australia is similar at 40+%, however Aussie household debt is 3 times that of the Thai  household debt. But the AUD is traded and is self levelling, the THB is manipulated hense the relative values of today.

[simoh1490]

44 minutes ago, Franko666 said:

 

Govt debt in Thailand and Australia is similar at 40+%, however Aussie household debt is 3 times that of the Thai  household debt. But the AUD is traded and is self levelling, the THB is manipulated hense the relative values of today.

An interesting comparison but I don't agree it's 100% correct. 

 

Government debt is similar between the two countries, around 42%, both countries also have a trade surplus although Australia's is much lower than Thailand. And as you correctly say, consumer debt in Australia is far higher than Thailand's, around 130% of nominal GDP versus 65% in Thailand. But the fact that the Australian Dollar is fully convertible and THB is not, doesn't impact on the value of AUD, it is not the availability of supply factor alone that make AUD weaker than the Baht it is the demand for it which does so. For example, tourist arrivals in Australia are around 1 million per year (and falling), in Thailand, they are circa 35 million (and climbing), that means the demand for THB is far far higher than the demand is for AUD through tourism alone. 

 

Another factor to add when looking at that comparison is the extent to which social security obligations impact on government budgets and the attractiveness of a currency, in Australia those obligations are quite high, in Thailand they are very low.

 

 

Edited May 20, 2018 by simoh1490

[ExpatOilWorker]

On 5/18/2018 at 4:57 PM, simoh1490 said:

http://www.pdmo.go.th/en/popup_money_data.php?m=money&ts2_id=1

 

About 4% is non-THB:

 

http://www.pdmo.go.th/en/

The 4% of non-THB debt is only for public debt, right?

 

If corporate and private debt is included is is a bit higher, although still relative low compared to other EM.

 

And although many emerging markets have heavy debts, they do not share Argentina’s old-fashioned need to borrow in other countries’ currencies. Almost 64% of Argentina’s combined government and corporate debt is denominated in dollars and other foreign monies, according to the Institute of International Finance. Among the big emerging markets, only Turkey compares, with 56%. The equivalent figure for Thailand is 17%, for Brazil only 16%.

 

https://www.economist.com/leaders/2018/05/12/will-argentinas-woes-spread

[simoh1490]

1 minute ago, ExpatOilWorker said:

The 4% of non-THB debt is only for public debt, right?

 

If corporate and private debt is included is is a bit higher, although still relative low compared to other EM.

 

And although many emerging markets have heavy debts, they do not share Argentina’s old-fashioned need to borrow in other countries’ currencies. Almost 64% of Argentina’s combined government and corporate debt is denominated in dollars and other foreign monies, according to the Institute of International Finance. Among the big emerging markets, only Turkey compares, with 56%. The equivalent figure for Thailand is 17%, for Brazil only 16%.

 

https://www.economist.com/leaders/2018/05/12/will-argentinas-woes-spread

Yes, the 4% is public debt alone. And whilst private and corporate debt does exist I suspect it is not a factor that could impact the value of THB, even indirectly, since BOT manages such things quite closely. I suppose it would be possible for a Thai multinational to borrow overseas in a foreign currency and outside of their Thai balance sheet but such things cannot be made totally invisible. In a worst-case scenario that overseas entity could fail thus reducing profits of the parent company thus potentially lowering GDP ever so slightly but the scale would have to be huge in order to impact THB value.

[ExpatOilWorker]

On 5/12/2018 at 5:27 PM, manarak said:

Western countries desperately try to get inflation up, while in Thailand the government tries to keep prices down.

 

there are other factors, such as Thailand's economy getting better and exports picking up, the country's debt is under control.

 

you might want to have a look at these:

https://tradingeconomics.com/thailand/gdp-constant-prices

https://tradingeconomics.com/thailand/inflation-cpi

https://tradingeconomics.com/thailand/exports

https://tradingeconomics.com/thailand/current-account

 

the interest rate chart actually shows that Thailand has lowered its rate to try to keep its currency down, but it can't lower it further:

https://tradingeconomics.com/thailand/interest-rate

 

with the above indicators, it's no wonder that the Thai Baht is doing very well.

"the government tries to keep prices down", 

that was true of the past, but the future look very different for Thailand.

 

 But Thailand is not one of them. Private investment expanded by only 1.7% last year. Thailand’s sovereign bonds yield less than America’s. Inflation is once again a worry, not because it is too high, but because it is so stubbornly low. Consumer prices rose by only 0.8% in March, according to figures released this week. Inflation has remained below the BoT’s target range of 1-4% for 13 months in a row. Core inflation, excluding raw food and energy, has been below 1% for almost three years.

 

https://www.economist.com/finance-and-economics/2018/04/05/the-next-japan-is-not-china-but-thailand

[simoh1490]

The Economist article above is very good. What I think it says is that consumer spending and inflation are both low so government spending is going to (try and) fill the gap although it doesn't say why those things are low, apart from possibly an ageing population. From other things I have read I think there has been a shift of the workforce from manufacturing and agriculture into service related fields, most in support of tourism and that is somewhat risky since it means an increasing amount of income is derived from external overseas factors, many of which are outside the control of the government. Another factor in that shift is the increase in robotics in the manufacturing sector. All of that probably also helps explain the increasing focus to clean up the tourism act and reduce negative impacts on tourists, crime, scams etc., all of which are very welcome of course. 

[Rockjockey]

If you haven't tried Transferwize you might benefit from taking an in depth look at this service. I have been using them twice a month now since late 2017 because rhey use the mid market rate on fx exchange. Plus money sent from Aussie Account to Thai account less than 24 hours. I will never use bank for transfering my funds again. Because I transfer twice monthly it is similiar to Dollar Cost Averaging in that you don't try and guess where the market is heading.. and often get it wrong. Yes last few months have been on lower side for the Aussie but as I'm only transferring living expenses I don't fret about it. The fees are minimal with ZERO hidden costs. You know you front what they charge. Way cheaper than banks and others.
Take a look... u might be pleasantly surprised. You can download their app and see what a given amount will get you in Thai Baht. My 2 cents.

Sent from my SM-G935F using Thailand Forum - Thaivisa mobile app

[wolf81]

On 5/23/2018 at 8:10 AM, Rockjockey said:

If you haven't tried Transferwize you might benefit from taking an in depth look at this service. I have been using them twice a month now since late 2017 because rhey use the mid market rate on fx exchange. Plus money sent from Aussie Account to Thai account less than 24 hours. I will never use bank for transfering my funds again. Because I transfer twice monthly it is similiar to Dollar Cost Averaging in that you don't try and guess where the market is heading.. and often get it wrong. Yes last few months have been on lower side for the Aussie but as I'm only transferring living expenses I don't fret about it. The fees are minimal with ZERO hidden costs. You know you front what they charge. Way cheaper than banks and others.
Take a look... u might be pleasantly surprised. You can download their app and see what a given amount will get you in Thai Baht. My 2 cents.

Sent from my SM-G935F using Thailand Forum - Thaivisa mobile app
 

TransferWise has a neat little service that send you an email notice when the currency reaches it's highest point since the last 2 weeks. That might help a little bit to make most of your transfers. I use TransferWise as well, much cheaper than using banks. The interbank exchange rates that banks use are a total rip-off.

 

[Brunolem]

2 hours ago, wolf81 said:

TransferWise has a neat little service that send you an email notice when the currency reaches it's highest point since the last 2 weeks. That might help a little bit to make most of your transfers. I use TransferWise as well, much cheaper than using banks. The interbank exchange rates that banks use are a total rip-off.

 

If this Transferwise service bypasses the banks, I assume they must have a representative at each end of the transaction, as is the case with Western Union, for example.

Yet, using such a service means that someone has to show up with the cash to initiate the transfer, and someone has to go collect the money upon arrival.

 

Or does it work different!y, and how?

 

Also, how long does it take for the transfer to be completed?

[Shiver]

Most fiat will fail eventually.   When? no idea.  Who? not that much of an idea either.  Will THB survive?  I don't even know that, but... I think it's one of the least bad out there.  Clearly I'm talking as a fiat minimalist.

Edited May 24, 2018 by Shiver

[timkeen08]

5 hours ago, wolf81 said:

TransferWise has a neat little service that send you an email notice when the currency reaches it's highest point since the last 2 weeks. That might help a little bit to make most of your transfers. I use TransferWise as well, much cheaper than using banks. The interbank exchange rates that banks use are a total rip-off.

 

I just click on and then delete their daily currency update emails.  It seems to be going back to over 32 baht again this week.  It really doesn't matter what the rate is I make a transfer on the 3rd of each month anyway (or that Friday).  Great service and I hope they can stay in business for the next couple of decades.

[Rockjockey]

If this Transferwise service bypasses the banks, I assume they must have a representative at each end of the transaction, as is the case with Western Union, for example.
Yet, using such a service means that someone has to show up with the cash to initiate the transfer, and someone has to go collect the money upon arrival.
 
Or does it work different!y, and how?
 
Also, how long does it take for the transfer to be completed?

You need a bank account in your country of residence and a bank acvount in Thailand. Not all like Western Union... Google Transferwize for a heads up!
No middlemen.

Sent from my SM-G935F using Thailand Forum - Thaivisa mobile app

[Rockjockey]

Transfer usually less than 24 hours.

Sent from my SM-G935F using Thailand Forum - Thaivisa mobile app

[wolf81]

10 hours ago, Brunolem said:

If this Transferwise service bypasses the banks, I assume they must have a representative at each end of the transaction, as is the case with Western Union, for example.

Yet, using such a service means that someone has to show up with the cash to initiate the transfer, and someone has to go collect the money upon arrival.

 

Or does it work different!y, and how?

 

Also, how long does it take for the transfer to be completed?

Since TransferWise kinda originated the way Western Union works, I guess it's kind of the same system. 

 

For me transfers usually are completed within 1-2 working days. Nothing is happening in the weekend, but I think it's because European banks don't process transfers in the weekends. 

[Huayrat]

British pound the lowest ive ever seen it in my 9 years here.. Today its worth 42 baht madness..

[Huayrat]

On 5/8/2018 at 8:39 PM, 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.

Thai stock market has nothibg to do with the Thai Baht exchange rate.. normally a strong stocj market usually makes the currency weaker.. look at the British stock market for example

[poanoi]

3 hours ago, Huayrat said:

Thai stock market has nothibg to do with the Thai Baht exchange rate.. normally a strong stocj market usually makes the currency weaker.. look at the British stock market for example

no, its the other way around, a weak currency will push up stock on export companies

[ExpatOilWorker]

Thailand is down the list just above Nigeria, but that is a good thing.

 

Financially Thailand is actually doing very well for an EM.

 

https://www.bloomberg.com/news/articles/2018-05-23/emerging-market-stress-just-beginning-as-record-debt-wall-looms

[Henryford]

10 hours ago, Huayrat said:

Thai stock market has nothibg to do with the Thai Baht exchange rate.. normally a strong stocj market usually makes the currency weaker.. look at the British stock market for example

That is only because a lot of British firms have earnings from activities abroad so gain from a low currency. Probably not the case in Thailand.