Thai Baht Hits New Nine-year High

[Jai Dee]

Bank of Ayudhya lowers loan interest rates / Baht hit highest point of appreciation in 9 years

The Bank of Ayudhya deputy managing director, Mr. Tak Bunnak, says the Bank of Ayudhya has lowered all loan interest rates by 0.25 percent, starting today (Mar 16).

Government Housing Bank (GSB) managing director Khan Prachuapmor, says the GSB has decreased the loan interest rates by 0.25 percent to 0.50 percent to the clients who ask for loans at the Housing Fair 2007. Mr. Khan says the reduction will relieve the clients’ financial burdens. The scheme will also allow people to have more opportunities to own a house.

Commercial banks report that the appreciation of Thai baht has hit the highest point in the last nine years. The appreciation of Thai Baht against US dollar is at around 35.01 baht to 35.03 baht per 1 US dollar.

Source: Thai National News Bureau Public Relations Department - 16 March 2007

[Ricardo]

Baht breaks 35 level to hit new nine-year high

"The baht broke the 35 level to the dollar this morning after exporters sold dollars heavily on worries that the Thai currency would get stronger after the central bank further eases capital controls," said a Bangkok Bank dealer.

Source: The Nation - 15 March 2007

If true then the capital controls, although heavily-criticised and derided, have actually had the desired-effect of weakening the baht, no ? Good for the government !

I must admit that cutting the interest-rates in a serious way, by 1%-2%, would seem to me to be a more-obvious way to achieve this.

Although it is a long while since I studied economics.

Edited March 16, 2007 by Ricardo

[marquess]

Bank of Ayudhya lowers loan interest rates / Baht hit highest point of appreciation in 9 years

The Bank of Ayudhya deputy managing director, Mr. Tak Bunnak, says the Bank of Ayudhya has lowered all loan interest rates by 0.25 percent, starting today (Mar 16).

Government Housing Bank (GSB) managing director Khan Prachuapmor, says the GSB has decreased the loan interest rates by 0.25 percent to 0.50 percent to the clients who ask for loans at the Housing Fair 2007. Mr. Khan says the reduction will relieve the clients’ financial burdens. The scheme will also allow people to have more opportunities to own a house.

Commercial banks report that the appreciation of Thai baht has hit the highest point in the last nine years. The appreciation of Thai Baht against US dollar is at around 35.01 baht to 35.03 baht per 1 US dollar.

Source: Thai National News Bureau Public Relations Department - 16 March 2007

$1 buys

change

%

52 wk-h

52 wk-l

Japanese Yen 116.61500

0.96000

0.82

122.19000 108.93000

Australian Dollar 1.25650

0.00990

0.78

1.42470 1.24130

New Zealand Dollar 1.43250

0.00350

0.24

1.68580 1.40350

Hong Kong Dollar 7.81145

0.00020

0.00

7.81940 7.75050

Singapore Dollar 1.52715

0.00640

0.42

1.62380 1.52390

Taiwanese Dollar 33.20000

0.17300

0.52

33.46300 31.25000

Thai Baht 32.83000

0.27000

0.82

39.18000 32.00000

Malaysian Ringgit 3.51100

0.00250

0.07

3.75250 3.48500

Indonesian Rupiah 9227.00000

6.00000

0.07

9635.00000 8690.00000

[bingobongo]

Thailand Scraps Capital Controls; Investors Skeptical

``The mirror's cracked,'' Vickers said. ``People are always going to be skeptical of the military government. It's safe to do business in Thailand but our advice is to wait and watch.''

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

[laidback]

I think the Thai Baht, as well as the free floating currencies of Asian Countries like Vietnam, is the gambling zone for chinese speculants. As long as the Thai Baht is moving up against the USD, they stay in the game.

The old saying...what goes up must come down. Watch out Thailand, your in for a rude awaking..soon

The foreigner will prosper once more on your baht..

[dingue2rep]

Thai baht hits new nine-year high

BANGKOK: -- The Thai baht hit a new nine-year high against the dollar on Wednesday amid growing speculation that the army-backed government will soon lift controversial currency controls, dealers said.

The Thai currency reached 35.07 to the dollar in early morning trade, up from Tuesday's finish at 35.14-15.

The baht has risen nearly 12 percent over the past year, prompting the government to impose the capital rules in December in a bid to halt the currency's rise which has been dampening exports.

--AFP 2007-03-14

Does anyone else feel this is giving things a false sense of security? How can this currency hold against

the world's other currencies when there is nothing to promote such activity? A unstable government,

a South in turmoil and discord and a nation under threat of insurgency. What is propping this over-

value up?

Well the other key currencies also don't look that bright. USD: the disaster in Iraq, danger of attacking Iran, rumours that some countries change from USD-Euro.

While Euro: the countries have all different opinions, some even tell they want to switch back (thats of course only propaganda for the most stupid voter, but not increase confident).

So in that compare the Thai baht does not look that bad.....

Bad news

Nothing can justify that the monkey money is so high, Euro is going down too with USD (43.6B)

Thai economy is not stable at moment, everyone have to be careful about investing in Thailand now

One should be very careful how one refers to another country's currency... a little more respect should be due. Since the image of Thailand's king appears on the banknotes, one should think twice about about calling it monkey money. IMHO!!! Think about it next time you apply for a VISA...

...And I if you want to live somewhere where the country's currency drops to the depreciated US dollar, try South Africa. ZAR (Rand) Check out its dismal preformance and their immigration laws. Broaden your horizons, change your point of view and next time a little more respect!

[brahmburgers]

The baht is waaayyyy overvalued. It's a reflection of the casino mentality of speculators and has nothing to do with reality on the ground. All realistic indicators indicate the the baht should be heading south;

Junta ///

leaders not leading /// trouble in the south ///

airport on its knees /// unfriendly investment policies ///

and.... (fill in the blanks) __________ ____________

the bubble will burst, ......but how soon?

[Flysiam]

One should be very careful how one refers to another country's currency... a little more respect should be due. Since the image of Thailand's king appears on the banknotes, one should think twice about about calling it monkey money. IMHO!!! Think about it next time you apply for a VISA...

...And I if you want to live somewhere where the country's currency drops to the depreciated US dollar, try South Africa. ZAR (Rand) Check out its dismal preformance and their immigration laws. Broaden your horizons, change your point of view and next time a little more respect!

Someone have a stick stuck somewhere??????

Reference to a currency has NOTHING to do with disrespect to a King or the country....

[solo siam]

The baht is waaayyyy overvalued. It's a reflection of the casino mentality of speculators and has nothing to do with reality on the ground. All realistic indicators indicate the the baht should be heading south;

Junta ///

leaders not leading /// trouble in the south ///

airport on its knees /// unfriendly investment policies ///

and.... (fill in the blanks) __________ ____________

the bubble will burst, ......but how soon?

If the Baht was so powerfully overvalued, then wouldn't everyone be selling?

Back in the UK five years ago it was $1.25 to the pound, now its just about $2, most international currencies have performed similarly against the dollar. Who's to say the bubble wasn't in the USA, and that these corrections are that bursting.

[kdvsn]

Back in the UK five years ago it was $1.25 to the pound, now its just about $2, most international currencies have performed similarly against the dollar. Who's to say the bubble wasn't in the USA, and that these corrections are that bursting.

That's true, but over the past year the Baht has gone up more than the dollar index has gone down.

Edited March 17, 2007 by kdvsn

[sendbaht]

Every thing well be fine.

[Naam]

"..And I if you want to live somewhere where the country's currency drops to the depreciated US dollar, try South Africa. ZAR (Rand) Check out its dismal preformance"

-----

for the record: ZAR (South African Rand) has during the last five years GAINED a BIG bundle vs. US-Dollar. is that a "dismal performance"?

[Naam]

Back in the UK five years ago it was $1.25 to the pound, now its just about $2, most international currencies have performed similarly against the dollar. Who's to say the bubble wasn't in the USA, and that these corrections are that bursting.

back in the UK thirty years ago you had to shell out $2.45 to buy one Pound, today only $1.95

[dingue2rep]

"..And I if you want to live somewhere where the country's currency drops to the depreciated US dollar, try South Africa. ZAR (Rand) Check out its dismal preformance"

-----

for the record: ZAR (South African Rand) has during the last five years GAINED a BIG bundle vs. US-Dollar. is that a "dismal performance"?

Show me the BIG bundle, I must have missed something the last seven years.

[dingue2rep]

One should be very careful how one refers to another country's currency... a little more respect should be due. Since the image of Thailand's king appears on the banknotes, one should think twice about about calling it monkey money. IMHO!!! Think about it next time you apply for a VISA...

...And I if you want to live somewhere where the country's currency drops to the depreciated US dollar, try South Africa. ZAR (Rand) Check out its dismal preformance and their immigration laws. Broaden your horizons, change your point of view and next time a little more respect!

Someone have a stick stuck somewhere??????

Reference to a currency has NOTHING to do with disrespect to a King or the country....

I agree, until one starts using terms like monkey money etc.

Some Thai people even take offense if one folds the notes over the king's head! I think they teach that it is incorrect to do so in Thai schools. Of course I am open to correction on that.

I wonder what Thais think of their money.

Are they monkeys if they use monkey money? Let's not get lost in the translation thing now. If you couldn't get the message in English, don't expect a self respecting average Thai to understand either.

As for the stick...

[Naam]

"..And I if you want to live somewhere where the country's currency drops to the depreciated US dollar, try South Africa. ZAR (Rand) Check out its dismal preformance"

-----

for the record: ZAR (South African Rand) has during the last five years GAINED a BIG bundle vs. US-Dollar. is that a "dismal performance"?

Show me the BIG bundle, I must have missed something the last seven years.

here we go ZAR/USD 5year graph:

[lannarebirth]

Back in the UK five years ago it was $1.25 to the pound, now its just about $2, most international currencies have performed similarly against the dollar. Who's to say the bubble wasn't in the USA, and that these corrections are that bursting.

back in the UK thirty years ago you had to shell out $2.45 to buy one Pound, today only $1.95

It's true Dr. . All major currencies, the Euro, $USD and GBP are in VLT downtrends.

[Brutiniero]

Only if the most people believe the baht will get much more stronger - thats the sign for the turnaround.

So until you don't cry and bite yourself because it drives you crazy - "why up whyyy ???" - and you start to get the opinion that it makes sense somehow ..... well, then the opposite might happen.

I know that's not logic and doesn't base on fundamentals, but mostly the market isn't logic in the short and middle term and somehow I don't trust in the market mechanism here anyway.

My 2 cents.

[crocodilexp]

My 2 cents:

- Baht has grown against all major currencies in the last year. This has very little to do with fall of the USD. Looking since May 2006, USD hasn't fallen all that much compared to other currencies (EUR/JPY). People posted graphs earlier that make this *very* obvious, but some ignorant people still keep parroting the "USD is falling line".

- In the very long term (say 10 years), I think baht is bound to rise, not fall. Just look at the prices of equivalent goods and services in Bangkok vs. in the west -- this gap is bound to narrow eventually. Either this, or inflation will be very high in Thailand (which historically, it was not), achieving the same effect.

Of course, I am no authority on the matter, but do have some very basic macroeconomic knowledge.

[Carmine6]

My 2 cents.

A couple years ago in the US it was rare to see "Made in Thailand" on anything other than crafts type products. Then it started showing up on things like dishes I bought at Target (huge US retailer) and then lesser known brand clothes like an athletic shirt I bought 2 years ago.

Last December while shopping I noticed many designer and private label apparel goods made in Thailand. After I noticed that at Macy's it was harder to find a "Made in China" label than I expected. I've heard that one manufacturer is adding another facotry in Thailand and (another in Vietnam).

Even in the couple years I was dating my ex, a factory near her town in Isaan went from a small building to adding on a huge addition. They made clothing of some sort and even exported to China. I expect there are lots of attractions for manufacturers particularly among brand label contract manufacturers who are disillusioned by the counterfeiting that China ignores.

Plus go look at the higher end malls in Thailand and count the tourists who actually have bags in hand.

I wouldn't count on the strength of the Baht being smoke and mirrors at all.

[Hurricane51]

My 2 cents.

A couple years ago in the US it was rare to see "Made in Thailand" on anything other than crafts type products. Then it started showing up on things like dishes I bought at Target (huge US retailer) and then lesser known brand clothes like an athletic shirt I bought 2 years ago.

Last December while shopping I noticed many designer and private label apparel goods made in Thailand. After I noticed that at Macy's it was harder to find a "Made in China" label than I expected. I've heard that one manufacturer is adding another facotry in Thailand and (another in Vietnam).

Even in the couple years I was dating my ex, a factory near her town in Isaan went from a small building to adding on a huge addition. They made clothing of some sort and even exported to China. I expect there are lots of attractions for manufacturers particularly among brand label contract manufacturers who are disillusioned by the counterfeiting that China ignores.

Plus go look at the higher end malls in Thailand and count the tourists who actually have bags in hand.

I wouldn't count on the strength of the Baht being smoke and mirrors at all.

In the past few years, I have noticed that computer monitors in the US have increasingly carried the "Made in Thailand" tag. This was from some major vendors such as Dell.

[MrSnrang]

The baht might be getting stronger, but the average businessman here will tell you that their business is ######ed this year.

People are spending less and less. Plenty are ditching their BMWs for a Honda. They've stopped those expensive heroi- golf habits.

[madi]

The Thai baht is likely to continue the trend stronger.

Momentum is there and people with money are riding it.

Like all bubbles, it too will burst so be careful all.

I am happy for all who have gained upon the stronger baht. But please remember to lock in most of your gains now because when the baht does re-adjust, it will be a sudden and shocking move and there will be no time to get your gains at that point.

The baht getting so strong is very very bad for Thai exports and the severe hit will come sooner or later. Thailand is still a developing economy and is thus very apt to suffer from extreme moves both up and down.

Just think what the stronger baht means to Thailand jobs.

Unemplyment is for sure going to increase.

Manufacturing will be hurt and of course tourism will suffer here as well.

Politicly the stronger baht is great news now for the government because Thai people are buying foreign made goods for a cheaper price. Thai people are like most people in the world. They love their nation and they see the stronger Baht as proof they are strong as a people.

The collapse of the baht might come and when it does, the hit here to Thailand will be just as devastating as the last time. Maybe it might even be worse this time given the already instability in the South along with the diaster in the air in the north.

Life will go on and Thailand will get by but I for sure would not be stepping into the baht now thinking it will be stronger a year fron now. Likely it will be closer to 40 a year from now than to 35. A complete wreck here would see the baht at 45 or 50 to the dollar.

Make your money here and spend it here and then you will not care so much.

Keep all your savings off shore in Dollars and Euros or the Pound.

Rent here and do not buy. If things do collapse a renter will get very very cheap rents again where is a owner will lose his shirt.

Remember we are all--visitors here so behave that way and keep your money at your home nation.

You will sleep better.

My 2 cents

[aussiestyle1983]

The Thai baht is likely to continue the trend stronger.

Momentum is there and people with money are riding it.

Like all bubbles, it too will burst so be careful all.

I am happy for all who have gained upon the stronger baht. But please remember to lock in most of your gains now because when the baht does re-adjust, it will be a sudden and shocking move and there will be no time to get your gains at that point.

The baht getting so strong is very very bad for Thai exports and the severe hit will come sooner or later. Thailand is still a developing economy and is thus very apt to suffer from extreme moves both up and down.

Just think what the stronger baht means to Thailand jobs.

Unemplyment is for sure going to increase.

Manufacturing will be hurt and of course tourism will suffer here as well.

Politicly the stronger baht is great news now for the government because Thai people are buying foreign made goods for a cheaper price. Thai people are like most people in the world. They love their nation and they see the stronger Baht as proof they are strong as a people.

The collapse of the baht might come and when it does, the hit here to Thailand will be just as devastating as the last time. Maybe it might even be worse this time given the already instability in the South along with the diaster in the air in the north.

Life will go on and Thailand will get by but I for sure would not be stepping into the baht now thinking it will be stronger a year fron now. Likely it will be closer to 40 a year from now than to 35. A complete wreck here would see the baht at 45 or 50 to the dollar.

Make your money here and spend it here and then you will not care so much.

Keep all your savings off shore in Dollars and Euros or the Pound.

Rent here and do not buy. If things do collapse a renter will get very very cheap rents again where is a owner will lose his shirt.

Remember we are all--visitors here so behave that way and keep your money at your home nation.

You will sleep better.

My 2 cents

I don't have a clue whats the Baht will do, I didn't mind it when I got 30 Baht per AUD, but now working here and getting ready to go back to Oz, I will be happy if the Baht continues to rise.

I agree with most of what you said, keep your foriegn money at home, and use your Thai money here, that way you most deffinently will sleep better.

And, if you happen to exchange money at a good time and get a rate your happy with, you will sleep even better

[robkooy]

Thai baht hits new nine-year high

BANGKOK: -- The Thai baht hit a new nine-year high against the dollar on Wednesday amid growing speculation that the army-backed government will soon lift controversial currency controls, dealers said.

The Thai currency reached 35.07 to the dollar in early morning trade, up from Tuesday's finish at 35.14-15.

The baht has risen nearly 12 percent over the past year, prompting the government to impose the capital rules in December in a bid to halt the currency's rise which has been dampening exports.

--AFP 2007-03-14

Come on Topfield where are you when we need you????

Maybe the real value of the baht is still higher as the today exchangerate.

Greetings Rob Kooy ( gay from holland )

[Naam]

"I don't have a clue whats the Baht will do"

-----

neither have i. but it's good to have a bunch of prophets here on board who are telling us what exactly the Baht will do. problem is... WHOM should we believe?

edited for typo

Edited March 18, 2007 by Dr. Naam

[Heng]

People were complaining when the Baht moved away from 25.

People were (and still are) complaining when the Baht moved away from 40 in the opposite direction.

The products mentioned above with the "made in Thailand" label have been exported long before you happened to notice them at your local department store stateside. Exporters didn't suddenly come into existance because of the inflated 'over' 25-era Baht icing/ export profits. They were exporting the same goods when it was 25 to the US$. So we'll see some shakeout... IMO that's natural (no matter what the 'negative' market condition or threat is that causes it) and somewhat healthy.

Edited March 18, 2007 by Heng

[mike_rad]

There's one easy way to stop the trend: devalue the currency.

OK, what am I missing?

[VegasVic]

There's one easy way to stop the trend: devalue the currency.

OK, what am I missing?

A devaluation of the Thai Baht is certainly a possibility, however I would imagine that before drastic action needs to be taken by the government, the entities (stock market speculators, real estate speculators and currency traders) that caused the rapid rise in the currency will also lead to its rapid downfall sometime later this year. Anyone who has traveled throughout the kingdom in the last 6 months can tell you that the Thai economy is not in a boom, but rather in a decline and the rise in the Thai baht has been an artificial one that is controlled by overseas investments. The money has been pouring into Thai investment vehicles and not into building more factories and creating more jobs for the Thai people. The inflow of outside curency that has to be converted into thai baht has caused the imbalance and thus the rise in the baht. The loss of jobs in the Thai export sector will likely continue as the US and to a lesser degree the European economies continue to slow. At some point the demand for the TB will lessen and then the speculators will take this as their sign to make a hasty exit. If that exit is an orderly (not very likely) one then the TB will float back to a more liveable valuation for the Thai government some where in the 39-42 range(vs. the US dollar) , more than likely the outflow will not be orderly and the TB will have a mini colapse(45+) as the hedge funds and the big currency traders get out and the others who followed thinking that this was a long term trend are left holding the bag. Markets move in cycles and this one is about topped out, for those on this board who think that the TB is here to stay at these levels then obviously you must have a vested interest either in real estate or equities in the Thai market(in some of the posts this is very transparent). For the sake of the Thai people I hope this ridiculous speculation in their currency ends sooner rather than later and this coupled with a newly elected government later this year can lead the way to some real economic prosperity and job growth in Thailand.

[backflip]

"There's one easy way to stop the trend: devalue the currency. OK, what am I missing? "

Currency is devalued when it is weak, not when it is strong.