World-beating currency gives Thailand major economic headache

[webfact]

World-Beating Currency Gives Thailand Major Economic Headache

By Anuchit Nguyen

 

-- Baht is best performer globally against dollar over five years

-- Growth estimates cut for economy relying on trade and tourism

 

File photo

 

Thailand’s effort to revive economic growth with more than $10 billion of stimulus faces an obstacle from its surging currency.

 

The baht has strengthened more than 6% against the dollar in 2019, the most among major Asian currencies, and its appreciation leads the world over the past five years, according to data compiled by Bloomberg.

 

The climb has hurt tourism and exports, contributing to the weakest economic expansion since 2014 as the U.S.-China trade spat also hits home. The baht is seen as a safe haven and officials will be wary of intervening too much in foreign-exchange markets as the U.S. closely monitors countries’ currency policies, according to Australia & New Zealand Banking Group Ltd.

 

Full story: https://www.bloomberg.com/news/articles/2019-09-11/world-beating-currency-a-major-challenge-for-thailand-s-economy

 

-- Bloomberg 2019-09-12

[Cadbury]

10 minutes ago, webfact said:

The climb has hurt tourism and exports, contributing to the weakest economic expansion since 2014

Weakest economic expansion since 2014 eh!

Which just happens to be the year of the Prayut Chan-o-cha coup. That tells the story in itself.

 

[jabis]

1 minute ago, Cadbury said:

Weakest economic expansion since 2014 eh!

Which just happens to be the year of the Prayut Chan-o-cha coup. That tells the story in itself.

 

Weakest economy - strongest performing currency  Not like there could be causation between the two surely - that would be the -minister talking ????

[ChrisY1]

Sphincters must be twitching in the finance department....devalue it and risk a crash....keep it high and risk falling business.

But never fear, Thailand has the Prayuth the Great to solve all such simple economic woes with a wave of the hand...!

[Fex Bluse]

The Thai elites are 

 

1. allowing hot Chinese illicit capital outflows into the Thai economy and

2. probably forcing the Thai central bank to hold a peg until their money is out -- just like they did in 1997/98

 

See below at 14:45

 

 

Edited September 12, 2019 by Fex Bluse

[George Bowman]

41 minutes ago, webfact said:

Thailand’s effort to revive economic growth with more than $10 billion of stimulus faces an obstacle from its surging currency.

I only know two aspects about Thai money. One, I never seem to have enough and secondly don't step on a coin. Hopefully, there is someone in Thaivisa land that can explain this economic problem in simple terms? 

[RichardColeman]

Problem is that the farang word 'stimulus' translates into Thai as 'buy more tanks'

[Cadbury]

For expats and exporters who were hoping it might fall sometime soon. From Bloomberg. 

"......strategists say the currency isn’t likely to lose its newfound status as a haven anytime soon, thanks to Thailand’s rising current-account surplus and record foreign reserves".

“’Thai baht remains a safe haven as we haven’t had significant impact from the worsening trade war like other emerging markets,” said Jitipol Bangkok-based chief strategist at Krung Thai Bank Pcl. The third most-accurate forecaster for the currency last quarter predicts the baht will rise to 30.25 per dollar by the end of the year",

The baht is a double edged sword. Great for the military and the rich elite who get their money out and store it offshore and watch it grow but a disaster for exports and the economy. 

 

https://www.bloomberg.com/news/articles/2019-08-06/thai-baht-s-haven-status-in-full-view-as-turmoil-rocks-markets

 

[trainman34014]

2 minutes ago, RichardColeman said:

Problem is that the farang word 'stimulus' translates into Thai as 'buy more tanks'

Don't forget the Submarines !

[JAG]

5 minutes ago, Cadbury said:

The baht is a double edged sword. Great for the military and the rich elite who get their money out and store it offshore and watch it grow but a disaster for exports and the economy. 

I really don;t see the problem. The military and the elites are the ones that matter. 

[wendyfromoz]

6 minutes ago, trainman34014 said:

Don't forget the Submarines !

and the aircraft carrier they really needed and had to have.

[Teee]

I gave up on Thailand last year after 2 years.

Bangkok so expensive...and when i came back end of the year for 2 weeks then a month in April...WOW!!! cheaper to live at home in the UK. Well not unless you eat filthy polluted food of the street.

Even condos are getting expensive to rent...to live in comparison as home min 35000bht...hey same rental as UK.

My ex gf who i lived with paid 10000bht a month for a small 35sq foot.

Toooo small. Cheap...but not what i moved to Thailand for to lower my living standards

No disrespect to all you old expats...why would you want to live Bkk?

Maybe easier to pick up a young asian buy her meal drinks and get your leg over?

For you over 65s thats cool for you...till your money runs out which the way the currency is now will get worse before in a couple of years maybe recovers.

My ex (fillapino) kept having a go at me saying i was counting (watching) my money too much. Considering we used to go beach every 3rd weekend if she was not working and trips to Cambodia (great place and cheap) Vietnam Malaysia and brought her to the UK to meet my family and see her family...i would tell her....if you dont count your money then eventually you run out.

She does not understand that money dont grow on trees ha ha

 

 

 

[quadperfect]

Ok so thailand has the best performing currency against usd. But i see lots of news about this next recession. Everyone will be draged into it supposedly. But asian markets will recover first as there not in deep like the euros and americans.

So whats the best move? Put usd to equal 800k in a bank here for a visa? Or buy property in vietnam? I am on the fence so to speak. I have ties in vietnam but prefer thailand. I know investing in thailand is a bad investment with the government driving it into the ground.

[jabis]

7 minutes ago, quadperfect said:

Ok so thailand has the best performing currency against usd. But i see lots of news about this next recession. Everyone will be draged into it supposedly. But asian markets will recover first as there not in deep like the euros and americans.

So whats the best move? Put usd to equal 800k in a bank here for a visa? Or buy property in vietnam? I am on the fence so to speak. I have ties in vietnam but prefer thailand. I know investing in thailand is a bad investment with the government driving it into the ground.

"If I was a gambling man" like them industry-folks, I'd hedge my funds on Vietnam, 15Bn baht to 1Bn during 5 years in FDI (Foreign Direct Investment) should tell you that much ????‍☠️

Edited September 12, 2019 by jabis

[ThaiBunny]

15 minutes ago, jabis said:

"If I was a gambling man" like them industry-folks, I'd hedge my funds on Vietnam, 15Bn baht to 1Bn during 5 years in FDI (Foreign Direct Investment) should tell you that much 

Yes I remember just a few short years ago being told by "knowledgeable" people to put my money into the Chinese currency - it was going to skyrocket

[soalbundy]

1 minute ago, ThaiBunny said:

Yes I remember just a few short years ago being told by "knowledgeable" people to put my money into the Chinese currency - it was going to skyrocket

Actually there are hedge funds who even now recommend dumping American stocks and buy Chinese stocks in a big way.

[ThaiBunny]

1 minute ago, soalbundy said:

Actually there are hedge funds who even now recommend dumping American stocks and buy Chinese stocks in a big way.

Are they the same ones who advised about buying tech stocks in 2000 or financial derivatives in 2006?

[Isaanbiker]

1 hour ago, Cadbury said:

Weakest economic expansion since 2014 eh!

Which just happens to be the year of the Prayut Chan-o-cha coup. That tells the story in itself.

 

Indeed, what a coincidence...........???!!!!!

[Tropicalevo]

58 minutes ago, wendyfromoz said:

and the aircraft carrier they really needed and had to have.

and now they have ordered a landing craft! I wonder who they are going to invade?

[Isaanbiker]

Just now, Tropicalevo said:

and now they have ordered a landing craft! I wonder who they are going to invade?

Did Pinocchio read "Mein Kampf?"

[smedly]

1 hour ago, webfact said:

Baht is best performer globally against dollar over five years

why do they keep saying this, it's like saying I outperformed everyone by jumping without a parachute - yes I will hit the ground first suckers

 

"best performing" is when the currency is supporting the economy, right now it is being heavily manipulated because Thailand is allowing that to happen, just wait until they have to do something drastic to stop it - mass exit

[BestB]

1 hour ago, Cadbury said:

Weakest economic expansion since 2014 eh!

Which just happens to be the year of the Prayut Chan-o-cha coup. That tells the story in itself.

 

Economy was ordered to standby while Big P deals with bigger and better issues.????

[Eric Loh]

1 hour ago, Cadbury said:

For expats and exporters who were hoping it might fall sometime soon. From Bloomberg. 

"......strategists say the currency isn’t likely to lose its newfound status as a haven anytime soon, thanks to Thailand’s rising current-account surplus and record foreign reserves".

“’Thai baht remains a safe haven as we haven’t had significant impact from the worsening trade war like other emerging markets,” said Jitipol Bangkok-based chief strategist at Krung Thai Bank Pcl. The third most-accurate forecaster for the currency last quarter predicts the baht will rise to 30.25 per dollar by the end of the year",

The baht is a double edged sword. Great for the military and the rich elite who get their money out and store it offshore and watch it grow but a disaster for exports and the economy. 

 

https://www.bloomberg.com/news/articles/2019-08-06/thai-baht-s-haven-status-in-full-view-as-turmoil-rocks-markets

 

A lot going for the Baht in a world where institutional investors are chasing for yields. Current current surplus, strong foreign reserves, low PE ratio stocks, good yield for bonds, debts at manageable level, debts mostly denominated in Baht and stimulus spending based on assets rather than printing money like the west. A opportune time for government to have policies to encourage import of technologies to improve productivity i.e. if they have the brain cells in the cabinet to seize the moment.  

[Cadbury]

2 minutes ago, Eric Loh said:

A lot going for the Baht in a world where institutional investors are chasing for yields. Current current surplus, strong foreign reserves, low PE ratio stocks, good yield for bonds, debts at manageable level, debts mostly denominated in Baht and stimulus spending based on assets rather than printing money like the west. A opportune time for government to have policies to encourage import of technologies to improve productivity i.e. if they have the brain cells in the cabinet to seize the moment.  

You make valid points. Unfortunately brain cells are seriously lacking in the cabinet due to PM Prayut appointing his ministers based on return favours instead of intelligence and job qualifications. The current tourism minister is a classic example.

Plus Somkid, who I would rate as one of the better ones, seems to to be in bad odour with the PM at present.

[Cadbury]

9 minutes ago, BestB said:

Economy was ordered to standby while Big P deals with bigger and better issues.????

Like twerking and lewd dancing and lotteries and footpaths.

[ThaiBunny]

3 minutes ago, Cadbury said:

due to PM Prayut appointing his ministers based on return favours instead of intelligence and job qualifications

Sounds like most government leaders around the world - it's all about doing factional deals, paybacks for past favours, buying support. You name it, politicians the world over do it. Watch the series Yes Prime Minister for a reality check

Edited September 12, 2019 by ThaiBunny

[Cadbury]

4 minutes ago, ThaiBunny said:

Sounds like most government leaders around the world - it's all about doing factional deals, paybacks for past favours, buying support. You name it, politicians the world over do it. Watch the series Yes Prime Minister for a reality check

You mean like when PM Hacker appointed Sir Desmond Glazebrook as the Governor of the Bank of England.

[ThaiBunny]

Just now, Cadbury said:

You mean like when PM Hacker appointed Sir Desmond Glazebrook as the Governor of the Bank of England.

Absolutely - "an own-goal in fact"

[onera1961]

1 hour ago, RichardColeman said:

Problem is that the farang word 'stimulus' translates into Thai as 'buy more tanks'

Buy more tanks is good because that will spend foreign currency and weaken baht.

[sammieuk1]

Its not giving me a headache after seeing the same bottle of Australian wine on sale for £5.99 in the UK and £18.78 here just a smile now and so will the inevitable crash. when I told my Mrs this example she said its because its come a long way Thai logic at it finest ????