The Thai Baht Reached a New 6-Year High. Here’s Why It’s Surging

[Farangwithaplan]

14 minutes ago, Why Me said:

The strength of the baht reflects that of the Thai economy. It's super solid now. No sign of a bubble or impending crash either.

You may well be right and I'm not au fait with this aspect of national economies so I can't comment directly. It has been interesting reading people's opinions on this though.

 

What I do see on the ground is that private developments have slowed and real estate is not breaking any records. Agent and developers I deal with are all treading water right now. I am also aware of plans for a shopping group to mothball projects. They are struggling to fill spaces in shopping malls due to the exit of some high end cornerstone businesses from their malls.

 

It seems the economy is two paced right now, based on personal and anecdotal evidence.

[AussieBob18]

1 minute ago, Chivas said:

Wishful thinking fella. Monies continue to pour into the Country purely because its seen as such a safe haven and will continue to do so.

Maybe.  But the Chinese money is slowing, and since they introduced regulatory changes in 2018 there has been a big slowdown in overseas investments by China - now mainly going to Hong Kong. Thailand exports twice as much to China (about $40B) than it does to the next country being USA ($20B).  'Machinery' makes up over 50% of Thai Exports and orders for those things are always done over several years. With the Baht so high those orders will drop - simple economics.  With the Baht so high - tourism will drop - simple economics.  With the Baht so high all exports will eventually start to decline.  And as China's economy declines, so eventually will Thailand's - simple economics.  Investments into Thailand are slowing and Exports are also slowing - the result is inevitable.  Just a matter of time. The longer they allow the Baht to stay too high (to make military Imports cheaper?) the harder and faster will be the decline when it occurs.  And it will occur - simple economics.  Thailand aint no 'new China' no matter what they may think.

 

[holy cow cm]

What it does mean is unless you work here we are all losing thousands to tens of thousands of baht in monthly foreign transfers due to this problem. Mine is up to the tens of thousands and that is a punch to the stomach. Now if they are wrong and it actually does breech the 30 mark to the dollar going to 29, then I hope to god we don't see the day again when it slid to 25 to a buck. This would be disastrous for too many expats as then it will not be to the stomach but a punch the head for all.

[smedly]

snapshot  of 1997

 

Thailand's economy developed into an economic bubble fueled by hot money. More and more was required as the size of the bubble grew. The same type of situation happened in Malaysia and Indonesia, which had the added complication of what was called "crony capitalism".^[7] The short-term capital flow was expensive and often highly conditioned for quick profit. Development money went in a largely uncontrolled manner to certain people only - not necessarily the best suited or most efficient, but those closest to the centers of power

[Yinn]

The negative about everything thailand member will ignore this information.

In this people eye, the tourist has all gone home, airport empty, the factory closed. And the baht is so strong because “Thailand” hate the expat. TAT lie about, the thai bank lie everything. AND THE “Chinese” take over Thai people.

 

There imagination. The say to each other everyday. They really believe it.

 

BUT IN THE REAL WORLD.

 

Several factors are attracting investors to Thailand, making it a haven for foreign money. But its healthy current account tops them all, according to analysts at Goldman Sachs Group Inc. The International Monetary Fund forecasts the country will post a surplus of 6% of gross domestic product this year, almost double that of Japan.

 

Thailand’s reserves and negligible inflation also provide investors comfort. The central bank’s foreign-cash pile stands at $220 billion, the equivalent of more than 12 months of imports. And inflation, currently 0.3%, has been running below the central bank’s target of 1% to 4% since June.

 

As if these weren’t enough, Thailand is getting a boost from gold. A hub for bullion trading, Thailand has benefited as jitters about the U.S.-China trade war and global economic slowdown have driven a 17% gain in the price of the metal this year.

 

 

So our “problem” is economy to strong, to big surplus, to much money and to much gold. Terrible problem 5555555

The cheese and wine so expensive for the foreigner now! But cheaper for the Thai people. So some expat angry Thailand and want Thailand to make the baht weak, so there shopping is cheaper. 

 

Sorry. It will not happen.

[Chivas]

24 minutes ago, AussieBob18 said:

 Just a matter of time. The longer they allow the Baht to stay too high (to make military Imports cheaper?) the harder and faster will be the decline when it occurs. 

 

Apologies for having to edit your post I wouldnt normally do but only to highlight the point....."The longer they allow" Unfortunately they simply cannot be seen to be manipulating their own currency or risk the wrath of the USA as they are already on a watch list for just that.

Am sure the Thais would love it back out to 33 but easier said than done

[saengd]

Sadly it's turned into a pretty low quality discussion about Thai economics where the major counter argument to any fact appears to be emoji's! I think I'll leave you all to it.

[Yinn]

1 hour ago, Sticky Wicket said:

And what do lower interest rates do?

Ok, I will explain for Sticky.

 

When Yinn put money in the bank, the bank pay Yinn for it.

If it lower, Yinn get less money extra money.

 

When Sticky need the loan, the bank take money for it. If it lower, Sticky pay less.

 

understand now Sticky?

[Jai Dee]

A couple of troll posts and replies have been removed.

[Number 6]

The irony of course is this economy is sputtering along at less than 2.8 GDP. That's a horror show for a developing country.

 

Value and faith of a currency is in its GDP.

 

If Thailand loses its currency reserves it has serious issues.

 

I think tourism numbers will tank as soon as the world economy takes a downturn. If you rely on poor people to holiday in your country nothing good will come of that. There is a limit.

[sawadeeken]

2 hours ago, saengd said:

What nonsense! 

 

So Thailand successfully develops tourism and exports, for which they get paid in foreign currency and that's supposed to be window dressing!  Then overseas investors decide the Thai economy is attractive and they want to invest in it and that further adds to the foreign currency reserves!

 

THB is strong because of demand, just like any currency strengthens when it is frequently purchased, this has nothing to do with overseas Thai's.

 

THB is not a fully convertible currency, there are limits to the amounts that can be exported or held by overseas banks, that's why foreign funds can't take a position against the currency, it's nothing to do with the foreign currency reserves.

 

 

Yes.... Nonsense............

It is only the present 'Powers in Charge' who are trying desperately to enhance their 'FACE' and they think they are fooling the 'Thai People' 'and the world'....... how much they are 'helping and bettering' their country....... It is just a matter of time until the truth is realized....... and this Army Gov't is overthrown....... Happy days AHEAD........   Be patient...........

[Yinn]

27 minutes ago, holy cow cm said:

What it does mean is unless you work here we are all losing thousands to tens of thousands of baht in monthly foreign transfers due to this problem.

Problem?

 

27 minutes ago, holy cow cm said:

 

Mine is up to the tens of thousands and that is a punch to the stomach. Now if they are wrong and it actually does breech the 30 mark to the dollar going to 29, then I hope to god we don't see the day again when it slid to 25 to a buck. This would be disastrous for too many expats as then it will not be to the stomach but a punch the head for all.

Maybe can bring your money to thailand now is 30. Then not worry. Send it back when it 25. You can make profit.

 

We have more tourist coming, chinese make more factory in Thailand now. 

i think baht will be more stronger. Up to you. 

[saengd]

10 minutes ago, Number 6 said:

The irony of course is this economy is sputtering along at less than 2.8 GDP. That's a horror show for a developing country.

 

Value and faith of a currency is in its GDP.

 

If Thailand loses its currency reserves it has serious issues.

 

I think tourism numbers will tank as soon as the world economy takes a downturn. If you rely on poor people to holiday in your country nothing good will come of that. There is a limit.

GDP (500 bill) growth of 2.8% in Thailand or 6.6% (of 239 bill) in Vietnam, it's almost the same number!

[Sticky Wicket]

21 minutes ago, Yinn said:

Ok, I will explain for Sticky.

 

When Yinn put money in the bank, the bank pay Yinn for it.

If it lower, Yinn get less money extra money.

 

When Sticky need the loan, the bank take money for it. If it lower, Sticky pay less.

 

understand now Sticky?

It was rhetorical!!!!

[marqus12]

44 minutes ago, Yinn said:

Several factors are attracting investors to Thailand, making it a haven for foreign money. But its healthy current account tops them all, according to analysts at Goldman Sachs Group Inc. The International Monetary Fund forecasts the country will post a surplus of 6% of gross domestic product this year, almost double that of Japan

Before 2008 crash my country's currency was pumped in various ways
during the collapse it fell from 2 for 1 $... to 4 for 1 $ !

 

In 2009 GS boasted that made a great profit on it .

 

But even then my country was less dependent on exports

than Thailand now, and more on domestic consumption.

Edited October 26, 2019 by marqus12

[Is this real]

2 hours ago, saengd said:

What nonsense! 

 

So Thailand successfully develops tourism and exports, for which they get paid in foreign currency and that's supposed to be window dressing!  Then overseas investors decide the Thai economy is attractive and they want to invest in it and that further adds to the foreign currency reserves!

 

THB is strong because of demand, just like any currency strengthens when it is frequently purchased, this has nothing to do with overseas Thai's.

 

THB is not a fully convertible currency, there are limits to the amounts that can be exported or held by overseas banks, that's why foreign funds can't take a position against the currency, it's nothing to do with the foreign currency reserves.

 

 

Whaaat?

 

Tourism has dropped for the past 4 years.

 

Do you see what is happening?

[Winky Wilson]

It took Donald over a year to find out Thailand our ally was using the Federal Reserve as their piggy bank. Donald forgot about Thailand after they agreed to buy mega coal from the USA. The baht has momentum at 26 baht per dollar by 2022. A smile and a wayyy is great for sleight of hand.

[NanLaew]

2 hours ago, Sticky Wicket said:

Must be a reason to have such a large amount of dollars on hand?!

Because all their gold reserves are in China?

[englishoak]

It's a misconception that a currency rising necessarily means that your economy is doing well. Currency rates have more to do with trade, central bank interest rates, currency reserves, commodities, etc.

 

Sometimes there's a correlation because the central bank might raise interest rates when the economy is doing well (to slow inflation), which strengthens the currency. But it's not a cause. Inflation is running high, not in the official economy but just look in 7/11, Tescos and on the street for consumables and anyone can see its in the double digits year on year over last few for much and will continue as yet another symptom of a strong currency.

 

However

 

The Baht is not going to crash, the fundamentals just arnt there for that, most likely it will strengthen more. The offset of that will be less tourism,  growth will slow, exports will continue to lose out in competitiveness and manufacturing relocate as a result.  The home job market and average Thai will find it hard going and many low paid jobs are in these sectors, much of which will not be coming back. 

 

Even in the event of the baht dropping in value, automation and other countries capitalising on Thailand's high Bht will be keen to not lose what they have gained and stay competitive, ( like the rice market ). China is also becoming more an exporter of fresh produce to Thailand every year and a strong Bht will encourage importers to do more of the same. More comes from China than many might realise and once China has a foothold in a sector its very hard to dislodge..eg Durian is on that target list, prices are going to come right down in a few years time, just watch.  

 

All of this means Thailand's average family is not going to have an easy time in the coming years any more than expats and those wishing to live there. If it wasnt bad enough with the likely worsening exchange rates, rising prices, health care prices/requirements and visa hoop jumping are likely to get worse than better,  that financial help to the Thai family is going to be increasingly required and important too. 

 

Despite the bht being strong and probably continuing to be, in the not too distant future there are going to be a lot of very unhappy and increasingly poor Thai people, and we all know what happens in LOS then.

 

Its a problem for most everyone, both average Thai and expat trying to live there or with a Thai family. Good luck to one and all, we and our families are going to need it.  

[Mavideol]

4 hours ago, AussieBob18 said:

As it all things related to big finance, what always eventually comes after an absolutely bloated over-value, is a massive crash and over-devaluation.  The Baht is eventually going to crash and when it does it will crash big time - be prepared. 

 

the magic word here is "WHEN" because the majority of us is struggling and don't know for how long we can hold. It's an old saying everything that goes up has to come down but again WHEN

[Cool Aid]

3 hours ago, canopus1969 said:

Nonsense – just look at the fundamentals 

 

Wich Fundamentals?? Poor economy, real-estate bubblle poor workforce or household debt ??

[englishoak]

3 minutes ago, Mavideol said:

the magic word here is "WHEN" because the majority of us is struggling and don't know for how long we can hold. It's an old saying everything that goes up has to come down but again WHEN

Recession most certainly and coup/civil unrest probably but that wont affect the Bht direction like the last ones didnt IMO  unless theres an immediate policy shift and action by the BOT and Co forget a Baht currency crash for at least 5 years poss a decade. 

[billd766]

3 hours ago, canopus1969 said:

Nonsense – just look at the fundamentals 

 

I looked at the fundamentals.

 

Exports are down, (the government says they are up)

Tourism is down. (TAT says that they are rising)

The economy is down. (the government says they are up)

Car manufacture is down

Personal debt is up. (The BoT says that is not a problem)

The THB is stronger than it has been since 2013 when Yingluck was PM

 

 

[Moo 2]

I have to reply to this one,

First, 2013 is about the time the militaries made a mess with democracy by kicking the current elected

        government and that's the time the Baht started crumbling.

Second, trying to find excuses why the Baht is so strong it's an insult to people's intelligence.

The reason is the Thai Elite is investing heavily offshore and when the Baht 

will get back to where it should be, then the Elite will bring their money back to Thailand, et voila!

No more comments.

 

 

"All the money I earned through cheating, I lost it by earning it honestly"

 

[canopus1969]

4 minutes ago, billd766 said:

I looked at the fundamentals.

 

Exports are down, (the government says they are up)

Tourism is down. (TAT says that they are rising)

The economy is down. (the government says they are up)

Car manufacture is down

Personal debt is up. (The BoT says that is not a problem)

The THB is stronger than it has been since 2013 when Yingluck was PM

 

 

Oh dear, read the article  - healthy current account, reserves and negligible inflation = high THB

[Sticky Wicket]

2 minutes ago, canopus1969 said:

Oh dear, read the article  - healthy current account, reserves and negligible inflation = high THB

 

Negligible inflation? I wonder what basket of goods they are using, because it's not mine!

[holy cow cm]

 

1 hour ago, Yinn said:

The negative about everything thailand member will ignore this information.

In this people eye, the tourist has all gone home, airport empty, the factory closed. And the baht is so strong because “Thailand” hate the expat. TAT lie about, the thai bank lie everything. AND THE “Chinese” take over Thai people.

 

There imagination. The say to each other everyday. They really believe it.

 

BUT IN THE REAL WORLD.

 

Several factors are attracting investors to Thailand, making it a haven for foreign money. But its healthy current account tops them all, according to analysts at Goldman Sachs Group Inc. The International Monetary Fund forecasts the country will post a surplus of 6% of gross domestic product this year, almost double that of Japan.

 

Thailand’s reserves and negligible inflation also provide investors comfort. The central bank’s foreign-cash pile stands at $220 billion, the equivalent of more than 12 months of imports. And inflation, currently 0.3%, has been running below the central bank’s target of 1% to 4% since June.

 

As if these weren’t enough, Thailand is getting a boost from gold. A hub for bullion trading, Thailand has benefited as jitters about the U.S.-China trade war and global economic slowdown have driven a 17% gain in the price of the metal this year.

 

 

So our “problem” is economy to strong, to big surplus, to much money and to much gold. Terrible problem 5555555

The cheese and wine so expensive for the foreigner now! But cheaper for the Thai people. So some expat angry Thailand and want Thailand to make the baht weak, so there shopping is cheaper. 

 

Sorry. It will not happen.

Actually not true as Thailand loses out. Just look at rice exports already. So much cheaper to buy from Vietnam and Cambodia if for long grain or parboiled. Thailand is a big loser. For tourism think again. People will stop coming and go somewhere else. The old saying " Get a Bigger Bang for the Buck". Thailand aint all that for beaches and travel. Or they stay home.

 

For expats it will be a killer if they don't have the savings in the bank to show the Immigration so are forced to leave. That is monthly spending which in-turn slaps the local economy and folds into Thai families who are supported by it.

 

If you look most Thai people are in debt up to their ears and most do not have a savings over 20k if even that. Paycheck to paycheck. With the strong baht how would you like to be missing the extra 30,000 baht in money transfers you got a year ago and miss now? For many expats it is just cheaper to pick up and go get the most for the money in Vietnam or somewhere else that really appreciates the foreigner. That missing 30k baht does hurt don't you think? Even 15,000 baht hurts don't you think? Unless you are wealthy already Yinn, the strong baht hurts everyone, not just expats. My wife for one has a restaurant, and increases in ingredients do hurt her and the Thai consumers. 

 

Banks here love to give variable loans to Thai. so the bank suck money.

 

As for foreign investment, the government gives incentives and tax breaks to produce here, but the strong baht still will turn away potential investors as is too risky, to where Vietnam is on a huge upswing.. Foreign food buyers will just find ordinary products somewhere else or cancel the products from here or try to suffer through these economic hard times. Where it hurts the Thai side is factory must absorb too as they can never inflict too much extra cost on the byer. Why? The buyer walks plain and simple.

 

Ok, that is my rant for the day. Enjoy your afternoon. 

[Mavideol]

3 minutes ago, holy cow cm said:

 

Actually not true as Thailand loses out. Just look at rice exports already. So much cheaper to buy from Vietnam and Cambodia if for long grain or parboiled. Thailand is a big loser. For tourism think again. People will stop coming and go somewhere else. The old saying " Get a Bigger Bang for the Buck". Thailand aint all that for beaches and travel. Or they stay home.

 

For expats it will be a killer if they don't have the savings in the bank to show the Immigration so are forced to leave. That is monthly spending which in-turn slaps the local economy and folds into Thai families who are supported by it.

 

If you look most Thai people are in debt up to their ears and most do not have a savings over 20k if even that. Paycheck to paycheck. With the strong baht how would you like to be missing the extra 30,000 baht in money transfers you got a year ago and miss now? For many expats it is just cheaper to pick up and go get the most for the money in Vietnam or somewhere else that really appreciates the foreigner. That missing 30k baht does hurt don't you think? Even 15,000 baht hurts don't you think? Unless you are wealthy already Yinn, the strong baht hurts everyone, not just expats. My wife for one has a restaurant, and increases in ingredients do hurt her and the Thai consumers. 

 

Banks here love to give variable loans to Thai. so the bank suck money.

 

As for foreign investment, the government gives incentives and tax breaks to produce here, but the strong baht still will turn away potential investors as is too risky, to where Vietnam is on a huge upswing.. Foreign food buyers will just find ordinary products somewhere else or cancel the products from here or try to suffer through these economic hard times. Where it hurts the Thai side is factory must absorb too as they can never inflict too much extra cost on the byer. Why? The buyer walks plain and simple.

 

Ok, that is my rant for the day. Enjoy your afternoon. 

that's a simple/good explanation, unfortunately too much for her and so many other Thai people that can't see further than the tip of their nose,,, if they could see a wider picture/wider effect they may change their opinion

[stigar]

IMF says the thai bath is overpriced.Morgan Stanley says the same.The strong thai bath is a problem for thailand.The only one who can effect the thai bath is centralbank they say.

I pay less for a beer in the pub in norway then bangkok.Porkmeat is cheaper in norway.

My wife said that the prices go up even in the local markeds.

[holy cow cm]

1 hour ago, Yinn said:

Problem?

 

Maybe can bring your money to thailand now is 30. Then not worry. Send it back when it 25. You can make profit.

 

We have more tourist coming, chinese make more factory in Thailand now. 

i think baht will be more stronger. Up to you. 

Your a funny girl. Bring my money here? That's a crazy notion. And ship it back out? Do you know the restrictions and hurdles there are that Thailand regime now imposes on the foreigners regarding doing that? And the Thai banks only guarantee a little in coverage. It is plainly not safe.

 

China can make all the factory they want here but they aint going to be selling the product in the USA under having a tax break if they trying to import Chinese material and ship it back out under Thai. US just doesn't want the Chinese junk anymore. 

 

Tourism is way down. Don't believe everything you read. 

 

If the baht get's stronger, you should cry instead of be happy. It only hurts your country and everyone in it except for the elite girl!