Analysts differ on baht movement as BOT sees decline 

By The Nation

 

As of December 4, foreign and Thai analysts saw opposing directions of the baht movement. 

 

Foreign analysts predicted that the baht would depreciate next year, contrary to the views of their Thai counterparts.

 

The Bank of Thailand Scholarship Students (BOTSS) cited analysts’ forecast on the baht exchange rate in 2020, complied by Bloomberg news agency. It said median of the baht value would be declining next year.

 

The BOTSS Facebook page is run by current and former staffs of the central bank, it shares economic news and data with the public.

 

As of December 4, foreign and Thai analysts saw opposing directions of the baht movement. 

 

JPMorgan Chase forecast the baht would depreciate to Bt30.6 per dollar in the fourth quarter next year. While Standard Chartered believed it would drop to Bt31 per dollar in the same period and Bt31.30 in 2021.

 

Rabobank put the baht value at Bt33.8 per dollar in the final quarter of next year.

 

Their views differed from those of Thai analysts who estimated the baht would continue to appreciate against the US dollar and other currencies in the region. 

 

The predictions of foreign and Thai analysts suggested that the baht would move in either direction, or moving in a range between Bt28.7 to 33.8/dollar, according to BOTSS.

 

Earlier, deputy central bank governor Mathee Supapongse said the baht was on a downtrend but urged exporters to brace for a two-way movement.

 

His message was apparently intended to counter the negative views of some Thai exporters and analysts who saw continuous strengthening of the baht after a 7 per cent gain on the dollar this year.

 

Analysts at Kasikornbank forecast the baht to appreciate to Bt29.3 per dollar next year.

 

Charl Kengchon, executive chairman at Kasikorn Research Centre said on Monday that the baht will strengthen further if the US Federal Reserve lowers its key policy rate again in the first quarter next year. It is likely to happen, he added.  

 

A major factor pushing up the baht is the country's high current account surplus at around $30 billion, despite the higher figures in the past two years. 

 

Foreign investors will still consider the baht a safe haven asset among emerging market economies, Kengcho believes.

 

Source: https://www.nationthailand.com/business/30379273

 

-- © Copyright The Nation Thailand 2019-12-11

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Wow This is definitive

This analyst says it can only go in one of three directions - up, down or stay the same.

 

I'm fairly sure I could be right, maybe, perhaps, close enough at least.

Anything of relevance?

3 hours ago, webfact said:

Thai analysts who estimated the baht would continue to appreciate against the US dollar and other currencies in the region. 

 

I guess they may have used the same calculus theory which TAT use to estimate the number of tourists visiting (or not as the case may be)!!!

Hmm, wonder why "full-hedge" came to my mind ... ????

CM tourist numbers are way down for a number of reasons.  nice and quiet this year.

Another endless soap opera, the Baht will remain where it is until the government is convinced it has done enough for friends!
AMEN!

A number of years back a big man bought a Chinese company he made massive USD denominated loans to finance the deal. Most of this man's income is however in Baht. Then he supports a regime change and suddenly the Baht strenghtens. He then gets major government contracts. These contracts are used as leverage to obtain Baht denominated loans. Funds from these loans are used to repay his USD denominated loans at 20% lower than what it would have been before the regime change. Even if he shares 1% of his gains with his friends they would smile. As for the rest of the Thai's let them eat cake. 

Every article I've read lately on the Bangkok post from Thai officials the Baht is too strong and something has to be done? That seem to be what the article is saying which is the problem I think?  As soon as comments are made outside of Thailand by non-Thais then they retract? Is it a lost of face and not wanting outsiders to criticize them so they go opposite?  Same as the thinking if business is down charge more to make up for the lost?????

4 hours ago, webfact said:

Earlier, deputy central bank governor Mathee Supapongse said the baht was on a downtrend but urged exporters to brace for a two-way movement

Talk about covering all the bases !

12 minutes ago, thailand49 said:

Same as the [Thai] thinking if business is down charge more to make up for the lost?????

Thai thinking?  ????????????????????????????????????????????

A humble laborer got on an elevator, and to his surprise, he found himself alone with Albert Einstein.  He started to look very uncomfortable, so Einstein asked what was wrong.

“I am here with the world’s smartest man, what could we ever talk about with equal knowledge and certainty?”

 

“Well, we could always talk about the future direction of interest rates and currency!”

If they spent some money on the country instead of filling their pockets, the infrastructure, the diabolical sidewalks, the hanging cables, the piles of trash, the stinking drains, the filthy beaches, the stinking water that run from their taps, and that cesspool they call the ocean. If they even considered putting half of that right they’d be skint.

If you look at all of the problems that are plaguing this nation right now, and add in the decimated tourism sector, and the high potential for a worldwide recession in the near future, it is inevitable Thailand will be affected, and see a decline in the property sector, which is way too overbuilt, a continued decline in the most important parts of the tourism sector (wealthy tourists, not low baht tourism) and a subsequent decline in the Thai baht, which nearly everyone agrees is vastly overinflated at this time. 

 

So, yes they are probably correct to predict the baht will decline, and the locals are probably incorrect, as usual, that it will stay strong. 

I think the Baht will finally start to depreciate next year.

 

The government and central bank are finally starting to 'jaw bone' the Baht down (talking it down) which will cause uncertainty in the market and at least halt its appreciation (assuming they keep talking it down).

 

The government/bank still needs to take firm action to actually bring it down to boost exports and tourism, and bring the economy to a soft landing. They need to follow through and use the country's foreign reserves to buy dollars and take the pressure of the Baht.

 

Of course, they will still make a nice pile of money when the Baht comes down and they can buy it back cheaper.

2 hours ago, 30la said:

Another endless soap opera, the Baht will remain where it is until the government is convinced it has done enough for friends!
AMEN!

As long as their friends allow them to do so.

Caine, with all due respect, we are a developing nation.

The roads here for example are very good compared to say India or Indonesia.

As too the Bahts future the article is basically "toss a coin" so we will "suck it & see"

The amount of manufacturing in places like Rayong & Ayuttatta amaze me every time I drive around the place. mainly exported.

Foreign reserves are very good, Balance of payment holding its own, so I cannot see any major drop in the Bahts value until next July/ August.

Interesting that Kasikorn say the baht will continue to rise, but they don't justify their statement in any large degree.  Think peeps, production is down, unemployment is rising, tourism is falling (despite TAT lies), farming is struggling with drought in many areas, which are all strong indicators that there will be less money going in to the Banks and a higher ratio of loan defaults.  Solution..........baht devaluation and it is starting, slowly already.  I wonder if the Kasikorn people went to the same Uni as the TAT people?

Talk is cheap. Thailand is expensive. So why not do something to bring the Baht down?

4 hours ago, malibukid said:

CM tourist numbers are way down for a number of reasons.  nice and quiet this year.

same here down the south, compared to last year maybe only half of them come.... but TAT not worried, their (inflated) number still look good 555

5 hours ago, Caine said:

If they spent some money on the country instead of filling their pockets, the infrastructure, the diabolical sidewalks, the hanging cables, the piles of trash, the stinking drains, the filthy beaches, the stinking water that run from their taps, and that cesspool they call the ocean. If they even considered putting half of that right they’d be skint.

You think too mutt

Are they talking about the Baht or whore’s drawers ?

Up, Down, stay the same, I am somewhat bewildered

Bank of Thailand/Analysts are always saying Baht will weaken for the past few years but instead it strengthened. ????

 

Due to this fake news, I waited a few years for it to weaken when I should have bought more Thai baht in the past.

57 minutes ago, EricTh said:

Bank of Thailand/Analysts are always saying Baht will weaken for the past few years but instead it strengthened. ????

 

Due to this fake news, I waited a few years for it to weaken when I should have bought more Thai baht in the past.

You need to learn the difference between an OPINION about FUTURE events pretty much outside control, and what people like you call "fake news."  

6 hours ago, Mavideol said:

compared to last year maybe only half of them come

Do you have access to serious data or do you just count the guests in the bar every night? 

10 hours ago, spidermike007 said:

Thailand will be affected, and see a decline in the property sector, which is way too overbuilt

Agreed property overbuilt. IMO China will be in same boat overbuilt property 

12 months ago the Baht was 23.68 to the aussie dollar and now is 20.71.

5 years ago the Baht was 27.05  

10 years ago it was 32.05

 

That`s the only numbers that matter as I see a trend

(  Nobody is coming back ) 

41 minutes ago, KEITHY BOY said:

12 months ago the Baht was 23.68 to the aussie dollar and now is 20.71.

5 years ago the Baht was 27.05  

10 years ago it was 32.05

 

That`s the only numbers that matter as I see a trend

(  Nobody is coming back ) 

Yes, that's the reality.

 

I have been waiting for the Baht to drop for years now but it just beats any prediction.

10 hours ago, robertson468 said:

Interesting that Kasikorn say the baht will continue to rise, but they don't justify their statement in any large degree.  Think peeps, production is down, unemployment is rising, tourism is falling (despite TAT lies), farming is struggling with drought in many areas, which are all strong indicators that there will be less money going in to the Banks and a higher ratio of loan defaults.  Solution..........baht devaluation and it is starting, slowly already.  I wonder if the Kasikorn people went to the same Uni as the TAT people?

 

The currency rate is determined by market forces of demand and supply. 

 

As long as Thailand has a strong surplus, its currency will remain strong even if there is unemployment because its the foreign fund managers that control the currency market and not the country.

 

If the government interferes in the currency rate, USA will put them into currency manipulator list and that is not what Thailand wants.