Baht weakens after hitting Bt29/dollar

By The Nation

 

The Thai currency moved down to Bt 30.18/dollar this morning (January 2) after the weighted-average interbank exchange rate strengthened to Bt30.121 a dollar on December 30, a day before the New Year holidays, assistant governor of the Bank of Thailand Vachira Arromdee says.

 

The baht has retreated after passing the Bt30 mark to Bt29 level against the US dollar in the New Year period.  

 

The Thai currency moved down to Bt 30.18/dollar this morning (January 2) after the weighted-average interbank exchange rate strengthened to Bt30.121 a dollar on December 30, a day before the New Year holidays, assistant governor of the Bank of Thailand Vachira Arromdee said today (January 2).

 

The depreciation today, she said, was mainly driven by the return of market liquidity but warned that the baht has been highly volatile as the market adjusts to a new equilibrium between market forces of buying and selling US dollar.

 

The central bank will closely monitor the exchange rate market, she said.

 

“Participants should wait for market adjustment to settle in before making transactions,” she added.

 

The baht, in spot market, surged past the Bt30/dollar level to over Bt29 on December 31 and January 1.

 

Strengthening of the baht had put much pressure on the Thai economy last year, said Tisco Research. It also forecast growth of Thai gross domestic product at just 2.6 per cent in 2020, up from 2.5 per cent estimated for 2019.

 

Source: https://www.nationthailand.com/business/30380065

 

-- © Copyright The Nation Thailand 2020-01-02

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1 hour ago, snoop1130 said:

The depreciation today, she said, was mainly driven by the return of market liquidity but warned that the baht has been highly volatile as the market adjusts to a new equilibrium between market forces of buying and selling US dollar.

New equilibrium = central bank intervention.

 

SIT

I'll be happy when it his 40 to the dollar. lol

 

12 minutes ago, Somewhere In Time said:

New equilibrium = central bank intervention.

 

SIT

 

  No.  It means the markets opened again after the New Year and after everyone had sold off their holdings to lock in profits (or losses, for tax purposes) for 2019 on the last day of the year.  Today, they buy back again.  Same thing happens (often) in the stock exchanges.  

Ah yes.  Solid fundamentals. 

 

Now then, the central bank recently stated they will be monitoring the baht's strength.  With the baht sinking today more than it had in over a decade against the greenback, the assistant governor of the BOT does come across as a very smooth talker, indeed.

 

New equilibrium = central bank intervention.

 

SIT

For Euro owners the Baht is falling (or the Euro is rising). 

Looking forward to 25. That plus rising prices in Thailand will really make some of you moan.

 

At some point it won’t make financial sense to be here if this trend continues.

Anyone notice that when your currency slips - even if it goes back immediately - you still get hammered for the drop for a week after

Ah, I remember the days when it was 20 Baht to a US $.  But I could rent a house up country and survive on 3,000 Baht a month. 

The year end hiccup burp of the USD/THB pair has been way overdone, there are lots of valid reasons why that happened and now normal service has been resumed.

 

Looking forward there is a real concern that a strengthening trend will continue throughout the year, USD is forecast to weaken because of the of the end of the trade war combined with the Fed's moves on interest rates. The Thai banks are separately and collectively forecasting USD/THB at under 29 for the end of 2020, it will cost a bunch of foreign currency reserves money to to achieve that.

 

Here's the Deloitte economic overview for ASEAN and Thailand for 2020, note the US economic implications. https://www2.deloitte.com/th/en/pages/about-deloitte/articles/thailand-economic-outlook.html

Edited January 3, 20206 yr by saengd

Baht falling after such a long run.....and such "coincidently" odd timing after whispers of currency manipulation and possible sanctions.....

 

Just a  slight pull back before it surges again

The depreciation today, she said, was mainly driven by the return of market liquidity but warned that the baht has been highly volatile as the market adjusts to a new equilibrium between market forces of buying and selling US dollar.

 

Is this the biggest load of nonsense you have heard so far this year?

15 hours ago, snoop1130 said:

The baht has retreated after passing the Bt30 mark to Bt29 level against the US dollar in the New Year period. 

Amazing how that can happen, it's like a miracle.

13 hours ago, Just1Voice said:

I'll be happy when it his 40 to the dollar. lol

 

And 60 to the pound I’ll be happy too

This begs the question:  Haven’t they (BoT) done enough damage to the economy?  Sure, they have pushed the Baht down a smidgeon.  How about limiting the amount of hot money inflows on a daily basis?  Set a maximum amount—then shut her down?

Or at least suspend short term bond sales for the last week of the month—so pensioners can get a decent return when their moneys arrive on or near the first day of the month.  After that, they can pound down the USD for three more weeks—if they really need their hot money fix.

And my final observation: The Chinese Yuan continues to rise.  Can’t they call it good enough—and find another small economy to dump on?

 

1 hour ago, spidermike007 said:

The depreciation today, she said, was mainly driven by the return of market liquidity but warned that the baht has been highly volatile as the market adjusts to a new equilibrium between market forces of buying and selling US dollar.

 

Is this the biggest load of nonsense you have heard so far this year?

Just wait plenty more to come on here????

26 minutes ago, cnx101 said:

And 60 to the pound I’ll be happy too

When I first retired to Thailand almost 20 years ago it was 80 baht to 1GBP! Many of us retirees were "Baht millionaires" based on pension income, but not nowadays.

13 minutes ago, Burma Bill said:

When I first retired to Thailand almost 20 years ago it was 80 baht to 1GBP! Many of us retirees were "Baht millionaires" based on pension income, but not nowadays.

 

 

1 hour ago, Isaan sailor said:

This begs the question:  Haven’t they (BoT) done enough damage to the economy?  Sure, they have pushed the Baht down a smidgeon.  How about limiting the amount of hot money inflows on a daily basis?  Set a maximum amount—then shut her down?

Or at least suspend short term bond sales for the last week of the month—so pensioners can get a decent return when their moneys arrive on or near the first day of the month.  After that, they can pound down the USD for three more weeks—if they really need their hot money fix.

And my final observation: The Chinese Yuan continues to rise.  Can’t they call it good enough—and find another small economy to dump on?

 

You've really lost the plot IS, I mean truly!

Or quite possibly if, one new this was going to happen or ordered this to happen on a particular day or whatever. One could make a <deleted>load of extra cash!!! ????????

4 hours ago, Damrongsak said:

Ah, I remember the days when it was 20 Baht to a US $.  But I could rent a house up country and survive on 3,000 Baht a month. 

That is way back in the day.  I remember in 1983 when it was 23 baht to a US $.

2 hours ago, Isaan sailor said:

This begs the question:  Haven’t they (BoT) done enough damage to the economy?  Sure, they have pushed the Baht down a smidgeon.  How about limiting the amount of hot money inflows on a daily basis?  Set a maximum amount—then shut her down?

Or at least suspend short term bond sales for the last week of the month—so pensioners can get a decent return when their moneys arrive on or near the first day of the month.  After that, they can pound down the USD for three more weeks—if they really need their hot money fix.

And my final observation: The Chinese Yuan continues to rise.  Can’t they call it good enough—and find another small economy to dump on?

 

You've already had your 'hot money' fixation explained. i.e It doesnt exist.

 

The Chinese yuan is 6.96 to the dollar, 9.17 to the pound. Baht is 4.31. Whats so remarkable about that? It hasn't moved appreciably for ages.

 

And of course, the first thing in the minds of the Thai top bankers is expat pensioners.........

This is a nice wrap up of the issue at hand,
as they call it "too much success",
and also a consideration of possible actions:

https://asia.nikkei.com/Opinion/Thailand-s-problem-Too-much-success?utm_campaign=RN%20Subscriber%20newsletter&utm_medium=opinion_newsletter&utm_source=NAR%20Newsletter&utm_content=article%20link&del_type=6&pub_date=20191228093000&seq_num=20&si=%%user_id%%

3 minutes ago, KKr said:

This is a nice wrap up of the issue at hand,
as they call it "too much success",
and also a consideration of possible actions:

https://asia.nikkei.com/Opinion/Thailand-s-problem-Too-much-success?utm_campaign=RN%20Subscriber%20newsletter&utm_medium=opinion_newsletter&utm_source=NAR%20Newsletter&utm_content=article%20link&del_type=6&pub_date=20191228093000&seq_num=20&si=%%user_id%%

Look, if you're going to come here posting sensible articles that contain possible solutions and not chant the forum mantra that it's the elites are manipulating the Baht, you're simply not going to fit in. ????

18 minutes ago, saengd said:

Look, if you're going to come here posting sensible articles that contain possible solutions and not chant the forum mantra that it's the elites are manipulating the Baht, you're simply not going to fit in. ????

did it come to mind that I post here on purpose so I look smart,
whereas the rest of the world already figured it out? ????
Thanks anyway for reading !

The conflict with Iran will see money flow back into safe havens such as USD, that will see USD strengthen, especially against the Baht.....expect a better USD/THB exchange rate when markets open on Monday.

21 hours ago, ChrisY1 said:

Baht falling after such a long run.....and such "coincidently" odd timing after whispers of currency manipulation and possible sanctions.....

 

The last thing America wants is a falling Baht..  a cheaper Bt means more Thai exports to the US and more expensive imports.. there is already a huge trade imbalance in Thailand's favour.. $19.3 billion in 2018.. the currency manipulation scream would come if Thailand was to lower the Bt.. 

https://ustr.gov/countries-regions/southeast-asia-pacific/thailand

 

 

16 minutes ago, saengd said:

The conflict with Iran will see money flow back into safe havens such as USD, that will see USD strengthen, especially against the Baht.....expect a better USD/THB exchange rate when markets open on Monday.

Interesting point.. but I haven't seen that the US is considered a safe haven.. At Christmas when the markets took a break money flowed to Thailand not the US.. I hope I'm wrong but this could see the Bt strengthen..   The big dip in the graphs below is the Christmas market break..  first Thailand.. the 2nd the US..

12 minutes ago, Laza 45 said:

The last thing America wants is a falling Baht..  a cheaper Bt means more Thai exports to the US and more expensive imports.. there is already a huge trade imbalance in Thailand's favour.. $19.3 billion in 2018.. the currency manipulation scream would come if Thailand was to lower the Bt.. 

https://ustr.gov/countries-regions/southeast-asia-pacific/thailand

 

 

I think this is an issue of balance and fair value.......as you say, a cheaper Baht means more exports and more expensive imports but not to the point of being labeled a currency manipulator, as long as it's not made too cheap. That label already exists because of Thailand's trade surplus, it's one of the three criteria the US uses. But a 10% drop in the value of THB would represent fair value, it would erase the current account surplus and it would help Thai exports. It might just be that a strengthening of USD will accomplish some of that.