Why Is The Baht Not Dropping

[mshs]

6 hours ago, SteveK said:

Correct. Thailand has a ridiculous amount of foreign reserves, meaning the currency will be stable in the short-term at least. They have more in reserve than Germany, the UK, France, the UAE and even the USA (incredibly). Make your own guesses about why they have done this, but you don't need to be a genius to figure it out.

India and Brazil are 2 3rd world countries have twice the reserves Thailand has.

So does Russia an European power.

So does SKorea who have the wood put their exports (dropped for 15 months straight) with the free & reciprocal trade agreement.

China, 15 times the reserves Siam does.

 

 

[mshs]

6 hours ago, Thian said:

My guess is that the Chinese are buying the bahts at the moment because they can see their recession/crisis coming now....better be safe than sorry and put their money overseas.

Capital controls have been in place in China since the trade-war began.  Capital flight has ground to a halt for over a year now.

 

Even the bastion of capitalism Hong Kong, has instituted for the very 1st time, a declaration for anyone bringing in currency of over $15,200 in July.

Previously it was the only place on earth where one could legally walk in with any amount of cash without a declaration and many Chinese did just that, walked in with suitcases filled with Chinese bills.

[AussieBob18]

7 hours ago, Thian said:

Will the banks fall over from it? And what will happen to the farang who keep 800.000 in the thai bank? 

No. Loses out.

[TheAppletons]

"The Thai baht has flipped from Asia’s strongest currency in 2019 to one of the region’s worst performing this year, following an outbreak of a new coronavirus that originated from China.

 

The Thai currency has lost around 4.1% against the U.S. dollar so far this year, reversing almost half of its 7.9% gains against the greenback in 2019."

 

 

 

[saengd]

4 hours ago, mshs said:

India and Brazil are 2 3rd world countries have twice the reserves Thailand has.

So does Russia an European power.

So does SKorea who have the wood put their exports (dropped for 15 months straight) with the free & reciprocal trade agreement.

China, 15 times the reserves Siam does.

 

 

Except the ratio of GDP to foreign reserves shows that Thailand is batting way above its league., all the countries you mention have GDP in the trillions of USD, Thailand's is only USD 500 billion.

[saengd]

8 hours ago, Thian said:

That's a very clear sign......

Yes, a very clear sign that the insured level was excessively high and is now being brought back in line with the norm. After all, why should Thai banks inure accounts for 15 and 30 million or even for only 5 million when over 90% of Thai people have less than 50,000 baht in the bank! The idea of pushing those insurance levels so high was to attract capital and investment....job done.

[Thian]

4 hours ago, mshs said:

Capital controls have been in place in China since the trade-war began.  Capital flight has ground to a halt for over a year now.

 

Right, so how can the chinese buy huge moobaan's in thailand now then? Chinese are masters in avoiding laws and rules so i don't trust them for a second. They are also smart moneywise and their crisis is about to come so it would be smart to keep their money in a foreign currency...new biggest friend Thailand which is also very sensitive for brown envelopes would be a great option.

[saengd]

Just now, Thian said:

Right, so how can the chinese buy huge moobaan's in thailand now then? Chinese are masters in avoiding laws and rules so i don't trust them for a second. They are also smart moneywise and their crisis is about to come so it would be smart to keep their money in a foreign currency...new biggest friend Thailand which is also very sensitive for brown envelopes would be a great option.

Chinese citizens overseas are restricted to taking USD 50k per person out of the country each year, it's a serious restriction that hinders many who have several young children in international schools in Thailand.

[Thian]

9 minutes ago, saengd said:

Yes, a very clear sign that the insured level was excessively high and is now being brought back in line with the norm. After all, why should Thai banks inure accounts for 15 and 30 million or even for only 5 million when over 90% of Thai people have less than 50,000 baht in the bank! The idea of pushing those insurance levels so high was to attract capital and investment....job done.

1 million baht is not excessively high but if it was to attract capital it will soon flow out...singapore has a guarantee for 3 million baht iirc....and gives a higher interest rate as well.

 

Chinese can buy multi million properties in Thailand on their own name, that would be a better option than putting it on a bank account.

[Thian]

3 minutes ago, saengd said:

Chinese citizens overseas are restricted to taking USD 50k per person out of the country each year, it's a serious restriction that hinders many who have several young children in international schools in Thailand.

So you believe the chinese following the law and not bribing their way out of their system?

[Vascoda]

13 hours ago, Forza2002 said:

Everybody was expecting it to tank...

Not everybody. CUrrency traders and intelligent people who understand the dynamics of currency trading, never expected it to tank. Only farangs living on a megre pension accounts and self appinted exconomic experts extected it to tank. 

[Chivas]

10 hours ago, BritManToo said:

Over the last 10 years the pound lost 20% against the Thai baht.

Now explain why Canada (-29%), Australia (-30%), and the Swedish (-36%) currencies have lost more than the UK.

And the Euro (-27%), almost as much (I'm surprised the Euro lost that much).

And Vietnam has lost 25% against the Baht in the last 10 years.

Dear oh dear not again !! 

For goodness sake there are two currency pairings that make up the bottom line number crunch.

 

(Sterling/Dollar) x (Dollar/Baht) for example for Brits. Now movement in either pairing will effect the bottom line. Now the 2nd pairing in the example is used in every calculation that effects our exchange rates with the Baht

 

The 1st pairing though (insert your own currency instead of Sterling) will depend on your own countries financial standing against the USD.....now Sterling may have lost 20% and the Aussies 30% against the Baht but thats down to our own financial standing against the Yankee Dollar

 

There is no direct exchange rate between any currencies except the worlds "reserve"  the USD

 

The only pairings you need to grasp and understand are in the first example substituting your own currency for Sterling if required

 

 

[Vascoda]

11 hours ago, DannyCarlton said:

It makes perfect sence if you take into account the massive currency manipulation

Currency manipulation to make it weak or strong? US admin thinks Thailand is still very weak and may be it is manipulating currecny to make it even weaker and it should be 25 BHT/USD. It just escaped from US currency manipulator watch list narrowly. 

[saengd]

25 minutes ago, Thian said:

So you believe the chinese following the law and not bribing their way out of their system?

I have Chinese friends who tell me this is a real problem for most people.

[Scott]

Off-topic posts reported and removed. 

 

[DannyCarlton]

4 minutes ago, Vascoda said:

Currency manipulation to make it weak or strong? US admin thinks Thailand is still very weak and may be it is manipulating currecny to make it even weaker and it should be 25 BHT/USD. It just escaped from US currency manipulator watch list narrowly. 

The opposite is true. Baht currently at $31. Bringing it down to $25 would be weakening the baht.

[saengd]

Just now, DannyCarlton said:

The opposite is true. Baht currently at $31. Bringing it down to $25 would be weakening the baht.

Ummmm, not really! Moving from 31 baht per dollar to 25 baht per dollar would mean the baht is getting stronger.

[englishoak]

2 minutes ago, Chivas said:

Dear oh dear. It doesn't take someone in finance for 36 years (me) to understand and grasp exactly where Bozo is taking us

We're going WTO 99.999% which has been his intention from day 1. Just look at Boris' conversation with Europe and the USA !!  Trade deal lol....not in a million years because he doesnt want one simple as that

 

I dont have a problem with WTO never have. Only finance centric tards do and its still a conspiracy theory ..if your so good at finance calls you should be a multi millionaire soon then.... congratulations in advance..  

[Chivas]

Noticed the Baht at 00.45am today was at its weakest against the USD for 8 months at 31.22

Its currently gained a little back at 31.18 but the writing is on the wall in my opinion for a movement lower

Edited February 7, 2020 by Chivas

[Ventenio]

I'll address the dollar (too lazy to look at charts)

 

36 around Xmas in 2016.   OK, seemed a little weak but nothing crazy.

29.xx last month.   OK, seemed a little strong but nothing crazy.

 

Even if the baht goes back to 36, it doesn't mean all the gloom and doomers are right.  

 

If you are going to predict the gloom and doom, you better pick 45 to 50.

 

gold to 10,000?   bitcoin to 100,000?

 

YES, I admit I do think this Corona is the Baht Black Swan

 

I even got a package from China and wondered..... 

 

If in Thailand and fly to America and coughing, they will check you.  we are on the country list to be worried about

[Dcheech]

Coronavirus outbreak has turned Asia’s best-performing currency into one of the worst

 

[Logosone]

43 minutes ago, Chivas said:

Dear oh dear not again !! 

For goodness sake there are two currency pairings that make up the bottom line number crunch.

 

(Sterling/Dollar) x (Dollar/Baht) for example for Brits. Now movement in either pairing will effect the bottom line. Now the 2nd pairing in the example is used in every calculation that effects our exchange rates with the Baht

 

The 1st pairing though (insert your own currency instead of Sterling) will depend on your own countries financial standing against the USD.....now Sterling may have lost 20% and the Aussies 30% against the Baht but thats down to our own financial standing against the Yankee Dollar

 

There is no direct exchange rate between any currencies except the worlds "reserve"  the USD

 

The only pairings you need to grasp and understand are in the first example substituting your own currency for Sterling if required

 

 

 

Excellent post. You correctly explain the mechanism of calculating the exchange rate of the Baht. You are correct that the UK's financial standing against the US affects the Baht.

 

Though I have only been in finance for 24 years, not 36 like you, I would however venture that the USD is not the "world's reserve" currency, the world holds a number of reserve currencies. The USD accounts for about 60% of reserves held. Since the creation of the Euro the Euro has become an alternative reserve currency and around 20% of reserves held today are in Euro, a number which has steadily increased.

 

Former U.S. Federal Reserve Chairman Alan Greenspan said in September 2007 that the Euro could replace the U.S. dollar as the world's primary reserve currency. It was "absolutely conceivable that the euro will replace the US dollar as reserve currency, or will be traded as an equally important reserve currency".

 

https://en.wikipedia.org/wiki/Reserve_currency

 

I would also take issue with 'there are no direct exchange rates except with the USD', there are direct exchange rates with some pairs that are not USD, though of course the rate with the USD will still affect them even if not in the formalised way like with the Baht.

 

However,  with the Baht, and many other minor pairs your calculation example is correct.

 

 

[Moonlover]

12 hours ago, holy cow cm said:

if I die my wife knows to take it out immediately day by day by ATM from the several bank accounts. I'm not going anywhere. 

You need to come up with a better than that! Bank accounts of a deceased person are frozen until probate has been completed. Your wife would be committing an offence if she were to access them.

[holy cow cm]

18 minutes ago, Moonlover said:

You need to come up with a better than that! Bank accounts of a deceased person are frozen until probate has been completed. Your wife would be committing an offence if she were to access them.

I have a letter instructing her to do so. 

[Moonlover]

1 minute ago, ivor bigun said:

even with a joint account? in the UK my bank accounts with my wife are joint.

No. Joint accounts are fine. No probate required.

[Moonlover]

16 minutes ago, holy cow cm said:

I have a letter instructing her to do so. 

So you have a letter that instructs your wife to break the law. OK, as Thais say 'It's up to you'.

[Assurancetourix]

14 hours ago, henry2109 said:

If the elite would have bought foreign currency in massive amounts

SteveK never wrote this;
reread it gently trying to understand each word ...

 

"buying all their foreign currency denominated assets and investments."

 

he is obviously talking about tanks, used submarine (s) and a few or more tonnes of ammunition ...

[holy cow cm]

22 minutes ago, Moonlover said:

So you have a letter that instructs your wife to break the law. OK, as Thais say 'It's up to you'.

USA she is second name on the accounts and we have some joint accounts here. But you are correct, it should be all above board for the most part.

[metisdead]

Off topic posts and replies regarding BREXIT and the UK pound have been removed. 

[BritManToo]

I've always thought the Thai baht isn't dropping because China doesn't want it to drop.

The Thai factories are all closing, the tourists have all gone, and Thai crop prices are the lowest in the past ten years.

 

What other possible explanation can there be?