Will the Mighty Baht Topple

[Thingamabob]

No chance. Large published reserves, massive hidden reserves. Nobody in high places gives a toss about tourism, which is only a relatively small part of the Thai economy.

[Grumpy John]

He11 yer!  Next week I need to bring in Au$8000 which will be about 20 baht/Au$.  The day after I do the swap the ratio will become 23/1 or more!  ????

[19DL86]

9 minutes ago, Thingamabob said:

No chance. Large published reserves, massive hidden reserves. Nobody in high places gives a toss about tourism, which is only a relatively small part of the Thai economy.

Kind of have to agree on this sentiment, especially regards those in "High places" - no one in Govt or the ruling elite give a shhht but they should.

 

But I d consider what you say regarding tourism, this does employ a vast amount of the poor unskilled often undocumented Esaan population in various disguises.  

 

Tourism will collapse this year that's a certainty......you ll get millions of people without work or money.  That should be a grave concern to the ruling classes.

[baansgr]

On 4/16/2020 at 4:30 PM, johng said:

200+ billion USD foreign currency reserve

https://www.bot.or.th/App/BTWS_STAT/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

And people are starving on the streets with 10 million unemployed..disgusting

[nauseus]

On 4/16/2020 at 4:37 PM, JonnyF said:

If the rest of the world was doing great then I would expect the Baht to weaken.

 

However, the rest of the world is doing just as badly as Thailand (if not worse) so I don't expect it to weaken against other major currencies (USD, GBP, EUR etc.).

This is key. The rest of the world is not doing great and so it is difficult to say what will happen. Several major countries were happy to let their currencies fall, even before the present pandemic pandemonium. It's all relative and Thailand remains relatively strong, financially.

 

The USD is still (nominally) king and regarded as a safe haven but the amount of dollars recently created would have driven any other currency way down. A long way to go with this yet but I don't think any of the potential outcomes will be good. I don't expect the baht to drop much against other paper, whatever.

[baansgr]

24 minutes ago, Thingamabob said:

No chance. Large published reserves, massive hidden reserves. Nobody in high places gives a toss about tourism, which is only a relatively small part of the Thai economy.

Keep hearing it's a small part of the economy...yet apparently each of the 40 million tourists spend 5,000 baht a day...without tourism Thailand is nothing...it's rice exports have diminished as has the car industry......they don't really export or make anything else...

[Mavideol]

21 hours ago, DeeMoney said:

No. I predict Thailand will "restart" its economy far sooner than most other countries with far higher cases of the coronavirus.

 

We will have to see if China going back to work as we speak will have any effect on the value of the RMB though.

 

- Matteo

if China goes back to work doesn't really matter, they will have NO customers to buy their goods, the majoprity of the countries around the world still have their economies closed and if and when they open it will take some time for them to start working again with China, most have been disappointed with China's reaction to the pandemic, a lot of re-thinking about doing business with China will take place before they start to move

[uli65]

some people here will never understand the importance of the tourism sector for this country.

what utter nonsense to tell it's only a small part of the economy. dream on

 

 

[Advocate]

Does the UK Lira have the balls?

[cmarshall]

21 hours ago, grumpy 4680 said:

     I put a lot down to crooked UK financial bodies manipulating the pound to keep it low,

     

Brexit was the main reason for the drop, but now they know we're out, but the pound not come up again, then the PM gets Covid, down it goes again, then as soon as its said that restrictions are to continue longer, its down again.

     Yet Thailand can have a coup, and a rather dodgy election, but the Baht never moved.

Is it really beyond your intellectual capacity to grasp that both Brexit and quarantine restrictions reduce trade which is what has the largest effect on the value of GBP, while coups and dodgy elections in Thailand are not fundamentally economic events?

 

Here's a tip: when Brexit really happens cold turkey in January the GBP will lurch down yet again.

[BuddyPish]

On 4/16/2020 at 6:27 PM, cmarshall said:

The foreign currency reserves of the Bank of Thailand do not have an ongoing impact on the value of the Thai baht.  Acquiring reserve dollars would tend to depress the baht, other factors being equal, while buying baht with the dollars would increase the value of the baht.  But the pile of dollars sitting on the books of the BoT is basically inert with respect to the current value of the baht.

 

The baht has dropped against the dollar because of the reduction of exports and tourism which tend to drive up the value of the baht as well as the global flight of capital to the dollar as a safe haven.  Reserves only affect the value of the national currency when they are being increased or decreased, neither of which is probably happening now.

The currency reserves are only denominated in dollars for ease of reporting.

They're actually made up of all sorts including USD, EUR CNY but, regardless, they are apart of the reason the baht proved so popular and attractive to investors last year.

 

The notion of dollar as a safe haven is soon to be obliterated.

The Fed is standing behind pretty much every market as the buyer of last resort - repos, commercial paper, US Treasury notes, corporate bonds, junk bonds, ETFs. 
Its balance sheet is at $6.6 trillion from 3.9 trillion in the space of A MONTH and it's going to  bypass the primary market for US debt by buying US issued debt direct from the US Treasury. National debt stands at $24 trillion

One day ... . soon . . . . investors will just say "no".

Look out below

[BuddyPish]

Britain, US, Australia, NZ, EU countries all planning (or already engaged in) massive debt issuance. 
Quantitative easing up the wazoo, zero interest rates, helicopter money to send cheques to people sat at home, bailout out businesses. . . . 

These countries are in a far worse predicament than Thailand.

Thailand hasn't done any of this nonsense.

 

Expect GBP, USD, EUR, AUD, NZD to drift lower.
GBP to get killed over Brexit talks if they don't get pragmatic and ask for the extension.

 

All fun & games

[andy72]

2 hours ago, baansgr said:

eep hearing it's a small part of the economy...yet apparently each of the 40 million tourists spend 5,000 baht a day...without tourism Thailand is nothing...it's rice exports have diminished as has the car industry......they don't really export or make anything else...

exactly tourism is not a small part of the economy it is a major driver in many areas

we tend to overlook that a lot of tourism is in the black economy
and it feeds other parts of the black economy

well known fact 300,000 hookers are not getting the 5000 bht

but those 300,000 take how much cash they all but phones they pay rent 
they get over inflated bar drinks which helps keeps bars running
they take drugs not all
someones paying for all those fake tits and it aint medicare
they send money home to the folks in the hills it makes the shame more bearable

and thats just the hookers
we all know that tuk tuks taxis etc are famous for overcharging farang

no one declares all their illegal gains as they bow to Buddha pray for their sins and look for the next sucker in western terms go say 10 hail marys and keep  your pecker in your pants

 

no one can really equate the true soft gdp in thailand 
its not a fixed price state

its me happy you happy

so the uk has just told the public dont book any summer hols this year
no guarantee of lock down end

that said i still think covid is a cold weather virus but thailand would s till be crazy to open up

malaysia is more realistic it realises it has to rely on domestic tourism for 6 months
but in 6 months winters back no vaccine and maybe it all flares up
 

 

of course thb will not collapse it has lost 50% of its value in the past but all se asia was hit 
this is different
it will be interesting though just to see if tourism does not return 

you gotta see at least a 10% correction in value
and if thats the case the junta have to address the poverty because if they dont those food queues get bigger pretty soon they are a mob 

then they all get red teeshirts which dont feed them but does embolden  them

 

[WalkingOrders]

4 hours ago, Henryford said:

If anything it will strengthen. Thailand is not as stupid as the West in spending trillions to keep people under house arrest.

Thailand has already said they anticipate some big borrowing soon, even if not, developing economies like this, with tourism wiped, durable goods orders halted, do not need a high baht.

 

Its moved from 29 to near 33 per USD, banks are calling it to go 36-37. That range in a couple months if not sooner, the recovery decides if it re-strengthens. I dont see it falling more then that. The THB was high in part to strong performing thai econ. Was already weakening before virus hit. Its not bad for Thailand if baht drops a bit more. 

[WalkingOrders]

4 hours ago, nauseus said:

This is key. The rest of the world is not doing great and so it is difficult to say what will happen. Several major countries were happy to let their currencies fall, even before the present pandemic pandemonium. It's all relative and Thailand remains relatively strong, financially.

 

The USD is still (nominally) king and regarded as a safe haven but the amount of dollars recently created would have driven any other currency way down. A long way to go with this yet but I don't think any of the potential outcomes will be good. I don't expect the baht to drop much against other paper, whatever.

Ill use the 3 month chart USD/THB as an indicator of whats goin on...some pretty obvious price action.

[WalkingOrders]

4 hours ago, baansgr said:

Keep hearing it's a small part of the economy...yet apparently each of the 40 million tourists spend 5,000 baht a day...without tourism Thailand is nothing...it's rice exports have diminished as has the car industry......they don't really export or make anything else...

Anything in double digits isnt a small part...tie that to the rest of the mess.... the drought, reduced crop yields....it's gonna be tough times, not a baht crash, or total collapse some are saying but tough times. Not a time to bet on Baht rising.

[Skeptic7]

Based on the Almighty THB historical strength through all kinds of BAD, would have to say...NO. ☹️

[Leaver]

2 hours ago, Skeptic7 said:

Based on the Almighty THB historical strength through all kinds of BAD, would have to say...NO. ☹️

This "bad" is different, very different.

 

This "bad" will be longer and more severe than any other "bad" Thailand has experienced.  

 

With little to no assistance coming from government, things could even get a little "heated" here.  

[stament]

3 hours ago, WalkingOrders said:

Thailand has already said they anticipate some big borrowing soon, even if not, developing economies like this, with tourism wiped, durable goods orders halted, do not need a high baht.

 

Its moved from 29 to near 33 per USD, banks are calling it to go 36-37. That range in a couple months if not sooner, the recovery decides if it re-strengthens. I dont see it falling more then that. The THB was high in part to strong performing thai econ. Was already weakening before virus hit. Its not bad for Thailand if baht drops a bit more. 

Which banks are calling 36-37?

[Skeptic7]

2 hours ago, Leaver said:

This "bad" is different, very different.

 

This "bad" will be longer and more severe than any other "bad" Thailand has experienced.  

 

With little to no assistance coming from government, things could even get a little "heated" here.  

And sadly the almighty baht will somehow hold on and hold up. It wears a bulletproof coat of armor. 

[Leaver]

8 minutes ago, Skeptic7 said:

And sadly the almighty baht will somehow hold on and hold up. It wears a bulletproof coat of armor. 

Not this time. 

 

It's only early days, but after Thailand has sold its silverware, they will be going cap in hand.  

[Leaver]

23 hours ago, WalkingOrders said:

Anything in double digits isnt a small part...tie that to the rest of the mess.... the drought, reduced crop yields....it's gonna be tough times, not a baht crash, or total collapse some are saying but tough times. Not a time to bet on Baht rising.

Yes, Thailand had problems even before the virus.  

 

Good governance is hard to find in Thailand.  

[Chivas]

If anything its getting stronger frankly. It had weakened out to 33.10 couple weeks ago but stronger now at 32.54

With $225 Billion of foreign currency reserves the Baht is going nowhere

[steelepulse]

So if the government really does have 225 billion in foreign reserves, why are they asking the 20 wealthiest families to pay up?  I wonder why they are saying they can only pay 5000 baht one month?  

 

Seems 225 billion USD would cover a lot of 5000 baht payments for a few months.

[phkauf]

And today there is a story in the SCMP about a surge in property sales in HK from the Mainland Chinese. They are selling to bring cash back home to fund their businesses. Many are selling at large losses. 

Look for the same dynamic to play out in Thailand as many of the new condos sold recently were to Mainland buyers. Many were for investment purposes, rented out as an AirBnB type arrangement to Chinese tourists. That is effectively finished and the cost to carry is not insignificant. 

This should put more pressure on the baht as those sales will likely be converted to $ or Euros, but they will not leave it in Thailand or bring it back to China.

[SteveK]

21 minutes ago, steelepulse said:

So if the government really does have 225 billion in foreign reserves, why are they asking the 20 wealthiest families to pay up?  I wonder why they are saying they can only pay 5000 baht one month?  

 

Seems 225 billion USD would cover a lot of 5000 baht payments for a few months.

The Baht is so strong because of the huge reserves the country is supposed to have.

 

When someone goes to look and the money isn't where it's supposed to be, the Baht will be worth diddly-squat.

[Almer]

On 4/16/2020 at 5:29 PM, Kwasaki said:

I got my money over from UK in 2005 Sept @ 75 to £, so if my frozen pensions come into Thailand at that rate now,  Thailand would benefit from me. ????

Likewise

[EbhB]

On 4/17/2020 at 9:41 PM, observer90210 said:

Many things globally will crash..if not worse.

Currencies are part of the equation.

If one gets a pension in foreign exchange sent to Thailand, the crash may be good and yield more grub.

If one has bought property much before the crash, once it crashes, the property will highly loose value, on selling and sending back funds abroad.

Regulators could be tempted to create inflation, in order to balance and avoid foreign investments not to loose much...but the commoner will suffer....

And prices will hike for all imports due to the THB cra$h...so what one may gain in the THB cra$h, will be lost as greed will once again rule, all prices will hike...

 

What's the point here ? well, what one gains on one side, is unevitably lost on the other....so in this context, I may not dance and rejoice to much in global currency cra$hes....

Thats what gold is for, dealing with this type of chaos! ????

 

Its also REAL money here in a practical sense, super-easy to buy & sell - personally I'm around 40% in now and will probably buy more this week...

[Chivas]

Baht continues to strengthen up to 32.35 now

Beggars belief it really does

[Henryford]

14 hours ago, Chivas said:

Baht continues to strengthen up to 32.35 now

Beggars belief it really does

I am not surprised. Western currencies have fallen over recent years because of their massive money printing. That process will only accelerate now and strengthen the baht even more.