Financial crisis to silent crisis: 24 years after the baht’s freefall

[snoop1130]

This file photo dated 05 September, 1997 shows exchange rates at the Bangkok Bank. (Photo by GARY WAY / AFP)

 

Thailand’s currency collapsed on July 2, 1997, as market speculation forced the country to abandon its fixed exchange rate and the central bank depleted its coffers to protect the baht.

 

The baht plummeted from Bt25 per US dollar to around Bt50 before eventually recovering to the Bt30-Bt32 level we see now.

 

The baht debacle came as a shock to many, as the Finance Ministry and Bank of Thailand had been insisting that the currency would never be devalued. On the back of these assurances, companies kept borrowing in US dollars while lending in baht because of the perceived interest-rate arbitrage.

 

Full Story: https://www.thaipbsworld.com/financial-crisis-to-silent-crisis-24-years-after-the-bahts-freefall/

 

-- © Copyright Thai PBS 2021-07-02

 

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[RotBenz8888]

39 minutes ago, snoop1130 said:

Thailand had been insisting that the currency would never be devalued

Sounds familiar.... 

[Pottinger]

I remember it well. I lost my job as the financial sector collapsed and consolidated, sending me spinning off first to South Korea then to Vietnam. It seemed at the time that the currency devaluations were following me around Asia - as soon as I arrived somewhere and changed some money, the value halved. Later in the same year, 1997, I was back in Thailand briefly, relatively impoverished and unable to take much advantage as the Baht for a couple of days traded at over ninety to the Pound. Would that I had been prescient, with pockets stuffed with USD or £!

 

 

[Surelynot]

Remember it well.....money to burn.

[tonray]

1 hour ago, snoop1130 said:

This file photo dated 05 September, 1997 shows exchange rates at the Bangkok Bank. (Photo by GARY WAY / AFP)

Wrong pic...shows interest rates on savings accts not xchange rates

[Denim]

1 hour ago, snoop1130 said:

This file photo dated 05 September, 1997 shows exchange rates at the Bangkok Bank.

 

Nope. Try again.

[kynikoi]

Was good times for me but I remember middle class families selling bbq on the street. They were rather disconsolate.

 

No idea how or why the baht is where it is except no one really wants it so it doesn't move. Bring in Soros and Thailand is done.

[sanuk711]

7 minutes ago, kynikoi said:

No idea how or why the baht is where it is except no one really wants it so it doesn't move. Bring in Soros and Thailand is done.

That seems to be --back to front Kynikoi---if no one wanted it, it would sink---its not 1997...its not fixed,  people (like Soros etc) are talking about it being one of the leading markets.

 

China Lags as Thailand, Russia Rank Top Emerging Market Picks

Thailand and Russia are well placed to be among the emerging-market standouts that could beat expectations next year.That’s according to a Bloomberg study of 17 developing markets gauging their outlook for 2021 based on 11 indicators of economic and financial performance. Thailand topped the list, owing to its solid reserves and high potential for portfolio inflows, while Russia scored No. 2 thanks to robust external accounts and a strong fiscal profile, in addition to an undervalued ruble. China scores fairly poorly given that high expectations are  already baked in, while Brazil is a laggard due to a mounting fiscal deficit and debt concerns.

[rumak]

9 minutes ago, sanuk711 said:

That seems to be --back to front Kynikoi---if no one wanted it, it would sink---its not 1997...its not fixed,  people (like Soros etc) are talking about it being one of the leading markets.

 

China Lags as Thailand, Russia Rank Top Emerging Market Picks

Thailand and Russia are well placed to be among the emerging-market standouts that could beat expectations next year.That’s according to a Bloomberg study of 17 developing markets gauging their outlook for 2021 based on 11 indicators of economic and financial performance. Thailand topped the list, owing to its solid reserves and high potential for portfolio inflows, while Russia scored No. 2 thanks to robust external accounts and a strong fiscal profile, in addition to an undervalued ruble. China scores fairly poorly given that high expectations are  already baked in, while Brazil is a laggard due to a mounting fiscal deficit and debt concerns.

 

Usually the way to look at these stories is to believe the complete opposite of what they say.

 

example :   " simon says bitcoin to hit 2 million "      interpretation:   SELL !

[NicholasTH]

I would be happy with 17 years ago exchange rate .. 75B / £1

Edited July 2, 2021 by NicholasTH

[dinsdale]

Just now, NicholasTH said:

I would be happy with 17 years ago exchange rate .. 72B / £1

Around Bt32/33 to Aus$.

[sanuk711]

4 minutes ago, rumak said:

Usually the way to look at these stories is to believe the complete opposite of what they say.

I would ignore all top financial advice rumak, and listen to the doom Sayers on ThaiVisa----if it wasn't for the fact that in the 22 years of living here, they haven't changed their mantra---- "Thailand -Its doomed--finished -Kaput-etc etc"

[NicholasTH]

2 minutes ago, dinsdale said:

Around Bt32/33 to Aus$.

Yup I was just doing some maths with being back in the UK for 2 years now and fail out my chair?  when I was looking at the exchange rate the other week .. 

 

Thailand doesn't seem very suitable for my retirement plans honestly ..

[The Cipher]

11 minutes ago, sanuk711 said:

if it wasn't for the fact that in the 22 years of living here

 

Have they been like this for 22 years?! There's surely some sort of lesson in there...

[sanuk711]

Just now, The Cipher said:

Have they been like this for 22 years?! There's surely some sort of lesson in there...

Yer---I guess so Cipher....Maybe its,  " Patience"  If you say it long enough it will happen..........????????

[kynikoi]

50 minutes ago, sanuk711 said:

That seems to be --back to front Kynikoi---if no one wanted it, it would sink---its not 1997...its not fixed,  people (like Soros etc) are talking about it being one of the leading markets.

 

China Lags as Thailand, Russia Rank Top Emerging Market Picks

Thailand and Russia are well placed to be among the emerging-market standouts that could beat expectations next year.That’s according to a Bloomberg study of 17 developing markets gauging their outlook for 2021 based on 11 indicators of economic and financial performance. Thailand topped the list, owing to its solid reserves and high potential for portfolio inflows, while Russia scored No. 2 thanks to robust external accounts and a strong fiscal profile, in addition to an undervalued ruble. China scores fairly poorly given that high expectations are  already baked in, while Brazil is a laggard due to a mounting fiscal deficit and debt concerns.

 

It just sits alone in the corner. Unwanted, unloved and untraded. Thai baht has never been considered even major currency within East Asia.

 

The Bloomberg tripe is pure hopium. The economy is in the toilet and it's not coming back. Thailand definitely has reserves that's the real reason it remains strong. But as western currencies inflate and Thai government is forced to borrow...Thai consumer is done.

 

Thai billionaire sending money out of Thailand. Think it was over 17B last year

Edited July 2, 2021 by kynikoi

[rumak]

27 minutes ago, sanuk711 said:

I would ignore all top financial advice rumak, and listen to the doom Sayers on ThaiVisa----if it wasn't for the fact that in the 22 years of living here, they haven't changed their mantra---- "Thailand -Its doomed--finished -Kaput-etc etc"

 

well,  what do you think ?    just your opinion, of course.    Will the baht take a slow, steady path downward.      a quick drop like in 1997.     or just basically keep in the range its been for the last ten years.

you can even give your reasons  ,   if ya like

 

FYI:   I have had my money parked here for 22 years

Edited July 2, 2021 by rumak

[JomtienRay]

1 hour ago, dinsdale said:

Around Bt32/33 to Aus$.

I purchased my condo off the plan when the Baht was 35/$AUD..

Living happily there now..

Wish the 35 would return.. 

Ahaha ????

[BritManToo]

15 hours ago, NicholasTH said:

I would be happy with 17 years ago exchange rate .. 75B / £1

I'm OK with 44bht/gbp.

[BritManToo]

15 hours ago, The Cipher said:

 

Have they been like this for 22 years?! There's surely some sort of lesson in there...

If you came here when it was 90 to the pound, you're probably dissatisfied.

I came here when it was 50 to the pound, and I'm OK with the current exchange rates (44).

 

Is Thailand doomed?

I think probably everywhere is doomed with COVID the current madness.

Edited July 2, 2021 by BritManToo

[smedly]

what stands out in that report is the level of public debt and the admission that they don't meet international standards when reporting it, in layman speak that means to me that they are hiding stuff. 

 

 

He pointed out, for instance, that reporting of public debt in Thailand does not fully meet international standards, resulting in figures lower than the reality.

 

 

another issue that stands out is this, they should be investing at home

 

The biggest problem is a drop in investment relative to savings. Before the crisis, Thailand was a debtor country due to low savings, but relatively high investment. Now, Thailand has less investment but larger savings, much of which it exports abroad.

[gk10012001]

8 hours ago, NicholasTH said:

I would be happy with 17 years ago exchange rate .. 75B / £1

My first trip was 2004.  I thought the 40 baht to 1 USD was pretty good

[Benmart]

12 hours ago, sanuk711 said:

I would ignore all top financial advice rumak, and listen to the doom Sayers on ThaiVisa----if it wasn't for the fact that in the 22 years of living here, they haven't changed their mantra---- "Thailand -Its doomed--finished -Kaput-etc etc"

I bypass the doomsday sayers. I need only look around to see that many businesses are indeed finished, kaput and closed.

[hotchilli]

14 hours ago, NicholasTH said:

I would be happy with 17 years ago exchange rate .. 75B / £1

I think it was early  2000/2002 I came over and got 65B to the English Pound.

[Enzian]

When the Thai government effectively forced the US embassy to cease issuing affidavits of financial sufficiency, I brought over an amount of US dollars worth well over 800,000 baht and put it in a Foreign Currency Deposit account, to meet Immigration requirements for the Non-O. Since then I've had times I thought I'd made a mistake not putting it all in baht, but for the present it seems to have been a prudent move. One cannot time markets generally, but sometimes some things are obvious. If the baht goes over 35/dollar, it might make sense to convert the dollars, but that assumes I have a future in this country-yet to be seen.

[worgeordie]

Before the crash ,my neighbour who had a good business ,in Chiang Mai

and down South, borrowed 1 millon $ , not to put in the business to expand

it, but the major shareholders shared it among themselves and bought new

cars, and invested into stock exchange. then the bubble burst and everything

went tits up , the company has gone, they had to sell the factories and land.

 

regards Worgeordie

 

[Misterwhisper]

17 hours ago, snoop1130 said:

The baht plummeted from Bt25 per US dollar to around Bt50 before eventually recovering to the Bt30-Bt32 level we see now.

Yes, "eventually"

 

I distinctly recall that it stood at 45 - 46 for a couple of years before recovering to 36 - 38, a level where it remained for at least half a decade. It then climbed further, staying at around 33 for a few years hence.

 

So all in all, that "eventual" level of 30 - 32 took more than a decade to attain..

Edited July 3, 2021 by Misterwhisper

[sanuk711]

2 hours ago, Benmart said:

I need only look around to see that many businesses are indeed finished, kaput and closed.

Are you looking businesses in America-? Are you looking businesses in the UK-? Are you looking businesses in Oz-? are they about to collapse..... No, Just Thailand, its Kuput--closed -finished-gone..........????Told you so......:)

[1FinickyOne]

15 hours ago, rumak said:

" simon says bitcoin to hit 2 million "      interpretation:   SELL !

We should all start are own imaginary crypto currency... you can't see it, find it anywhere, and not easy to spend... 

 

Mine will be called...

 

I can't believe it's not money.. 

[1FinickyOne]

8 minutes ago, Misterwhisper said:

Yes, "eventually"

 

I distinctly recall that it stood at 45 - 46 for a couple of years before recovering to 36 - 38, a level where it remained for at least half a decade. It then climbed further, staying at around 33 for a few years hence.

 

So all in all, that "eventual" level of 30 - 32 took more than a decade to attain..

The level is not nearly as important as how much buying power you have for that baht...