Baht Depreciation Could Have Widespread Implications

[webfact]

 

by Krajangwit Johjit

    

BANGKOK (NNT) - The central bank has indicated that the baht’s depreciation could impact manufacturing, commodity prices and inflation.

 

Sakkapop Panyanukul, senior director of the Bank of Thailand’s (BOT) Economic and Policy Department, said the baht has depreciated substantially during the months of March and April - dropping 2.5% in value since the start of 2022.

 

According to the senior director, global factors such as the war in Ukraine, China’s economic downturn, and expected adjustments to the U.S. central bank’s benchmark rate have been major contributors. He nevertheless said he believes the baht’s decline has remained consistent with the regional currency trends.

 

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Sakkapop also said the BOT will intervene to stabilize the baht if it experiences significant volatility or movements that contradict Thai economic fundamentals. He noted that such intervention would aim to ensure smooth business operations, as well as help facilitate the nation’s economic recovery. He also recommended that firms take precautions to better insulate themselves from issues related to fluctuating currency exchange rates.

 

The senior director noted that the local economy saw a downturn in March, as government spending and company investment both declined. For the month, the Private Consumption Index fell by 0.9% from February, while private investment slid 0.4% and the Industrial Production Index fell 0.9%. Similarly, government spending and investment decreased amid higher commodity and energy prices.

 

Exports, however, climbed 18.9% year-on-year, while overseas travelers increased by 210,000 over the previous month.

 

-- © Copyright NNT 2022-05-02

 

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[ThailandRyan]

4 minutes ago, webfact said:

Sakkapop also said the BOT will intervene to stabilize the baht if it experiences significant volatility or movements that contradict Thai economic fundamentals. He noted that such intervention would aim to ensure smooth business operations, as well as help facilitate the nation’s economic recovery.

Ergo, manipulation to help Thailands oligarchs....

[RichardColeman]

Please do something , the £ just hovering about 43 is nonsense for attracting tourism.

[ikke1959]

If you wnat tourists, make the attractive.... Thailand is getting too expensive

 

[KhunBENQ]

I like this Dollar centric view of the world ☹️

Baht depreciation while Euro is melting like ice in the heat of the war.

[timendres]

Baht Depreciation Could Have Widespread Implications

Like creating many very happy expats!

[timendres]

1 hour ago, webfact said:

Exports, however, climbed 18.9% year-on-year

With China locked down and nearing economic pandemonium, Thailand should embrace a weaker Baht, and do its best to lock in as much export business as possible.

[Guderian]

Well I can only say that if the Baht's depreciating due to government policy, then they're not doing a very good job of it as the pound is depreciating even faster!!!

 

Edited May 2, 2022 by Guderian

[mahtin]

1 hour ago, KhunBENQ said:

I like this Dollar centric view of the world ☹️

Baht depreciation while Euro is melting like ice in the heat of the war.

Right with you there.

Everyone's a patriot when it comes to their income currency.

[ozz1]

Surely they can see if the baht dropps lower it will be more attractive for tourism and exports but what am I thinking this government don't care about that

[Eric Loh]

15 minutes ago, ozz1 said:

Surely they can see if the baht dropps lower it will be more attractive for tourism and exports but what am I thinking this government don't care about that

Government also care about imported inflation especially higher energy and food costs. All currencies depreciated in tandem and level the playing field in terms of inbound tourists. 

[jacko45k]

3 hours ago, RichardColeman said:

Please do something , the £ just hovering about 43 is nonsense for attracting tourism.

Better ask those 'at home' to modify their policies... Sterling is weak!

[JAS21]

USD is strong against EUR, Yen

 

Rates in US are going up and faster, central bank there looking at 200bp move by September, no other country seems to be moving that fast to tackle inflation. Look at what Europe is saying, higher rates will not bring inflation down given half of it comes from energy prices which are not dependent on rates, gas/oil is high due to supply and sanctions 

 

Food for thought…

 

[Isaan sailor]

Beware of Friday afternoons.  BoT likes to intervene at that time. Kinda ruins your weekend—although when your retired—everyday seems like weekend.

[John Drake]

Weakening baht wonderful tonic for exporters. Same for attracting tourists. A financial shot in the arm. The only people it doesn't help are: CP and the 0.01 percent hisos who want to buy real estate in other countries and import high priced goods. So, the result? Got to shoot down the 99.9 percent for the ultra hisos.

[hotchilli]

4 hours ago, webfact said:

The central bank has indicated that the baht’s depreciation could impact manufacturing, commodity prices and inflation.

On the other hand it might help exports and tourism.

[John Drake]

4 hours ago, webfact said:

Sakkapop also said the BOT will intervene to stabilize the baht if it experiences significant volatility or movements that contradict Thai economic fundamentals.

And of course, this statement itself is intervening to prop up the baht. Don't think that it's just a coincidence that this jawboning occurred just a day before US Social Security payments are to be made to Thailand.

[John Drake]

3 minutes ago, hotchilli said:

On the other hand it might help exports and tourism.

What's effecting inflation is sending all that Thai food and fruit to China at the expense of the locals.

[bkk6060]

2 hours ago, ikke1959 said:

If you wnat tourists, make the attractive.... Thailand is getting too expensive

 

For who?

Related costs in the U.S. and several EU have almost doubled in the past 3 years   Thailand is still cheap, but if you think it is expensive now just wait.  Inflation will soon rear its ugly head then off to the higher cost races.

[jacko45k]

28 minutes ago, hotchilli said:

On the other hand it might help exports and tourism.

Might depend to which country... the USA yes......the THB is more expensive in say Korean Won (since Dec), and more expensive for Chinese Yuan too. 

Edited May 2, 2022 by jacko45k

[CharlieH]

Pass that Teflon spray will you, we need to apply another coat !

[sanuk711]

2 hours ago, Guderian said:

Well I can only say that if the Baht's depreciating due to government policy, then they're not doing a very good job of it as the pound is depreciating even faster!!!

Same story with other currencies Guderian--- up on the GBP--Oz $-- Euro.  They seem to be mixing up the fact that the USA$ is getting stronger against everything. I guess it sounds better for their readers if they say the Baht is collapsing............Some hopes

[thailand49]

Like history I hope I wouldn't see this message everytime without failure when the baht depreciates " intervention "  that means in a few days it will get stronger never fails! ????  

Wide spread implication of baht depreciation personally meant my evening out are more often and end more happy! ????

[Pmbkk]

1 hour ago, jacko45k said:

Better ask those 'at home' to modify their policies... Sterling is weak!

 

That's not just sterling - it's Boris...????

Edited May 2, 2022 by Pmbkk

[Iamfalang]

5 hours ago, webfact said:

The central bank has indicated that the baht’s depreciation could impact manufacturing, commodity prices and inflation.

appreciation also affects all these things, in different ways.

 

and stagnation affects things as well.

 

and the speed of the depreciation

 

and the length of the effect.

 

and relative to other countries

 

Gotta put things in perspective.  It's fine now, nothing to worry about.    Ask me again next month, and the month after, and the month after.....the world changes.   things change.  it's never exactly the same.  not exactly.

 

heard it here first:   Baht going to 50/1 USD

[Isaan sailor]

26 minutes ago, thailand49 said:

Like history I hope I wouldn't see this message everytime without failure when the baht depreciates " intervention "  that means in a few days it will get stronger never fails! ????  

Wide spread implication of baht depreciation personally meant my evening out are more often and end more happy! ????

Happy evenings, or happy endings?

[Bangkok Barry]

5 hours ago, RichardColeman said:

Please do something , the £ just hovering about 43 is nonsense for attracting tourism.

I transfer 600 quid over each month, and yesterday I got 1000 baht less than I did in February. Strange kind of Baht depreciation.

[thaivisareader]

bahts been manipulated and propped up way too long. should be in the £70/$40 range. Reason? baht not backed up by anything. Exports/tourism/manufacturing- way down. unpopular stagnant dictatorship doesn't help.

[ChaiyaTH]

17 minutes ago, 2009 said:

7eleven mineral water up 50%

I thought I was getting crazy myself already, maybe I still did, but I was quite shocked to nearly have to pay 80 baht when I did a quick 500ml water bottle pack from 7-11 a week ago. Not to mention water companies here cutting people off for just being behind 200-300 baht and ignoring human universal rights.

Anyway, the people are gonna feel this stuff hardcore later on this year. To even talk with the 500 baht minimum wage is quite silly as what was 350 baht just 4-5 years ago, is 750 baht today already. A minimum wage upgrade wouldn't benefit them anymore, just keep them afloat only.

 

Soon airplane fares really make a price hike too, doubt there will be many tourists, people in Europe lose their holiday money on the recent energy increase alone already (no joke).

 

To then having to pay 200 baht single way rides in Phuket, 150 baht for beers, Vietnam seems the only real budget deal left aside of a few days in Laos or Cambodia.

Edited May 2, 2022 by ChaiyaTH

[ChaiyaTH]

6 minutes ago, 2009 said:

One of my favourite bars just put the price of draught Tiger up to 125 from 100.

 

Might as well live in Europe at these prices.

Well yeah that is for sure, bottles of wine there cost me 4-5 euro each while a lower quality here is 150-300 a glass. But to be honest at least Vietnam is still fair on that end hehe, you can get 10 beers for less than 200 baht there. Together with the best cheese and meat.

To me it is also the overall costs though, initially things came out better here for me in terms of taxes and the like but if I factor in my visa costs, health insurance costs and the cost of a decent school for just 1 kid, I would essentially not pay any tax back home already.

 

The only reason I haven't left yet, is because aside of the crazy pricing and politics here, the people are quite laid back and chill, unlike to large parts of the west nowadays. But same time, it is almost better to live in a smaller town in Spain and enjoy the good decent life.

 

It seems that it doesn't really matter anymore where you live in the world, more about which things one is ready to give up and which things you do not, anywhere life easily costs 3000 dollars a month.

Edited May 2, 2022 by ChaiyaTH