The Thai baht, after experiencing a nearly 4% loss compared to the US dollar, is on track for its poorest January performance since 2020. The currency’s downfall signals further challenges ahead, given the significant outflows.

 

Emerging Asia’s top-performing currency in the fourth quarter turned into this year’s biggest loser as global funds avoid Thai assets. This comes amid a dispute between the government and the central bank concerning the means of reviving the struggling economy.

 

Julapun Amornvivat, the Deputy Finance Minister, voiced concerns last week about the 10-year high borrowing costs hindering economic recovery. This followed the Bank of Thailand’s resistance to calls for a rate cut, arguing that reducing borrowing costs would not address the economy’s structural issues.

 

Alvin Tan, the head of Asia FX strategy at RBC Capital Markets in Singapore, predicted that the baht would continue to suffer due to the increasing political backlash against its current policy rates. He anticipates the dollar-baht to fluctuate between 36.0 and 36.50 in the following weeks after it closed at 35.63 last week.

 

by Alex Morgan

PHOTO: via China Daily

 

Full story: The Thaiger 2024-01-29

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

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canadian loonie is still far from the 31bht to a dollar between 2003-2008

i really hope the thai bht gets back to where it oughta be... for me at least...

Why poorest January, looks for me great.

A sliding baht should make trading easier for some industries and companies.

15 minutes ago, hotchilli said:

A sliding baht should make trading easier for some industries and companies.

Logically, you would think that should be so but it isn't. Studies have shown that it's not the strength or weakness of the selling country's currency that's important, the strength of the buying country's economy is. If the potential buyers economy is in the doldrums and they can't sell their products, they don't import products to make them in the first place, no matter how cheap they may be

This is where resident expats help the nation with transfer of their higher value currencies into Thailand that will promote higher consumer spending - a major factor in GDP rate.

21 minutes ago, Srikcir said:

This is where resident expats help the nation with transfer of their higher value currencies into Thailand that will promote higher consumer spending - a major factor in GDP rate.

I agree. But International Tourism does that more effectively because there are 24 million international tourists and only 400,000 expatriates. As you quite rightly say, it's the improvement of consumer spending at the grass roots level that's important to GDP, rather than anything to do with the foreign currency tourists exchange. 

May the Baht go down like Linda Lovelace

 

it's got quite a ways to go ... any ฿3 / $1 USD

21 hours ago, webfact said:

Alvin Tan, the head of Asia FX strategy at RBC Capital Markets in Singapore, predicted that the baht would continue to suffer due to the increasing political backlash against its current policy rates. He anticipates the dollar-baht to fluctuate between 36.0 and 36.50 in the following weeks after it closed at 35.63 last week.

 

Since a similar report from Kasikorn last week, BOT is obviously supporting the baht, because since that day the baht has significantly strengthened against the US$, while the US$ hasn't had a significant weakening on the world market in the same period

9 minutes ago, BenStark said:

 

Since a similar report from Kasikorn last week, BOT is obviously supporting the baht, because since that day the baht has significantly strengthened against the US$, while the US$ hasn't had a significant weakening on the world market in the same period

All foreign currency exchange rates involving THB are cross rates that are derived via USD, only USD has a direct relationship with THB. That means it is entirely possible for the Baht to strengthen against USD and fall against the other majors. The following will help you better understand:

 

 

6 minutes ago, Mike Lister said:

All foreign currency exchange rates involving THB are cross rates that are derived via USD, only USD has a direct relationship with THB. That means it is entirely possible for the Baht to strengthen against USD and fall against the other majors. The following will help you better understand:

 

 

 

 

Not sure what that has to do with my observation, but no problem, you are the financial expert. Not?

45 minutes ago, BenStark said:

 

 

Not sure what that has to do with my observation, but no problem, you are the financial expert. Not?

I posted that link to help put to rest some of the unsubstantiated theories surrounding the THB exchange rate, there's a lot of useful and interesting information in the link that many are unaware of.

I see sign of recovery by removing visa fees🤔

A post flaming a moderator and two replies have been removed.

1 hour ago, Mike Lister said:

I posted that link to help put to rest some of the unsubstantiated theories surrounding the THB exchange rate, there's a lot of useful and interesting information in the link that many are unaware of.

 

I'm not involved or knowledgeable about all the currency wiggle waggle. All I know is that a little over a year or so ago Prawit complained about the baht being too weak and asserted it needed to exchange at around 35. The baht promptly went lower. Now, what seems to be yet more complaining about a strong dollar and presto! the dollar sinks like a rusty tub the past couple of days. I'll not call it a conspiracy. But I do think it's a really strange coincidence, coming as it does when a lot of American Social Security transfers are scheduled in the next couple of days.

2 minutes ago, John Drake said:

 

I'm not involved or knowledgeable about all the currency wiggle waggle. All I know is that a little over a year or so ago Prawit complained about the baht being too weak and asserted it needed to exchange at around 35. The baht promptly went lower. Now, what seems to be yet more complaining about a strong dollar and presto! the dollar sinks like a rusty tub the past couple of days. I'll not call it a conspiracy. But I do think it's a really strange coincidence, coming as it does when a lot of American Social Security transfers are scheduled in the next couple of days.

 

You don't have to be a financial expert, or at least don't pretend to be one, to know that every national bank in the world will support their currency by either buying or selling foreign currency, if they deem the exchange rate goes beyond a point they have set as appropriate.

1 hour ago, John Drake said:

 

I'm not involved or knowledgeable about all the currency wiggle waggle. All I know is that a little over a year or so ago Prawit complained about the baht being too weak and asserted it needed to exchange at around 35. The baht promptly went lower. Now, what seems to be yet more complaining about a strong dollar and presto! the dollar sinks like a rusty tub the past couple of days. I'll not call it a conspiracy. But I do think it's a really strange coincidence, coming as it does when a lot of American Social Security transfers are scheduled in the next couple of days.

Almost certainly that was a coincidence. The truly interesting part about this obsession by some people that the Baht is manipulated, is that most think the government is always trying to make it stronger. The reality has always been that any money BOT spends in currency intervention is aimed almost exclusively at weakening the Baht! THB was pegged to USD for the longest time at 25, after the 97 crash it floated to over 45, ever since it's been trying to return to 25, without anyone needing to do much at all. The optimum range for USD/THB is between around 31 to 33, outside of that range either imports or exports values get stressed. Unfortunately, THB is dependent on USD so much of the exchange rate is beyond the control of the Thai economy.