Bank of Thailand Intervenes to Manage Baht's Exchange Rate

[webfact]

FILE photo courtesy: National News Bureau of Thailand

 

The Bank of Thailand has confirmed its active intervention to manage the value of the baht against the US dollar, aiming to ensure the currency’s fluctuations are in sync with regional currencies.

 

On Monday, Chayawadee Chai-anant, the central bank's assistant governor for corporate relations, announced that the bank has recently taken measures to regulate the baht's exchange rate. "Our intervention intends to align with regional currency movements, ensuring stability," she stated.

 

The central bank's international reserves have benefitted from both these interventions and the depreciation of the dollar. Gross international reserves climbed to $235.6 billion in August, up from $230.6 billion in July and $224 billion in June. Similarly, net international reserves rose to $262 billion in August, compared to $258 billion in July and $252.6 billion in June.

 

Ms. Chayawadee pointed out that while the baht’s appreciation against the dollar positions it as one of the leading regional currencies, it remains behind the Malaysian ringgit. She acknowledged the rapid strengthening of the baht and assured that the central bank is closely monitoring its movements to mitigate any negative impact on the economy.

 

The adjustment in the baht's value has mixed implications for local businesses. A stronger baht could reduce export revenues due to foreign exchange conversions, particularly for those lacking effective hedging strategies.

However, Ms. Chayawadee emphasized that the stronger baht is unlikely to impact the tourism sector adversely in the final quarter of this year. "International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand," she said. Key visitor markets, including China, Malaysia, and Japan, have also seen their currencies appreciate relative to the dollar, supporting this optimistic outlook.

 

The central bank reported that foreign tourist numbers in August reached 3 million, after seasonal adjustments, marking a slight decline of 0.1% from the previous month. Despite this, tourist spending has remained steady. The bank anticipates an improvement in foreign traveler numbers in September compared to August, reported Bangkok Post.

 

Economic data shows a mixed picture: while visitors from China and Malaysia decreased in August, there was an uptick in tourists from countries like Japan and India. As per the central bank, tourism revenue remained stable, primarily due to higher spending per trip.

 

Adding to this, the Kasikorn Research Center noted that the baht strengthened to 32.17 baht per dollar during Monday's trading, hitting its highest level in 31 months. The central bank continues to monitor these trends closely to maintain economic stability.

 

-- 2024-10-02

 

[johng]

Tourists appreciate getting less for their holiday money with a firmer Baht as it helps them spend less 5555

[Gottfrid]

34 minutes ago, webfact said:

However, Ms. Chayawadee emphasized that the stronger baht is unlikely to impact the tourism sector adversely in the final quarter of this year. "International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand," she said.

Sure they do. A tourist always want to pay as much as possible for hotel, food and drinks as well as activities. That´s a well know fact, right? Let´s just sum it up with, that Ms. Chayawadee, did not get her job based only on her amazing qualification in the area of assigned work. 🤣

[smedly]

35 minutes ago, webfact said:

International tourists generally welcome a firmer baht

are you kidding, this is most absurd statement i have heard, the suddend strength of the baht is hurting almost every sector - excluding imports, it is madness

[chiang mai]

1 minute ago, smedly said:

are you kidding, this is most absurd statement i have heard, the suddend strength of the baht is hurting almost every sector - excluding imports, it is madness

I think you mean exports, imports become much cheaper as the Baht gets stronger.

[ozz1]

Probably a little too late for tourists planning their holidays here Vietnam is loving this

[Karma80]

Bali and Japan send their thanks to the assistant governor for the additional tourists. The impact on the already oversupplied and crumbling property market will be interesting. I can't see anyone with sense dropping THB on overpriced stock with the added pressure. Most people visting or buying in Thailand do not operate from a USD base, so are exposed to a 10% upward price shift on everything.

 

[KhunLA]

So she thinks everyone loves paying more for their holiday ... 

 

,,, "However, Ms. Chayawadee emphasized that the stronger baht is unlikely to impact the tourism sector adversely in the final quarter of this year. "International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand," she said."

[chiang mai]

6 minutes ago, KhunLA said:

So she thinks everyone loves paying more for their holiday ... 

 

,,, "However, Ms. Chayawadee emphasized that the stronger baht is unlikely to impact the tourism sector adversely in the final quarter of this year. "International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand," she said."

Firmer doesn't necessarily mean weaker or stronger.

[KhunLA]

7 minutes ago, chiang mai said:

Firmer doesn't necessarily mean weaker or stronger.

Means weaker when you get less for your baht.   Firmer sure doesn't mean stable, as it continues to fluctuate.  Only this week has it held sort of steady.

 

Add inflation & 10-15% exchange rate to you holiday spending ... NO THANKS.   That's after you get here, and after the airline's fare hikes, and silly fees for added luggage, meals, seat assignment, as taking all the perks away, so I read.   if they had their way, Int'l flights would be carry on only also 

 

Time for people to explore and holiday locally.

Edited Wednesday at 01:26 AM by KhunLA

[chiang mai]

1 minute ago, KhunLA said:

Means weaker when you get less for your baht.   Firmer sure doesn't mean stable, as it continues to fluctuate.  Only this week has it held sort of steady.

 

Add inflation & 10-15% exchange rate to you holiday spending ... NO THANKS.   That's after you get here, and after the airlines fare hikes, and silly fees for added luggage, as taking all the perks away, so I read.   if they had their way, Int'l flights would be carry on only also 

Firmer doesn't mean weaker, firmer means stable and unlikely to change.

[KhunLA]

1 minute ago, chiang mai said:

Firmer doesn't mean weaker, firmer means stable and unlikely to change.

Still waiting ... 

 

Well, not me, but if I was playing tourist, I'd look elsewhere to holiday.

[chiang mai]

1 minute ago, KhunLA said:

Still waiting ... 

 

Well, not me, but if I was playing tourist, I'd look elsewhere to holiday.

I think the point here is that 37 baht per USD was extraordinary and well above the average. An exchange rate of 32 or 33 is more in keeping with long term averages and that's broadly where we are. If tourists or expats were banking on 37 over the longer term, they are as misguided as the Brits who expected that 80, 70 or 60 Baht per Pound would continue to be the norm. The fact is the USD is under massive debt pressure whilst GBP has been weakening for decades. THB is an emerging market currency, now a developing nation currency, that has the potential to grow much stronger over time, which is why BOT spends all it's money trying to weaken it, not make it stronger. 

[smedly]

49 minutes ago, chiang mai said:

I think you mean exports, imports become much cheaper as the Baht gets stronger.

read my post again

[Presnock]

50 minutes ago, Gottfrid said:

Sure they do. A tourist always want to pay as much as possible for hotel, food and drinks as well as activities. That´s a well know fact, right? Let´s just sum it up with, that Ms. Chayawadee, did not get her job based only on her amazing qualification in the area of assigned work. 🤣

Yes, how did she get that position?  I would think that with several different PM's fighting her about the interest rate and the economy just about going over the cliff with more local flooding daily impacting businesses, she would relent except, then I remember TIT and no logic is ever included in any action here.

[handymax]

They got it all wrong....this is not about a strong baht or any other currency....it is all about a weak dollar.

[chiang mai]

1 minute ago, smedly said:

read my post again

Apologies, I'm off to Specsavers immediately. 🙂

[Gottfrid]

18 minutes ago, handymax said:

They got it all wrong....this is not about a strong baht or any other currency....it is all about a weak dollar.

Which as a result make the Baht and some other Asian currencies look stronger. In other words, the result is the same, but the protective and proactive measures might be up for discussion.

[JonnyF]

1 hour ago, webfact said:

"International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand," she said.

 

Did she really say that? 

 

Surely it's a misquote? 😃

[KannikaP]

1 hour ago, chiang mai said:

I think you mean exports, imports become much cheaper as the Baht gets stronger.

So will the price of Wine, Guinness and Volkswagens go down?

[chiang mai]

2 minutes ago, KannikaP said:

So will the price of Wine, Guinness and Volkswagens go down?

Doubtful, if the strengthening holds indefinitely they might but forecasts are it wont.

[ravip]

So... how does this workout? Or how should it be? Or how is the stage set?

 

Are there any special, selected countries whose currencies should appreciate eternally, and the rest just keep devaluing their money until bankruptcy?

 

Would be great to get some unbiased financial advice from a real expert.

[chiang mai]

2 minutes ago, ravip said:

So... how does this workout? Or how should it be? Or how is the stage set?

 

Are there any special, selected countries whose currencies should appreciate eternally, and the rest just keep devaluing their money until bankruptcy?

 

Would be great to get some unbiased financial advice from a real expert.

Why don't you go find some and post it?

[ravip]

Just now, chiang mai said:

Why don't you go find some and post it?

Just finding an expert here

[nausea]

I expect, and factor in, a gradual reduction of sterling's buying power v. the baht, as the UK continues its slow inevitable decline, and I'll be long gone by the time this has a real material effect on me personally, a sudden collapse in sterling would be a problem though.

[chiang mai]

1 minute ago, ravip said:

Just finding an expert here

You don't go to a social network forum expecting to read expert financial or economics advice, you come hear to read opinions. If you want expert advice, you're altogether in the wrong place. Try Bloomberg as a start and see where that takes you.

[Kerryd]

When a different story was posted yesterday I went to the WISE site to see what I would get if I transferred a sum of money to Thailand.

I noticed my last transfer was 2 weeks shy of 1 year ago. However, if I had transferred the same amount now that I did a year ago, I would receive 27,000 baht LESS than last year.

Most (real) tourists do not scan exchange rates daily/hourly and plan their trips based on if the currency in the destination country has strengthened or weakened over the course of the previous couple of weeks.

Most (real) tourists have little or NO idea what the exchange rates really are until the day they travel and see the rates at the airport.

They have NO clue if the currency in the destination country is "firmer" than it was months ago. Or that they could have gotten a few hundred more baht if they'd travelled 3 months ago.

It's mainly BIG businesses and Stock Market related businesses that pay such close attention to the rates as they deal in 10s-1,000s of millions in transactions daily. 

If Toyota made ฿500 mil in exports this time last year and only got ฿450 mil this year for the same volume of sales, it would be a significant loss. 

(By my rough calculations based on the WISE exchange rates of today vs 15 Oct 2023, the baht is about 10.81% stronger now than at this time last year.)

But for Yon Wang from Guangzhou who is getting 4,641 baht for his 1,000 Cny (Chinese Renminbi) instead of 5,142 he would have gotten last year, it probably isn't going to make a difference because he probably wouldn't have a clue that the baht was weaker a year ago and would have no idea of how much less he will get this year.

All he knows is, he was 1,000 Cny to spend on his vacation and when that is done, he goes home. End of story.

[lordgrinz]

3 hours ago, webfact said:

The central bank's international reserves have benefitted from both these interventions and the depreciation of the dollar.

 

The entire article doesn't state what "both these interventions" are, so what are these "interventions"? 

[TheAppletons]

9 minutes ago, Kerryd said:

But for Yon Wang from Guangzhou who is getting 4,641 baht for his 1,000 Cny (Chinese Renminbi) instead of 5,142 he would have gotten last year, it probably isn't going to make a difference because he probably wouldn't have a clue that the baht was weaker a year ago and would have no idea of how much less he will get this year.

All he knows is, he was 1,000 Cny to spend on his vacation and when that is done, he goes home. End of story.

 

  Yon Wang and his cousin, Long Duc Dong.

[OJAS]

3 hours ago, webfact said:

"International tourists generally welcome a firmer baht against the dollar, which helps them better manage their spending in Thailand,"

 

As does the super-inflated ego of Ms Chayawadee's boss, the BOT Governor, who seems overwhelmed at the present time by an uncontrollable urge to afford the very highest of tip-top priorities to bragging to his Western counterparts in particular just how much more successful he is than they are in maintaining the value of the currency for which he is responsible just as high as is humanly possible! 🤑