Bank of Thailand Intervenes to Manage Baht's Exchange Rate

[Gottfrid]

12 minutes ago, HalAndLois said:

I had to read this twice.  What she's saying is that other Asian currencies are appreciating against the dollar just as the baht is.  I mean, she's a pin head, because all this means is that the other currencies are holding their own, but apparently she's implying that this won't affect those wonderful Chinese tourists and those nonexistent Japanese tourists because their currencies are holding steady.  Of course, it will mean fewer freespending Americans, but as I said she's a pin head.  

Yes, she truly is not connected.

Take baht against JPY. The 5th of August 1 baht cost 4,06 yen. Yesterday 4,41 yen for 1 baht.

Let´s look at china: April 30 1 yuan gave 5,13 baht. Yesterday it gave only 4,63.

A normal value of the baht to dollar would be about 34

Edited October 2 by Gottfrid

[thailand49]

The Art of War!

If they say it is ok, then it is not.

If they say watching it they are in process of malipulation.

If they say in line with other currency it isnt.

[hotchilli]

4 hours 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."

This is what happens with too much in-breeding.

[Jerry777]

5 hours ago, webfact said:

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,"

'What'? Tourists enjoy spending more money? Get a life.

[Presnock]

4 hours 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.

dollar we knowis weaker - they just dropped the interest rate by 50 points and thus other banks either lower their interest rate or their currenciy i therefore stronger due to the dropping of the dollar interest rate.  

[Ben Zioner]

5 hours 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. 🤣

I guess she hates selling off foreign currency reserves to prop up the baht.. So she will just say anything to justify a lack of effective action.

 

Or, maybe these foreign currency reserves are more limited than what we thought.

Edited October 2 by Ben Zioner

[RayOday]

Come on! You can't expect these esteemed officials from diverting their glance from their phones except to smile for a group photo. 

The chart for the $ looks like the yuan. Nice job for Thailand.

[Espanol]

 

I don't know where they got the headline from, but after reading the article, it says exactly the opposite: that the BOT is not doing anything to lower the baht because they don't consider it a problem.

[fulhamster]

4 hours 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.

Ok the dollar is weak, the GBP is up against it, the Baht lower.

So assuming they have changed by roughly the same percentage rate, how is the Baht still getting stronger vs the GBP ?

[Espanol]

Hace 2 minutos, fulhamster dijo:

Ok the dollar is weak, the GBP is up against it, the Baht lower.

So assuming they have changed by roughly the same percentage rate, how is the Baht still getting stronger vs the GBP ?

 

And euro, yen, yuan,...

 

 

Edited October 2 by Espanol

[Luka77]

I withdrew 10k baht and the fee was 220 baht for atm service plus 5.5% conversions fee… $27 fking dollars fee to take out money, ridiculous 

[TroubleandGrumpy]

Funny - I recall arguing with a bunch of people on here only a little while ago - they all claimed the higher Baht was all and only because of the USD drop. As I said then, the Junta/Thai Govt/Elite have been manipulating the Baht since 2014/15 to make it artificially high. They are doing that for many reasons - paying off loans, costs of imports, costs of military equipment, investing overseas, etc etc etc.  They do not give a rat's rear that it make rice and other exports cost more, nor that tourists have to pay extra.

 

There are many ways Central Banks can 'manage' their currency - interest rates and buying/selling currency reserves are just two of the ways they can do it. As the lady said - they underestimated how quickly and how far their 'interventions' would make the Baht increase.   Expect a major lowering soon - it takes time for their actions to take effect and with a bit of luck they will 'overdo' it again.

 

And for those who claimed that USA and IMF are monitoring countries to stop them manipulating their currency, that is rubbish., They monitor those that are artificially lowering their currency rate to make their own Exports cost less, and their  Manufacturing/Investments costs less for overseas investors (and for Tourism). 

[Elkski]

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

 

TIT

[TroubleandGrumpy]

4 minutes ago, Luka77 said:

I withdrew 10k baht and the fee was 220 baht for atm service plus 5.5% conversions fee… $27 fking dollars fee to take out money, ridiculous 

The banking industry in Thailand is owned by the elite (lock, stock and barrel) and they dont give a rat's rear about 'the people'. Unlike western banks that have all to some degree undergone restructuring and controls to provide better services for a far more reasonable price, here they can and do charge whatever they like.  It is like the petrol industry, and most others,  petrol prices are the same at most stations - it is as if they somehow know what each other is pricing the fuels at on any day 🙂 

 

[shackleton]

I am sure the quality Tourists Thailand wants don't mind paying a bit extra for their holiday here in Thailand 

Living in the good hotels restaurants ect 

The only ones complaining will be the expats on getting a lower exchange rate on their money transfers plus Pensions 

Who the Thai government are not worried about 

It's Tourists that matter bring in the 💰 🤑 

[AlexPattaya]

Strong baht is not what the Thai Economy needs at this time! It will definitely hurt all sectors of the economy!

The Baht should be around 35 bht to 1 U.S. Dollar! Anything less than that is not gonna help anyone!

[gearbox]

23 minutes ago, Luka77 said:

I withdrew 10k baht and the fee was 220 baht for atm service plus 5.5% conversions fee… $27 fking dollars fee to take out money, ridiculous 

Press the option on the left "Accept without currency conversion" to withdraw without the 5.5% conversion fee. This attempt to use bad conversion rate is common in many countries.

[Kwaibill]

Just remarking on some statements about 32 or 33 baht per dollar being normative I had, over the course of nine years here, become used to using 35 baht/dollar as my “ yardstick”. My Thai wife also used this as a constant, which I tend to trust as she is our primary financial director ( admittedly better than me who once held several million shares of diamond mining stock that went belly up. 😅)

[Scott Tracy]

6 hours ago, webfact said:

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

 

What planet are you on?

[Lacrimas]

of course these changes will take effect after high season ends!

[chiang mai]

6 minutes ago, Kwaibill said:

Just remarking on some statements about 32 or 33 baht per dollar being normative I had, over the course of nine years here, become used to using 35 baht/dollar as my “ yardstick”. My Thai wife also used this as a constant, which I tend to trust as she is our primary financial director ( admittedly better than me who once held several million shares of diamond mining stock that went belly up. 😅)

As much as some posters find it funny, the long term average is 32/33

 

[retarius]

Managing currency rates is against America's rules. Thailand might find themselves having some problems with the US and ability to trade if they act to reduce the Thai baht and increase their surplus in trade with the US. 

[chiang mai]

31 minutes ago, TroubleandGrumpy said:

The banking industry in Thailand is owned by the elite (lock, stock and barrel) and they dont give a rat's rear about 'the people'. Unlike western banks that have all to some degree undergone restructuring and controls to provide better services for a far more reasonable price, here they can and do charge whatever they like.  It is like the petrol industry, and most others,  petrol prices are the same at most stations - it is as if they somehow know what each other is pricing the fuels at on any day 🙂 

 

That's because they do know, it's because the government operates a Fuel Subsidy Fund (oil Fuel Fund) that regulates the price of fuel to the consumer.

 

https://www.nationthailand.com/thailand/policies/40036725

 

 

[chiang mai]

Just now, retarius said:

Managing currency rates is against America's rules. Thailand might find themselves having some problems with the US and ability to trade if they act to reduce the Thai baht and increase their surplus in trade with the US. 

But not against IMF rules, in fact, IMF rules require them to manage the exchange rate under the managed floating rate scheme.

[Xonax]

I love that the cheap chinese imports are now getting even cheaper.

[CallumWK]

7 hours ago, webfact said:

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.

 

They could have confirmed this a few days earlier.

 

I gave up on my USD FCD on Monday, because every time I clicked on the XE page I would get less baht for my dollars. Turns out I exchanged at the worst rate of the year (32.11) because since then it only has got better, and the difference with today would have bought me a nice return business class ticket to Europe.

 

BTW I was monitoring the USD/THB trading last night, and it was very obvious that someone was intervening as it was incredibly active.

Edited October 2 by CallumWK

[chiang mai]

Long term average rate, 32.70. 

 

[koolkarl]

Bank of Thailand intervenes all the time, this is not an exception.  The baht is a controlled currency.  One cannot buy or sell as much as they like and I am referring to hundreds of thousands of dollars or millions worth.  It makes extensive use of a USD swap line  they have in place with the federal reserve printing press.  All currencies are monopoly money with nothing behind them except the sheep's confidence.  I am surprised this Ponzi scheme has lasted as long as it has. 

[Jiggo]

7 hours ago, johng said:

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

So they can go home earlier 

[chiang mai]

2 hours ago, bkk_mike said:

Trying to weaken your currency (at least one that you have the printing rights for) makes you money in other currencies.

That's why the figures showing the intervention increased currency reserves.

Trying to keep a currency strong is where you spend money...

The dollar weakened suddenly because they lowered interest rates by half a point instead of the expected quarter point. That and a whole boatload of uncertainty around the election.

Not completely correct. The Foreign Currency Reserves (FCR's) include THB, as well as the 24 currencies of Thailand's major trading partners, along with gold and SDR's (Special Drawing Rights), all of which are held by the Bank of International Settlements.  THB has to be a component of the FCR's because some countries have swap agreements in place plus BOT needs THB to manage the Baht under IMF rules. 

 

When BOT wants to weaken THB it issues instructions to prefered brokers to sell THB against USD, the deal being settled via BIS. Having sold Baht and purchased USD, the cost of that transaction to the FCR's depends on the future movement in the exchange rate, in some instances the FCR's may even increase as a result. But for reporting purposes, ALL the FCR's are denominated in USD, for ease of comparison and reporting purposes.