Baht Slow And Steady Weakening...

[richard10365]

The Baht is back to nearly 34 to the US Dollar

Baht slow and steady weaking

BANGKOK: -- The Thai Baht opened at 33.93 THB/US dollar on Thursday morning and at 4PM Bangkok time it was noted at 33.86, according to Bangkok Bank.

The offshore rates are shown here: http://baht.thaivisa.com

-- Thaivisa.com 2007-08-09

Actually those are NOT the offshore rates, but the local rates. At 4.00pm today the offshore USD/THB mid rate was 30.75, for example, up from 30.00 24 hours earlier. This follows an entire week last week with no movement in the USD/THB price offshore (which is unusual). The offshore rates set the scene for the onshore ones. The BOT will not maintain a differential beyond a certain percentage. Watch how offshore trading goes to get a handle on likely future movements.

Excuse my ignorance but what is the difference between the onshore and offshore rates and why does it exist? Who uses which rate?

Please help me!

If you buy your baht in a bank located in another country you get the offshore rate.

If you buy inside Thailand you get the onshore rate .

Also, according to Bangkok Bank in Chiang Mai on Chiang Moi road......

If you send money from your account in another country to a Thai bank located in another country and they SWIFT it to your Thai bank account inside Thailand, you get the TT rate (Which is a little better than the onshore rate).

For instance, I send my money from the Defense Finance and Accounting Service (DFAS) in the USA to Bangkok Bank NY using my account type (savings) and account number. They automatically SWIFT it to Thailand. Once it is here, it gets converted automatically to baht.

For example: (exchange rates used are current at the time I made this example.)

OFFSHORE RATE

$1 = 31.10 baht at a foreign bank in another country

ONSHORE RATE

$50 - $100 = 33.63 baht inside Thailand.

TT RATE

$1 = 33.90 baht transfered from a Thai Bank in another country to a Thai bank account located inside Thailand

I don't know why it works like this, it just does.

Note: You will loose $5 for the transfer and 200 baht for the conversion from dollars to baht here in Thailand.

[MaiChai]

Supply and demand? If you exchange USD in Thailand, they want the currency so they pay higher. If you changed in the US, they want to sell you baht and dont want dollars; you are in effect the seller rather than the buyer? sell rate - buy rate = profits for bank?

I am not an expert in these things but when sending from UK to Thailand I have the option of where the currency is converted; I always choose Thailand on the basis of what I said above.

More recently I have noticed the rates in Thailand are always better than I anticipated; thus I am assume the local banks really want my forex and pay a good exchange rate?

If I got this wrong please let me know

[Thaiphile]

Supply and demand? If you exchange USD in Thailand, they want the currency so they pay higher. If you changed in the US, they want to sell you baht and dont want dollars; you are in effect the seller rather than the buyer? sell rate - buy rate = profits for bank?

I am not an expert in these things but when sending from UK to Thailand I have the option of where the currency is converted; I always choose Thailand on the basis of what I said above.

More recently I have noticed the rates in Thailand are always better than I anticipated; thus I am assume the local banks really want my forex and pay a good exchange rate?

If I got this wrong please let me know

I had heard that the Bank of Thailand was subsidising the onshore rate but I cannot understand why they would do that? Does anyone have a definitive answer?

[IAMSOBAD]

The baht has not weakened against the dollar. The dollar has gotten stronger against the baht because of the recent FED decision to leave interest rates unchanged at the last FOMC meeting. The price differential between the two currencies was totally dollar driven.That is also why gold dropped and silver dropped against the dollar., Do not believe any hype to the contrary from the BOT or any other THAI source.

[Sophon]

ONSHORE RATE

$50 - $100 = 33.63 baht inside Thailand.

TT RATE

$1 = 33.90 baht transfered from a Thai Bank in another country to a Thai bank account located inside Thailand

Both of these rates are onshore rates, they are just rates for different monetary instruments (Cash/SWIFT transfer) which accounts for the difference.

Sophon

[farang2002]

"If you really lost as much as $2,000 on the recent small move"

without using a pocket calculator i estimate he must have brought in cash in excess of one million dollars.

TROLL!

Maybe he's in need of a few new friends$$...oops! I meant ??

[ilyushin]

The baht has not weakened against the dollar. The dollar has gotten stronger against the baht because of the recent FED decision to leave interest rates unchanged at the last FOMC meeting. The price differential between the two currencies was totally dollar driven.That is also why gold dropped and silver dropped against the dollar., Do not believe any hype to the contrary from the BOT or any other THAI source.

Like it IAMSOBAD!

All the above is true, but future US economic indicators will probably make the gringo buck (US$) fall short again soon. Only my 10 cents.

[zzSleepyJohn]

If you buy your baht in a bank located in another country you get the offshore rate.

If you buy inside Thailand you get the onshore rate .

*SNIP*

OFFSHORE RATE

$1 = 31.10 baht at a foreign bank in another country

ONSHORE RATE

$50 - $100 = 33.63 baht inside Thailand.

TT RATE

$1 = 33.90 baht transfered from a Thai Bank in another country to a Thai bank account located inside Thailand

OK, that's for changing $ to baht. How about changing baht to $? Is there an offshore rate for that?

If so, and unless there's a huge spread between the offshore buying rate and the offshore selling rate, I can see a potential for a perpetual money-making machine:

1. Start with $1000

2. Change to baht at onshore TT rate

3. Take the baht cash to US and buy $ at the offshore rate

4. Count your cash and if it's more than $1000 you're in business!

Where's the flaw in this?

+ SJ

[lannarebirth]

It is interesting to note this discussion re the weakening or strengthening of the Baht against the $US.

However, what is relevant is the weakening of the $US against the Baht...or for that matter any other currency. For some, this may seem to be one in the same, but in fact this so called strengthening of the Baht is really only a reflection of the weakening $US.

If you believe that the $US will strengthen, then sure, the Baht will weaken. However, if like me you feel that the $US is in a weakening cycle, then the Baht, like many other currencies, will be stronger against the $US.

It is more interesting to note the exchange rates of the Baht against say the UK pound, $AU, $ SIN, or any other currency apart from the $US. Here the Baht is in fact weakening.

For those holding $US or receiving $US pensions/salaries etc in Thailand, then it is likely that this strengthening Baht/weakening $US will continue....at least as I read it, for the foreseeable future. For those holding currencies other than the $US, the Baht will continue to trade around current levels...and may in fact weaken slightly in the coming months.

I guess it depends on which cycle you mean. if you mean very long term, then the $USD, the Euro , the Yen, the GBP and the THB are all in downtrends.

[CRUNCHER]

call me greedy but, a retreat is a good thing for us now

Hi there Greedy. Sorry. Couldn't resist it.

[maurizio04]

The Baht is back to nearly 34 to the US Dollar

Baht slow and steady weaking

BANGKOK: -- The Thai Baht opened at 33.93 THB/US dollar on Thursday morning and at 4PM Bangkok time it was noted at 33.86, according to Bangkok Bank.

-- Thaivisa.com 2007-08-09

Huge gain i would say.......

16 july 33.27

1 august 33.73

9 august 33.90

-m

[Lifelover]

Seems to be MUCH confusion out there.

The onshore rate is 'artificially' maintained by the BOT and there is considerable pressure from Thai exporters to keep it that way. Anyone changing money in Thailand, or transferring money to Thailand will get these onshore rates.

The offshore rate is the 'real' rate of exchange in the international currency market. Anyone exchanging THB outside Thailand will get these rates.

In both cases there is a buy/sell commission imposed by the broker/bank that conducts the exchange.

Hence the offshore mid price of USD/THB right now is 30.75. You may be quoted 30.50/31.00 depending whether you are selling or buying USD, for example. The rate will differ depending on how much you exchange and with what institution. Exactly the same applies within Thailand, but the mid price will be about 10% different.

I lifted the following fuller explanation from another forum.

The onshore/offshore dichotomy exists as a result of capital controls introduced by the BoT to reduce speculative inflows intending to profit from an appreciation in the baht. These controls put an effective 10% tax on large inward speculative remittances and introduced a ban on certain inter-bank transactions between onshore and offshore institutions. This leads to an artificially stronger baht in the offshore market. See post #119 here for further details on this:

http://www.thaivisa.com/forum/index.php?sh...2702&st=115

For people wanting to send money to Thailand by bank transfer (sometimes called a "wire transfer" or a "swift transfer" or a "telegraphic transfer"), in order to get the onshore rate, the money must be sent in foreign currency and converted "onshore". The best way to do that is to specify the "correspondent bank" details to the sending bank. The "correspondent bank" is an intermediary bank that sits between the sending bank and the receiving bank and the details comprise of 1. the bank name & address, 2. swift code and 3. the receiving bank's account number with the correspondent bank; and the details will be available from the receiving bank if you ask. If you don't specify the correspondent bank details, or if you are vague about whether you are sending baht or foreign currency, then the sending bank could easily convert it at the offshore rate (since they are located offshore from thailand) and send the baht to thailand. It is normal banking practice in the UK to do this.

Another way to get the onshore rate is obviously to bring physical cash into thailand and exchange it there.

Yet another way is to take advantage of certain banks that offer free overseas ATM transactions AND also give the onshore rate. Nationwide in the UK is currently one such bank that does so.

[macular]

OK, that's for changing $ to baht. How about changing baht to $? Is there an offshore rate for that?

If so, and unless there's a huge spread between the offshore buying rate and the offshore selling rate, I can see a potential for a perpetual money-making machine:

1. Start with $1000

2. Change to baht at onshore TT rate

3. Take the baht cash to US and buy $ at the offshore rate

4. Count your cash and if it's more than $1000 you're in business!

Where's the flaw in this?

+ SJ

Hi John,

I was curious with your scenario too, therefore I made a quick check with the most current info I could obtain and factor into the following calculations:

Wire US$ to Thailand with onshore TT rate:

Forex Rate: Bangkok Bank

http://www.bangkokbank.com/Bangkok+Bank/Pe...tes/default.htm

Currency Exchange Rate Date : 9 August 2007

Update : 4 Effective From : 16:00 [unit : Baht per 1 unit of foreign currency]

Currency Description Selling Rates (Bill-DD-TT)

USD50 USD : 50-100 34.10

Convert US$1,000 to THB via TT: US$1,000 X 34.10 = THB 34,100

(and this hasn't include the TT cable charges)

Then fly to US with Thai Baht in cash:

Forex Rate: Bank of America

http://www.bankofamerica.com/foreigncurren...e=fc_charts.cfm

As of August 09, 2007, at 03:38 PM G.M.T.

Thailand Baht Value U.S. Dollar Equivalent

1000 Thailand Baht 36.26

Convert cash THB 34,100 to US$: THB 34,100 / 36.26 = US$ 940.43

Oops.... We are having a deficit of US$59.56

This may not be a feasible business...

Cheers!

[Naam]

I can see a potential for a perpetual money-making machine

yeah, yeah, yeah. you are the only one who sees that potential. a zillion others stare since nearly eight months on the on/offshore differential and none of them had the faintest idea to use it to make money "perpetually".

take a wild guess why?

[Naam]

Another way to get the onshore rate is obviously to bring physical cash into thailand and exchange it there.

another genius lecturing

[Naam]

So if you are coming to Thailand buy your baht in Thailand, if you are going to America buy it in America.

ahmm... sorry to interrupt... excuse my uneducated question... "why would anyone buy Baht in America?"

[sfokevin]

Sadly Bought in America has replaced Made in America... Cross our fingers today to see the baht pop back above 34.00

Edited August 9, 2007 by sfokevin

[TBWG]

Another way to get the onshore rate is obviously to bring physical cash into thailand and exchange it there.

another genius lecturing

Hi Dr Naam

I do feel you are being a bit harsh in this instance, You have selected a sentence in isolation out of a tutorial that I personally found useful and was quite appropriate when read in context.

As you know an awful lot of drivel is posted on financial matters and for a change and IMHO I found this one very useful.

TBWG

[speedways]

Another way to get the onshore rate is obviously to bring physical cash into thailand and exchange it there.

another genius lecturing

Hi Dr Naam

I do feel you are being a bit harsh in this instance, You have selected a sentence in isolation out of a tutorial that I personally found useful and was quite appropriate when read in context.

As you know an awful lot of drivel is posted on financial matters and for a change and IMHO I found this one very useful.

TBWG

hi guys

it seems if i want best rates from gbp or euro money to baht i should bring the money to thailand and exchange it there

does anyone know the maximum cash you can import into thailand

[choppychugger]

Hi,

Can anyoney advise.

I get paid in US$ out of Singapore, through HSBC ( off shore , I think ) into my Thai bank account.

• Does it go into my Thai Bank Account @ the Onshore rate?
  
• Could I open an HSBC account myself, and withhold my money offshore, easily enough?
  

I am new to this form of payment as I have just changed companies, and am losing about 60k a month compared with the exchange rate from Sep '06.

I am not complaining about my situation, as I can't control exchange rates, but can decide where to place my money, and to draw on it, in the safest way.

Any advice would be apreciated.

[choppychugger]

Does anyone know a good financial adviser in Phuket.........

[TBWG]

Another way to get the onshore rate is obviously to bring physical cash into thailand and exchange it there.

another genius lecturing

Hi Dr Naam

I do feel you are being a bit harsh in this instance, You have selected a sentence in isolation out of a tutorial that I personally found useful and was quite appropriate when read in context.

As you know an awful lot of drivel is posted on financial matters and for a change and IMHO I found this one very useful.

TBWG

hi guys

it seems if i want best rates from gbp or euro money to baht i should bring the money to thailand and exchange it there

does anyone know the maximum cash you can import into thailand

Hi Speedways

I know zip all about finance but common sense tells me carrying a lot of cash anywhere is a no no.

So if you are a Brit open a Nationwide flex account and you will get an ATM card which will allow you to withdraw cash anywhere in Thailand or the World for that matter with no charges and a competitive exchange rate.

If Thailand is going to be a frequent destination you could open a Thai Bank account, you would then be able to transfer STERLING to the Thai bank account which would be converted to Baht at the preferential onshore rate. However you would be subject to bank charges.

For myself I use the Nationwide flexaccount ATM card for everything other than really large transfers.

Hope this helps.

TBWG

Edited August 9, 2007 by TBWG

[harpman88]

A prominent economist at a big Thai bank was quoted in the Bangkok Post as predicting a baht rate of 37 to the U.S. dollar by mid-2008.

One could ask 100"prominent" economists together and get 100 different so called predictions. Happens all the time in all sorts of (global,regional,and nation specific)economic issues"de jour".The fact remains NOBODY knows,IN ADVANCE, what may or may not ensue.

[tjo o tjim]

A prominent economist at a big Thai bank was quoted in the Bangkok Post as predicting a baht rate of 37 to the U.S. dollar by mid-2008.

One could ask 100"prominent" economists together and get 100 different so called predictions. Happens all the time in all sorts of (global,regional,and nation specific)economic issues"de jour".The fact remains NOBODY knows,IN ADVANCE, what may or may not ensue.

Well, unfortunately, there is a global liquidity crisis right now, and it could be the start of the fall. BNP put a hold on trading of one of their funds due to the problem, and it has been well known in the US for a while with the sub-prime lending. It could get pretty ugly fast-- the big money is looking for safe places to put their investments, and there doesn't seem to be too much out there right now.

For Thailand, it puts pretty much risk on what has always been a risky investment. Expect a REALLY bad day for the SET today.

Hang on......

[Carmine6]

"If you really lost as much as $2,000 on the recent small move"

without using a pocket calculator i estimate he must have brought in cash in excess of one million dollars.

TROLL!

One decimal point off. It would be closer to $100,000. But I agree this can't be a real post because to actually lose $2,000 you'd have buy baht then buy the dollars back.

[Naam]

"If you really lost as much as $2,000 on the recent small move"

without using a pocket calculator i estimate he must have brought in cash in excess of one million dollars.

TROLL!

One decimal point off. It would be closer to $100,000. But I agree this can't be a real post because to actually lose $2,000 you'd have buy baht then buy the dollars back.

it looks like you are one decimal off. 2k of a 100k = 2%, Baht weakened (SBC website) from 39.86 to 39.92 = 6 Satangs of 3,988 Satangs = ?%

[crocken]

"If you really lost as much as $2,000 on the recent small move"

without using a pocket calculator i estimate he must have brought in cash in excess of one million dollars.

TROLL!

There he goes again the SUPER troll spotter....... He loves that word.

[Naam]

there are harmless trolls -like you Crocken- who never provide any useful input. real trolls who spread rubbish and misinformation should be pointed out. it's for the benefit of TV-members who seek information.

[Carmine6]

"If you really lost as much as $2,000 on the recent small move"

without using a pocket calculator i estimate he must have brought in cash in excess of one million dollars.

TROLL!

One decimal point off. It would be closer to $100,000. But I agree this can't be a real post because to actually lose $2,000 you'd have buy baht then buy the dollars back.

it looks like you are one decimal off. 2k of a 100k = 2%, Baht weakened (SBC website) from 39.86 to 39.92 = 6 Satangs of 3,988 Satangs = ?%

The OP was talking about roughly a 1 baht change in the offshore rate. I don't think ariaby was claiming a loss of $2k off a 6 satang move in the onshore rate.

[zzSleepyJohn]

OK, that's for changing $ to baht. How about changing baht to $? Is there an offshore rate for that?

If so, and unless there's a huge spread between the offshore buying rate and the offshore selling rate, I can see a potential for a perpetual money-making machine:

1. Start with $1000

2. Change to baht at onshore TT rate

3. Take the baht cash to US and buy $ at the offshore rate

4. Count your cash and if it's more than $1000 you're in business!

Where's the flaw in this?

+ SJ

Hi John,

I was curious with your scenario too, therefore I made a quick check with the most current info I could obtain and factor into the following calculations:

Wire US$ to Thailand with onshore TT rate:

Forex Rate: Bangkok Bank

http://www.bangkokbank.com/Bangkok+Bank/Pe...tes/default.htm

Currency Exchange Rate Date : 9 August 2007

Update : 4 Effective From : 16:00 [unit : Baht per 1 unit of foreign currency]

Currency Description Selling Rates (Bill-DD-TT)

USD50 USD : 50-100 34.10

Convert US$1,000 to THB via TT: US$1,000 X 34.10 = THB 34,100

(and this hasn't include the TT cable charges)

Then fly to US with Thai Baht in cash:

Forex Rate: Bank of America

http://www.bankofamerica.com/foreigncurren...e=fc_charts.cfm

As of August 09, 2007, at 03:38 PM G.M.T.

Thailand Baht Value U.S. Dollar Equivalent

1000 Thailand Baht 36.26

Convert cash THB 34,100 to US$: THB 34,100 / 36.26 = US$ 940.43

Are you sure that's definitely the offshore rate you're quoting there?

I've just tried entering THB 34100 on that Bank of America site and pressing the "Calculate US Dollars" button and got the answer $1236.466

Not sure if we're really on to anything here, but if your THB 36.26/US$ were correct, it would indicate a very much larger spread between offshore buying and offshore selling rates than between onshore buying and selling rates.

Given that the offshore rates are the natural world market rates for buying and selling baht (the onshore being artificially subsidised by the BOT), I don't really see why the buy-sell spread should be so much larger offshore than it is onshore.

Such a big spread is what you might expect for a tin-pot banana republic, but I wouldn't have put Thailand in that category these days.

Oops.... We are having a deficit of US$59.56

This may not be a feasible business...

Double check that BOA site and see if you can make that $59.56 loss into a $236.47 profit like I did!

+ SJ