Baht Slow And Steady Weakening...

[Naam]

The OP was talking about roughly a 1 baht change in the offshore rate.

the OP i adressed changed USD into THB onshore. offshore rate therefore irrelevant.

[aidon]

I think the general consensus is around the financial markets (I'm talking offshore rates) is that the THB will range between 28.4 and 33.4 over the next month and between 26.1 and 34.3 over 3 months. As you can see it is seen as directionless and volatile having almost a 20% range spread on a 95% prediction interval.

Personally I think it will settle back to the pre 97 level as most other currencies are heading that way.

[Carmine6]

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

I think the $1,236.466 is the calculation to order currency. On a sell, the rate coming up is 0.02973, or 33.636 baht/dollar. That'd give $1,013.79.

But to clarify further, the rate on the Bangkok Bank website to use is the buy TT rate of 33.95 instead of the sell at 34.15. That'll give you 33,950 baht to exchange and get $1,009.33 from B of A.

[zzSleepyJohn]

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

*SNIP*

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

*SNIP*

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

I think the $1,236.466 is the calculation to order currency. On a sell, the rate coming up is 0.02973, or 33.636 baht/dollar. That'd give $1,013.79.

Yes, on reconsideration I think you are right there Carmine6. I've been having another look in that BoA site trying to find their offshore returned foreign currency cash rate for buying US$, but everything they quote there seems to be for buying forex, not for selling it. I wonder where you found that figure of 0.02973 or 33.636 baht/$ ? I have just e-mailed BoA now to see if they publish their returned foreign currency rates. Let's see.

But to clarify further, the rate on the Bangkok Bank website to use is the buy TT rate of 33.95 instead of the sell at 34.15. That'll give you 33,950 baht to exchange and get $1,009.33 from B of A.

Agreed. A bit marginal, but at least that figure is still positive! - - Hmmm... so if we've got all our rates right here, we'd need to be inputting biggish sums into our perpetual money machine in order to overcome the TT charges. Of course a bit of speculation on the falling $ could help.

+ SJ

[bat69]

If you type in "sell currency" in the search box it will give you an option for their selling rates

[bendix]

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

*SNIP*

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

*SNIP*

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

I think the $1,236.466 is the calculation to order currency. On a sell, the rate coming up is 0.02973, or 33.636 baht/dollar. That'd give $1,013.79.

Yes, on reconsideration I think you are right there Carmine6. I've been having another look in that BoA site trying to find their offshore returned foreign currency cash rate for buying US$, but everything they quote there seems to be for buying forex, not for selling it. I wonder where you found that figure of 0.02973 or 33.636 baht/$ ? I have just e-mailed BoA now to see if they publish their returned foreign currency rates. Let's see.

But to clarify further, the rate on the Bangkok Bank website to use is the buy TT rate of 33.95 instead of the sell at 34.15. That'll give you 33,950 baht to exchange and get $1,009.33 from B of A.

Agreed. A bit marginal, but at least that figure is still positive! - - Hmmm... so if we've got all our rates right here, we'd need to be inputting biggish sums into our perpetual money machine in order to overcome the TT charges. Of course a bit of speculation on the falling $ could help.

+ SJ

All very nice in theory, but it doesnt work in practice. If it did, as Dr Naam says, we would all be doing it.

The theory falls down when you take your baht over to the US and try to sell it. You will get NOTHING like the rates you expect - the buy sell spread is so huge. I was in Chicago last week and had a few thousand baht so - out of interest - i went to a couple of banks and tried to exchange them. Not a chance. The only bank that had a thai baht quote wanted something like 36 baht for a dollar.

Why would US banks be interested in buying baht?

[Neddy]

The question was posed as to why the US$ might apreciate in the near future. In 2008, there will be a presendential election. Depending on the outcome, the $ could make a sizeable appreciation. For example, if John Edwards were elected and he made good on his promise to pull our troops out of Iraq, the dollar would spurt on all the major currency exchanges. If Hillary were elected, you would also see a boost although not as much (IMHO) as if Edwards were elected.

Should a Republican win, you might see the $ weaken depending on who the winner actually was.

But the bottom line is that the election will have a major bearing on the strength of the dollar and one could rightly expect to see a major change positively or negatively.

[up-country_sinclair]

^ reason # 3,293 to vote democrat next fall.

[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.

Can anyone advise?

Any advice would be apreciated.

[sfokevin]

The Bangkok Post shows the baht above 34

34.06 to be exact... http://www.bangkokpost.net/

And my link to the offshore rate shows 31.50...

I assume people are cashing in their baht to buy all those cheap US stocks...

Edited August 11, 2007 by sfokevin

[palm]

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.

it's always good to have prophets and fortune tellers around us. REALLY! I MEAN IT!

Yes, I always have have a good laugh reading some of the Neanderthal posts. Keep it up!

Its up! It's down. It's up; no its down again. Down a bit more today (end of the world!). Oh, its back up a bit today (must be ok again). Phew. Remember guys, to always read TV posts giving the low-down on the market fundamentals pushing a currency up or down.

[flyer]

Living in Europe i have seen the Baht steady against the euro for about one or two years now... around 45 B to one euro..... Some minor fluctuations but av erage stable ... so where is the Baht evaluation ? Only in the dreams of the military govment who is keen to make believe how good they do while actually the whole Thai economy is a soap bubble. The value of the Baht to the dollar is the result of the constant weakening of the dollar over the past one or two years.... and the dollar is going to get even weaker as far you can reasonably forecast now ... Expect 30 B to the dollar by year end. Sorry for you guys who are paid in $$$$$... but the cause is the weakening US economy, mainly caused by the fact that US citizens spend much more then they earn.... ha, you don't need to be a rocket scientist to understand this can't go on forever and a correction will have to take place and is already starting now in the credit market there. Wether it is good for Thailand to follow the down trend of the Dollar is yet anohter question. I think by doing that they only make it easy short term (export to US) but undermine their already shaky economy even more for the monger term.

[Jimjim]

Living in Europe i have seen the Baht steady against the euro for about one or two years now... around 45 B to one euro..... Some minor fluctuations but av erage stable ... so where is the Baht evaluation ? Only in the dreams of the military govment who is keen to make believe how good they do while actually the whole Thai economy is a soap bubble. The value of the Baht to the dollar is the result of the constant weakening of the dollar over the past one or two years.... and the dollar is going to get even weaker as far you can reasonably forecast now ... Expect 30 B to the dollar by year end. Sorry for you guys who are paid in $$$$$... but the cause is the weakening US economy, mainly caused by the fact that US citizens spend much more then they earn.... ha, you don't need to be a rocket scientist to understand this can't go on forever and a correction will have to take place and is already starting now in the credit market there. Wether it is good for Thailand to follow the down trend of the Dollar is yet anohter question. I think by doing that they only make it easy short term (export to US) but undermine their already shaky economy even more for the monger term.

And you don't need to be a rocket scientist to see that your post is pure and utter speculation.

Edit: Not to mention severe over-simplification of currency fluctuations.

Edited August 11, 2007 by Jimjim

[Naam]

Living in Europe i have seen the Baht steady against the euro for about one or two years now... around 45 B to one euro..... Some minor fluctuations but av erage stable ... so where is the Baht evaluation ?

the Baht "evaluation" vs. €UR can be seen here:

[Jimjim]

Doesn't look steady at 45 to me, Dr. Naam.

[Lancelot]

FWIW, I keep my funds in my US bank and use my ATM card to withdraw funds (baht) as needed. Luckily I've never paid any fees to either a Thai bank (ATM dispensing) or US my bank. I have always received the "on shore" rate as well.

I called Kasikorn bank and asked who sets the ATM (Visa) baht-USD exchange rate and she told me Visa.

You can check the exchange rates here daily: http://corporate.visa.com/pd/consumer_serv...er_ex_rates.jsp

I usually get about 13 basis points less than the gross, no bank fee rate. (1%=100 basis points)

FYI,

Lance

Edited August 11, 2007 by Lancelot

[wasabi]

I don't see anything in the US economic picture that has improved which would justify an increase in USD vs other currencies. The fed did keep the interest rate the same but also recently pumped billions of dollars into the market to save creditors from going bankrupt. The war in Iraq, subprime fiasco, debt ridden nation. None of these have improved at all, why should the dollar go back up until they do? Whether or not the baht may decline is another story.

[Naam]

Doesn't look steady at 45 to me, Dr. Naam.

our problem here is that a bunch of participants add their two cents (even though some of these "cents" are worth less than horse-sh*t) without providing any evidence. if nobody steps in and presents facts, TV-members who seek information are not only confused but might make wrong decisions based on misinformation.

[london]

Doesn't look steady at 45 to me, Dr. Naam.

our problem here is that a bunch of participants add their two cents (even though some of these "cents" are worth less than horse-sh*t) without providing any evidence. if nobody steps in and presents facts, TV-members who seek information are not only confused but might make wrong decisions based on misinformation.

Yes Naam, many view these posts for information, for ideas, for some idea of what others are thinking.

A minority view them as any opportunity to criticise the views of others...often without contributing anything constructive to the discussion themselves.....let alone presenting "facts".....or "providing any evidence" to either support or deny any position. In fact, I cannot think of a situation where one can use "facts" or provide "evidence" for what is, after all, a prediction...in this case, the rate of the Baht against the $US IN THE FUTURE.

At the end of the day, IF anyone was to base their decison making based solely on posts in this, or for that matter ANY forum, without doing their own research, then really, they have only themselves to blame.

I would hope that you would agree.

[Naam]

A minority view them as any opportunity to criticise the views of others...often without contributing anything constructive to the discussion themselves....

At the end of the day, IF anyone was to base their decison making based solely on posts in this, or for that matter ANY forum, without doing their own research, then really, they have only themselves to blame.

I would hope that you would agree.

i agree London but my posting was not directed at "views" as the OP presented a "fact" (exchange rate THB/€UR) which is clearly misleading. we all have views and opinions, but when presenting them the posting should clearly show that these views and opinions are not necessarily facts but quite often biased and based on our individual wishful thinking.

by the way, none of us can be sure how much our views influence some of those who seek advice in this forum when making decisions and we should keep that in mind.

[london]

A minority view them as any opportunity to criticise the views of others...often without contributing anything constructive to the discussion themselves....

At the end of the day, IF anyone was to base their decison making based solely on posts in this, or for that matter ANY forum, without doing their own research, then really, they have only themselves to blame.

I would hope that you would agree.

i agree London but my posting was not directed at "views" as the OP presented a "fact" (exchange rate THB/€UR) which is clearly misleading. we all have views and opinions, but when presenting them the posting should clearly show that these views and opinions are not necessarily facts but quite often biased and based on our individual wishful thinking.

by the way, none of us can be sure how much our views influence some of those who seek advice in this forum when making decisions and we should keep that in mind.

Yes, you are 100% correct. I hope that others will be guided by our views and opinions....and not take them as gospel.

[Jimjim]

So Dr. Naam, I appreciate your facts. Now I wonder about your opinion. What do you think will happen to the baht. Will it creep back to 40? Get stronger as some are still saying? Or is it just too hard to predict?

[VegasVic]

I don't see anything in the US economic picture that has improved which would justify an increase in USD vs other currencies. The fed did keep the interest rate the same but also recently pumped billions of dollars into the market to save creditors from going bankrupt. The war in Iraq, subprime fiasco, debt ridden nation. None of these have improved at all, why should the dollar go back up until they do? Whether or not the baht may decline is another story.

The dollar has been rising and will continue to do so, there are many reasons but the primary ones are that the dollar was artificially pushed down just as oil, metals and many other commodities and currencies were artificially pushed up and now those leveraged positions are being closed out or sold off and a flight to the safety of the U.S. dollar has started. The Yen carry trade has just begun to unwind the ripples from this event will have a profound effect on world markets. As the large hegde funds and mutual funds and currency traders exit their positions due to forced redemtions and a flight to safety, look for oil, gold, copper, aluminum and many other commodities and currencies around the world to take a nose dive. If this unwinding of the yen carry trade turns into a true crisis then a worldwide recession is a very real possibility.

[JaiGuru]

I don't see anything in the US economic picture that has improved which would justify an increase in USD vs other currencies. The fed did keep the interest rate the same but also recently pumped billions of dollars into the market to save creditors from going bankrupt. The war in Iraq, subprime fiasco, debt ridden nation. None of these have improved at all, why should the dollar go back up until they do? Whether or not the baht may decline is another story.

Maybe the emotional issues you mentioned have less to do with exchange rates than Fed shepherding.

My breadhead estimates calendar year real gross domestic product growth within a range of 2% to 2.8%. This suggests the monthly average of new jobs will remain in a range of 100k to 150k. If the average monthly new job figures fall, all the Fed has to do is reduce short-term interest rates in an effort to stimulate growth.

Due in part to the current exchange rate, US exports continue to expand at a brisk pace. Gotta be happy with that.

Without regard to the Fed’s battle with perceived inflation, the core inflation readings remain excellent with the key personal consumption expenditure core index just 2% above the year ago level. The consumer price index core reading is 2.2% y-o-y, and the six-month annualized CPI core index is up only 2%. Headline inflation for the CPI is currently 2.7% y-o-y.

Before the usual nutters say the CPI is broken because the price of gas is going up but the CPI isn’t, it’s important to point out that higher energy prices do impact the energy and transportation sectors in the CPI, but consumers are drained of their discretionary spending power and therefore the aggregate impact on the CPI trends to be counter-inflationary over time. For this reason, higher energy prices have not led to higher core inflation.

Seems like a lot of good news to me. Even the shake-out in the stock market comes at the perfect time to weed out the weak.

You can wring your hands over the War in Iraq, the “sub-prime fiasco,” or your other emotional issues all you want, but meanwhile I’ll be making money!

[bangkoksingapore]

what is the credit lending like in Bangkok right now? I see these huge increases in the price of real estate and I am wondering if wages have also risen? What is the possibility of a credit crisis in Bkk?

[Naam]

So Dr. Naam, I appreciate your facts. Now I wonder about your opinion. What do you think will happen to the baht. Will it creep back to 40? Get stronger as some are still saying? Or is it just too hard to predict?

Jim, my personal view/opinion was weeks ago and still is that the steep appreciation of THB has fizzled out. the last days are evidence although the sudden appreciation of the USD is distorting the picture. i also don't see any "40" in the near or midterm future and that goes of course for "25" as some posters have suggested. the markets (no matter where you look) are in a turmoil. the prevailing subprime crisis and the worldwide credit crunch make it impossible to paint a clear picture.

[JaiGuru]

For what it's worth, CitiGroup published the following THB forecast last week:

Onshore USD/THB

Aug 3 -- 33.85

3-Month -- 33.00

6-Month -- 32.50

12-Month -- 31.00

They've been pretty good calling it in the past, but have been off a bit since the coup.

[JaiGuru]

Turns out there was a new forecase published yesterday:

Onshore USD/THB

Aug 10 -- 34.08

3-Month -- 33.00

6-Month -- 32.50

12-Month -- 31.00

Looks like they're sticking to their story...

Edited August 16, 2007 by JaiGuru

[sfokevin]

Onshore Rate hits 34.50 / Offshore 33.05 today... There seems to be a steady (Planned) movement despite the turmoil of the stock market...

[PeaceBlondie]

Maybe I should have asked this question here instead of another topic: could international big players in the SET be exiting the Thai stock market because they need dollars to redeem their positions in other markets? In other words, has this worldwide credit crunch caused a demand for dollars and a glut of baht? Could the exchange ratio actually be affected by supply and demand for once?