Economy The Thai Baht Paradox: Currency Climbs as Economy Falters

[BKKBike09]

9 hours ago, webfact said:

Sanguan Jungsakul from Krungthai Bank highlights the baht's unique position, appreciating rapidly due to short-term speculative flows rather than solid economic fundamentals.

 

"Short-term speculative flows" I guess meaning international investment in Thai government debt. Strong baht also helps those here who want to/need to buy dollars for overseas investment or purchases. Thailand still buying a lot of LNG on the spot markets.

[Tom100]

3 hours ago, edwinchester said:

It's about the Thb rise against USD so why not give reasons ongoing in the US for said rise?

Edwin is correct.  The $USD has been in broad decline this year per FRB data. 

The 2 biggest negatives for the $USD this year are based in US politics.

1) Trumps trade war may reduce foreign demand (China!) for $US debt.

2) Trump's newest budget proposal will increase $US debt by 5 TRILLION more than the previous base-case CBO forecast (tax cuts and a trillion dollar military budget).

Both are bad news for the $USD.  There is no paradox: Baht is higher because it is being compared to a currency that fell. DUH!!!

[Thingamabob]

The Thai baht is permanently over-valued. This has lead to several financial disasters, most notably the crash of 1997/8. Those Thais in a position of power/privilege invest heavily overseas, especially in property, for which purpose the higher the value of the baht the better. 

[WHansen]

1 hour ago, hotchilli said:

It is what it is... no sense getting all worked up about it.

That is my thought as well.

As a typical 3 month visitor, i have only known 44 ish to the GBP, if it goes down to 42 i only lose £250 on my £5,000 transfer which i am certainly not going to lose any sleep over.

Those dealing with massive amounts for retirement funds or property purchases will probably see it differently though.

[riverhigh]

"Sanguan Jungsakul from Krungthai Bank highlights the baht's unique position, appreciating rapidly due to short-term speculative flows rather than solid economic fundamentals."

 

I agree with the above statement. So much speculation worlwide, not just Thailand.  A lot of investors trying to diversify their currency holdings to mitigate losses caused by the US tariffs. No one wins in a trade war, It's a matter of who loses less. Something a Maga Trump supporter will never understand until it's too late.

[norsurin]

8 hours ago, ikke1959 said:

The results of manipulating the currency here in Thailand.. The greed will bring the country down.

U nailed it Thats what their doing.

[StayinThailand2much]

1 hour ago, John Drake said:

Question: why does the rising price of gold increase the value of the baht and how does Thailand export so much gold, when there is almost no gold mined in Thailand? I would think Thailand would import much more gold than it buys.

Rank	Country/Organization	Gold holdings (in metric tons)	Gold's share of forex reserves
1	United States	8,133.5	74.9%
2	Germany	3,351.2	77.1%
—	International Monetary Fund	2,814.0	—[a]
3	Italy	2,451.8	74.1%
4	France	2,437.0	74.7%
5	Russia	2,332.7	29.5%
6	China	2,292.3	6.5%
7	Switzerland	1,039.9	9.6%
8	India	879.6	13.4%
9	Japan	845.9	6.6%
10	Turkey	623.9	43.6%
11	Netherlands	612.4	64.9%
21	Thailand	234.6	9.5%

 

Thailand: almost 1/4 of gold reserves compared to Switzerland, and almost 28% of India's holdings (despite having a much smaller economy and population)!

[kimothai]

As soon Trump gets mentioned the lefties set off my car alarm with their BS. 

[Dionigi]

If I remember correctly, when the Baht was 90 to the pound, it was because the government at the time floated the Baht on the market. This seems to mean that the Baht is not allowed to find its own level and is artificially set by the government/banks or what ever.  The government said for weeks they would not devalue the Baht and excused the drop in value by saying they had allowed it to find its own value.

[Kinok Farang]

5 hours ago, JackGats said:

This thread is about the Thai currency, not about Trump or the USD.

Not when you are a Dem.

How do they sleep at night?

[StayinThailand2much]

2 minutes ago, Dionigi said:

The government said for weeks they would not devalue the Baht and excused the drop in value by saying they had allowed it to find its own value.

 

Good luck to Thailand's exporters! 😆 

[TroubleandGrumpy]

The Thai elite have been manipulating the currency ever since the Junta took Office, to ensure it does not go below their preferred level to the USD.  Check last 20-30 years and you will see that in 2014 the Thai Baht started going up against all currencies - and despite some highs and lows since then - the Baht has remained much higher than pre-2014. All parts of the Thailand Government have been doing what is 'directed' they do, in order to stop the Baht going down too far or too fast. Thailand has massive foreign reserves from decades of economic growth after 2000, and it has been using that more than most Governments do, to 'protect' the Baht.  It is only those countries that manipulate their currency down (like China and others did for exports) that are seen by IMF and USA as 'cheating' - countries that manipulate their currencies up are not investigated.

 

The Thai elite are holding up the Baht, otherwise their loan and financial repayments will go up, and if the Baht drops too much they will not be able to cover-up their fake GDP figures, and because importing expensive items like machinery and luxury cars and military equipment etc etc, will cost a lot more. Plus of course, wealthy Thais buying overseas property or investments etc,. have to pay more if the Baht goes down.  A high Baht is great for the wealthy Thai elite, but it is bad for the average Thai who is much more reliant on exports and tourism for jobs and their economic well being.  The Baht is going to crash - it is just a matter of time and temperature before they cannot hold it up as high as they want it held. 

 

How is this being done - many ways.  Despite so many calls for lower interest rates for over last 2-3 years, the BOT kept the rates high even as other countries lowered them post Covid - as required by the wealthy elites. Those in Government who buy and sell currency to protect the Baht (yes they do), overdid it late last year and this resulted in the new inexperienced PM admitting they 'got it wrong'.  If any Expat here does not see that TAT is lying through their backsides about the amount of tourists and their value to the economy, then they are completely unaware that TAT does that 'under directions' so that the GDP figures (based on tourism and other numbers) are higher on paper than they really are. The same goes for all the other measures that make up the GDP calculations that are done by the Government - they are not independently audited like a company. Corruption and graft is what allows 'cheating' to occur in Thailand - if any Expat here thinks they are not cheating on this and all other matters, you need to open your eyes up and look around you. 

 

It is not a 'paradox' - it is manipulation.

 

[wensiensheng]

10 hours ago, BayArea said:

stocks are going up, tariffs stabilizing, and US inflation is trending down yet the greenback is weaken against the mighty baht!  🤣🤣🤣

Well, stocks are actually treading water atm. Depending how far you go back, they are lower than, say, 3 months ago.

 

Tariffs are paused for 90 days, and have about 60 days before the pause ends. I’m not sure that counts as “stabilizing “ since the don’t float up and down, they are what they are set at, full stop.

 

US inflation has trended down over the last 12 months, that trend APPEARS to perhaps petering out, hence the Federal Reserve has held pat on interest rates for the last two sessions rather than cutting.

other than the above, you are totally correct.

 

Concerns about the ballooning US deficit and borrowing level, a credit downgrade, a government that seems only too happy for the USD to weaken, concerns of the independence of the Federal Reserve, all also reasons for a weaker dollar.

 

In summery, the baht is not strong, but the USD is weaker against almost all other major and emerging market currencies.

[bkknirvana]

All currencies are manipulated and are fiat. They will all be worthless eventually, including the USD

[black tabby12345]

Currency Climbs as Economy Falters

Quite natural.

Economic downturn=Low inflation rate.

Lower inflation rate=Value of money increases=Currency appreciation==High THB.

 

The opposite is:

Higher inflation rate=Value of money decreases

=Currency depreciation

=exchange rate goes down

 

 

 

 

[helloagain]

8 hours ago, KireB said:

And how exactly is the Baht manipulated? Could you explain your claim?

Thais moaning about tourism down, forieners doing more things wrong up, the press saying almost potential another coup ? Need for weed medical certificates i don't smoke but generally not good, still thais beating up tourists. I refuse to bring big money here until exchange rate goes up. 

[Cardano]

It's not about the USD weakening, over the last month the GBP has strengthen more against the dollar than THB has, yet at the same time THB has strengthen against the GBP....how?

[John Drake]

2 hours ago, StayinThailand2much said:

Rank	Country/Organization	Gold holdings (in metric tons)	Gold's share of forex reserves
1	United States	8,133.5	74.9%
2	Germany	3,351.2	77.1%
—	International Monetary Fund	2,814.0	—[a]
3	Italy	2,451.8	74.1%
4	France	2,437.0	74.7%
5	Russia	2,332.7	29.5%
6	China	2,292.3	6.5%
7	Switzerland	1,039.9	9.6%
8	India	879.6	13.4%
9	Japan	845.9	6.6%
10	Turkey	623.9	43.6%
11	Netherlands	612.4	64.9%
21	Thailand	234.6	9.5%

 

Thailand: almost 1/4 of gold reserves compared to Switzerland, and almost 28% of India's holdings (despite having a much smaller economy and population)!

 

I still don't get it. Thailand doesn't compare to the US according to your chart, per capita or otherwise. At the same time the UK isn't even on that list and the British pound has gone up from 43 to almost 44. I just don't get it. Trying to understand, but can you elaborate?

[riclag]

Oh well it was nice while it lasted !

Hovering around 35 & 36  to $1.

 

I remember, 28, I’m prepared to weather that again too.

[John Drake]

10 minutes ago, riclag said:

Oh well it was nice while it lasted !

Hovering around 35 & 36  to $1.

 

I remember, 28, I’m prepared to weather that again too.

 

As its Trump stated desire to gut the value of the dollar (he got it down to 29 during his first administration), you may get your wish. 

[KireB]

I earn both Baht and Euros, so I really couldn't care less. When the Baht is high, I change it in Euros, and vice versa. So keep your bank account when  you move here.

[StayinThailand2much]

42 minutes ago, John Drake said:

 

I still don't get it. Thailand doesn't compare to the US according to your chart, per capita or otherwise. At the same time the UK isn't even on that list and the British pound has gone up from 43 to almost 44. I just don't get it. Trying to understand, but can you elaborate?

 

 

17

United Kingdom

310.2

 

There you go; the UK has slightly higher gold reserves than Thailand (234.6 metric tons). The U.S. has a GDP 54 times that of Thailand, but barely 35 times the gold reserves, not to mention foreign currency reserves; Thailand: US$246.900 billion (March 2025) vs. the U.S.: US$243.610 billion (Nov. 2024).

[John Drake]

5 minutes ago, StayinThailand2much said:

 

 

17

United Kingdom

310.2

 

There you go; the UK has slightly higher gold reserves than Thailand (234.6 metric tons). The U.S. has a GDP 54 times that of Thailand, but barely 35 times the gold reserves, not to mentio

 

Is GDP to gold then the determining factor?

[norsurin]

2 hours ago, TroubleandGrumpy said:

The Thai elite have been manipulating the currency ever since the Junta took Office, to ensure it does not go below their preferred level to the USD.  Check last 20-30 years and you will see that in 2014 the Thai Baht started going up against all currencies - and despite some highs and lows since then - the Baht has remained much higher than pre-2014. All parts of the Thailand Government have been doing what is 'directed' they do, in order to stop the Baht going down too far or too fast. Thailand has massive foreign reserves from decades of economic growth after 2000, and it has been using that more than most Governments do, to 'protect' the Baht.  It is only those countries that manipulate their currency down (like China and others did for exports) that are seen by IMF and USA as 'cheating' - countries that manipulate their currencies up are not investigated.

 

The Thai elite are holding up the Baht, otherwise their loan and financial repayments will go up, and if the Baht drops too much they will not be able to cover-up their fake GDP figures, and because importing expensive items like machinery and luxury cars and military equipment etc etc, will cost a lot more. Plus of course, wealthy Thais buying overseas property or investments etc,. have to pay more if the Baht goes down.  A high Baht is great for the wealthy Thai elite, but it is bad for the average Thai who is much more reliant on exports and tourism for jobs and their economic well being.  The Baht is going to crash - it is just a matter of time and temperature before they cannot hold it up as high as they want it held. 

 

How is this being done - many ways.  Despite so many calls for lower interest rates for over last 2-3 years, the BOT kept the rates high even as other countries lowered them post Covid - as required by the wealthy elites. Those in Government who buy and sell currency to protect the Baht (yes they do), overdid it late last year and this resulted in the new inexperienced PM admitting they 'got it wrong'.  If any Expat here does not see that TAT is lying through their backsides about the amount of tourists and their value to the economy, then they are completely unaware that TAT does that 'under directions' so that the GDP figures (based on tourism and other numbers) are higher on paper than they really are. The same goes for all the other measures that make up the GDP calculations that are done by the Government - they are not independently audited like a company. Corruption and graft is what allows 'cheating' to occur in Thailand - if any Expat here thinks they are not cheating on this and all other matters, you need to open your eyes up and look around you. 

 

It is not a 'paradox' - it is manipulation.

 

Nothing last forever.The day the world discover what their doing the game is over.

[StayinThailand2much]

11 minutes ago, John Drake said:

 

Is GDP to gold then the determining factor?

 

It seems to be for currency trading. The baht has been pretty stable for the past 18 years.

[blaze master]

4 hours ago, spidermike007 said:

Total fiction. Inflation is not going down in the US, the government is desperately trying to demonstrate that fiction, by throwing out fake numbers, but I'm here right now and I could tell you inflation is raging. It's likely closer to 20% than the official figure of 3.1%, sorry but magnesium ore just doesn't mean that much to me in my daily life. 

 

https://tradingeconomics.com/united-states/inflation-cpi

[riverhigh]

4 hours ago, kimothai said:

As soon Trump gets mentioned the lefties set off my car alarm with their BS. 

Would you like to provide us with some examples of BS provided by the lefties (your words not mine)?

[BayArea]

7 hours ago, kimothai said:

As soon Trump gets mentioned the lefties set off my car alarm with their BS. 

we have many posters on this forum who despised Trump so much that any chance they get to discredit him regardless of topic, they do it without any hesitation. 

like we said, he's living rent free in their head. 

[cardinalblue]

The word surge means to get stronger more powerful moving forward etc 

 

the article should have used the word weakens as that what the Thai is doing against the dollar

 

Thus article poorly written

[BayArea]

7 hours ago, wensiensheng said:

Well, stocks are actually treading water atm. Depending how far you go back, they are lower than, say, 3 months ago.

 

Tariffs are paused for 90 days, and have about 60 days before the pause ends. I’m not sure that counts as “stabilizing “ since the don’t float up and down, they are what they are set at, full stop.

 

US inflation has trended down over the last 12 months, that trend APPEARS to perhaps petering out, hence the Federal Reserve has held pat on interest rates for the last two sessions rather than cutting.

other than the above, you are totally correct.

 

Concerns about the ballooning US deficit and borrowing level, a credit downgrade, a government that seems only too happy for the USD to weaken, concerns of the independence of the Federal Reserve, all also reasons for a weaker dollar.

 

In summery, the baht is not strong, but the USD is weaker against almost all other major and emerging market currencies.

Thank you for your well thought out response and I can agree with this assessment.