Economy The Thai Baht Paradox: Currency Climbs as Economy Falters

[BayArea]

9 hours ago, spidermike007 said:

Mr. Trump is taking a wrecking ball to the pillars of American power and innovation. His tariffs are endangering U.S. companies’ access to global markets and supply chains. He is slashing public research funding and gutting our universities, pushing talented researchers to consider leaving for other countries. He wants to roll back programs for technologies like clean energy and semiconductor manufacturing and is wiping out American soft power in large swaths of the globe.

China’s trajectory couldn’t be more different.

 

9 hours ago, spidermike007 said:

Yet Mr. Trump remains blindly fixated on very harmful tariffs. He doesn’t even seem to grasp the scale of the threat posed by China. Before the two countries’ announcement last Monday that they had agreed to slash trade tariffs, Mr. Trump dismissed concerns that his previous sky-high tariffs on Chinese goods would leave shelves empty in American stores. He said Americans could just get by with buying fewer dolls for th

 

9 hours ago, spidermike007 said:

 

Mr. Trump’s blinkered obsession with short-term Band-Aids like tariffs, while actively undermining what makes America strong, will only hasten the onset of a Chinese-dominated world.

Mike, your constant obsession with Trump is very unhealthy. Stick with your complaints regarding high tariffs on imported wine.

[hotandsticky]

11 minutes ago, BayArea said:

 

 

Mike, your constant obsession with Trump is very unhealthy. Stick with your complaints regarding high tariffs on imported wine.

 

 

It is also becoming increasingly tedious.

[Pouatchee]

15 hours ago, KireB said:

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

 

🇹🇭 How the Baht Is "Managed":

1. Intervention in the foreign exchange market

• The BoT buys or sells USD or other foreign currencies to stabilize the Baht.

• If the Baht strengthens too much (hurting exports), the BoT buys USD and sells Baht to weaken it.

• If the Baht weakens too much (raising import costs and inflation), the BoT does the opposite.

2. Capital controls (soft measures)

• In the past, Thailand has used capital control tools to limit speculative inflows/outflows.

• For example: restrictions on short-term bond purchases by foreign investors, or reporting requirements on currency swaps.

3. Foreign reserve buildup

• The BoT has accumulated large reserves (hundreds of billions USD) partly to manage currency stability and avoid shocks.

• Critics argue that stockpiling reserves can artificially weaken the Baht, aiding Thai exports — which some call “manipulation.”

---

🌎 International Viewpoint: Is this "Currency Manipulation"?

The U.S. Treasury periodically reviews countries for currency manipulation. The criteria include:

• Large trade surpluses with the U.S.

• Persistent one-sided currency intervention

• Significant current account surpluses

Thailand has been watched, but not formally labeled a “manipulator” in recent U.S. Treasury reports. However, some critics (mainly exporters or financial observers) argue that BoT policies intentionally keep the Baht undervalued to boost exports.

[spidermike007]

1 hour ago, BayArea said:

 

 

Mike, your constant obsession with Trump is very unhealthy. Stick with your complaints regarding high tariffs on imported wine.

I do realize truth can be very disturbing when it's of such a ridiculous nature. 

[spidermike007]

1 hour ago, BayArea said:

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. 

We have at least an equal number of posters on this form who support Trump, and even just the idea of criticizing a single policy of his is totally objectionable to them, and something that they would never have the courage to do. 

[Harrisfan]

1 hour ago, BayArea said:

 

 

Mike, your constant obsession with Trump is very unhealthy. Stick with your complaints regarding high tariffs on imported wine.

Yes it is unhinged

[Cameroni]

It is only a "paradox" if you do not understand that the performance of the almighty dollar affects the exchange rate of all other currencies. 

 

Once you understand it, it will all make sense.

 

Dollar weak, Baht goes up. Very logical.

[scoobyguy]

12 minutes ago, Cameroni said:

It is only a "paradox" if you do not understand that the performance of the almighty dollar affects the exchange rate of all other currencies. 

 

Once you understand it, it will all make sense.

 

Dollar weak, Baht goes up. Very logical.

But its not just usd its also increasing against the GBP, CAN$, Yen, Euro, AUS$ and just about every other currency.

[flexomike]

6 hours ago, BayArea said:

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. 

Spidermike, Tug, Jingthing just to name a few

[Airalee]

16 hours ago, spidermike007 said:

The Thai baht is grossly over inflated, but the confidence in the dollar is extremely weak, and the extreme level of instability that is being created by a circus clown is destabilizing the world's major currency, and Asia is bound to profit from that extreme level foolishness. 

 

In the long run Asia will continue to ascend while the US continues to decline. 

 

Mr. Trump is taking a wrecking ball to the pillars of American power and innovation. His tariffs are endangering U.S. companies’ access to global markets and supply chains. He is slashing public research funding and gutting our universities, pushing talented researchers to consider leaving for other countries. He wants to roll back programs for technologies like clean energy and semiconductor manufacturing and is wiping out American soft power in large swaths of the globe.

China’s trajectory couldn’t be more different.

 

It already leads global production in multiple industries — steel, aluminum, shipbuilding, batteries, solar power, electric vehicles, wind turbines, drones, 5G equipment, consumer electronics, active pharmaceutical ingredients and bullet trains. It is projected to account for 45 percent — nearly half — of global manufacturing by 2030. Beijing is also laser-focused on winning the future: In March it announced a $138 billion national venture capital fund that will make long-term investments in cutting-edge technologies such as quantum computing and robotics, and increased its budget for public research and development.

 

The Chinese electric carmaker BYD, which Mr. Trump’s political ally Elon Musk once laughed off as a joke, overtook Tesla last year in global sales, is building new factories around the world and in March reached a market value greater than that of Ford, GM and Volkswagen combined. China is charging ahead in drug discoveries, especially cancer treatments, and installed more industrial robots in 2023 than the rest of the world combined. In semiconductors, the vital commodity of this century and a longtime weak point for China, it is building a self-reliant supply chain led by recent breakthroughs by Huawei. Critically, Chinese strength across these and other overlapping technologies is creating a virtuous cycle in which advances in multiple interlocking sectors reinforce and elevate one another.

 

Yet Mr. Trump remains blindly fixated on very harmful tariffs. He doesn’t even seem to grasp the scale of the threat posed by China. Before the two countries’ announcement last Monday that they had agreed to slash trade tariffs, Mr. Trump dismissed concerns that his previous sky-high tariffs on Chinese goods would leave shelves empty in American stores. He said Americans could just get by with buying fewer dolls for their children — a characterization of China as a factory for toys and other cheap junk that is wildly out of date.

 

The United States needs to realize that neither tariffs nor other trade pressure will get China to abandon the state-driven economic playbook that has worked so well for it and suddenly adopt industrial and trade policies that Americans consider fair. If anything, Beijing is doubling down on its state-led approach, bringing a Manhattan Project-style focus to achieving dominance in high-tech industries.

 

Mr. Trump’s blinkered obsession with short-term Band-Aids like tariffs, while actively undermining what makes America strong, will only hasten the onset of a Chinese-dominated world.

 

If each nation’s current trajectory holds, China will likely end up completely dominating high-end manufacturing, from cars and chips to M.R.I. machines and commercial jets. The battle for A.I. supremacy will be fought not between the United States and China but between high-tech Chinese cities like Shenzhen and Hangzhou. Chinese factories around the world will reconfigure supply chains with China at the center, as the world’s pre-eminent technological and economic superpower.

 

America, by contrast, may end up as a profoundly diminished nation. Sheltered behind tariff walls, its companies will sell almost exclusively to domestic consumers. The loss of international sales will degrade corporate earnings, leaving companies with less money to invest in their businesses. American consumers will be stuck with U.S.-made goods that are of middling quality but more expensive than global products, owing to higher U.S. manufacturing costs. Working families will face rising inflation and stagnant incomes. Traditional high-value industries such as car manufacturing and pharmaceuticals are already being lost to China; the important industries of the future will follow. Imagine Detroit or Cleveland on a national scale.

 

Avoiding that grim scenario means making policy choices — today — that should be obvious and already have bipartisan support: investing in research and development; supporting academic, scientific and corporate innovation; forging economic ties with countries around the world; and creating a welcoming and attractive climate for international talent and capital. Yet the Trump administration is doing the opposite in each of those areas.

Whether this century will be Chinese or American is up to us. But the time to change course is quickly running out.

Nice cut and paste of a NY Times opinion piece.

 

Loser.

 

 

 

 

[Airalee]

52 minutes ago, flexomike said:

Spidermike, Tug, Jingthing just to name a few

 

52 minutes ago, flexomike said:

Spidermike, Tug, Jingthing just to name a few

Nah….Nothing loves in Spidermikes head.   Most of his lengthy posts are plagiarized from various sources such as The NY Times.  (See my previous comment above)

[Airalee]

7 hours ago, BayArea said:

 

 

Mike, your constant obsession with Trump is very unhealthy. Stick with your complaints regarding high tariffs on imported wine.

Now google those quotes of his and you’ll see that they aren’t even his own”complaints”.   
 

 

[Jim Blue]

15 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.

 

Seems very complicated to me The Central Bank sets the rate independently.....

[JohnOFphon]

Go out and buy $$. Then when it is 45 to 1...sell....oh....35..I was dreaming there.

[watchcat]

21 hours ago, JackGats said:

I see another constant, turning any thread into a discussion of Trump.

 

Must be a popular guy then?

[KireB]

7 hours ago, Pouatchee said:

 

🇹🇭 How the Baht Is "Managed":

1. Intervention in the foreign exchange market

• The BoT buys or sells USD or other foreign currencies to stabilize the Baht.

• If the Baht strengthens too much (hurting exports), the BoT buys USD and sells Baht to weaken it.

• If the Baht weakens too much (raising import costs and inflation), the BoT does the opposite.

2. Capital controls (soft measures)

• In the past, Thailand has used capital control tools to limit speculative inflows/outflows.

• For example: restrictions on short-term bond purchases by foreign investors, or reporting requirements on currency swaps.

3. Foreign reserve buildup

• The BoT has accumulated large reserves (hundreds of billions USD) partly to manage currency stability and avoid shocks.

• Critics argue that stockpiling reserves can artificially weaken the Baht, aiding Thai exports — which some call “manipulation.”

---

🌎 International Viewpoint: Is this "Currency Manipulation"?

The U.S. Treasury periodically reviews countries for currency manipulation. The criteria include:

• Large trade surpluses with the U.S.

• Persistent one-sided currency intervention

• Significant current account surpluses

Thailand has been watched, but not formally labeled a “manipulator” in recent U.S. Treasury reports. However, some critics (mainly exporters or financial observers) argue that BoT policies intentionally keep the Baht undervalued to boost exports.

Indeed, 'some critics'.  Thailand has only been watched.

[Caldera]

On 5/23/2025 at 4:19 AM, webfact said:

In a striking turn of events, the Thai baht has recently surged against the US dollar, reaching 32.70 baht per dollar, raising concerns for Thailand's fragile economy.

 

I'm not surprised, it simply means that Trump is doing an even better job destroying the dollar than the Thai government does tanking the economy.