Thai Baht

[bat69]

I have been trying to look for some info on the net regarding the above but have not had any luck.

At the moment it is sitting just above 34 (onshore rate) and has been like this for approx a month. It went below 34 in August.

The Baht was getting stronger even before the Sub prime mortgage crash. How much effect did this have on the baht value??

Do you think the worst is over and now the baht will start to depreciate against the USD.

What do you think it will be like in 2 months time or 3 months time.

I am no expert in any of the above and any input would be greatly appreciated

Cheers

Bat69

[britmaveric]

No, won't get weaker -BOT has said as much. Rate will be 34-35, fixed price, unless bht weakens which is truely what they want.

[bat69]

I am thinking about changing AUD to USD travellers cheques now or the next couple of days becasue it is a goo rate. So it is pretty certain that the exchange rate onshore will not go below THB 34 and it could even be go up to THB 35 in couple of months.

[britmaveric]

Well this is thailand so nothing is guaranteed, but I'd say if I were to wager on it - I think its a safe bet.

[bat69]

Thats great news because the AUD has just broken the 90c barrier against the USD. They say that it may keep on rising. I am waiting with anticipation but as you said nothing in guranteed

Cheers

[percy2]

The Baht should reach parity with the dollar in Feb. 08.

In March look for rumors of Taksin buying California.

Cheers

[cclub75]

The Baht should reach parity with the dollar in Feb. 08.

In March look for rumors of Taksin buying California.

Hum... It's easy to brush off real issues with humor.

Read this piece (Nation).

-BOT is manipulating the THB, to curb its appreciation vis a vis the USD.

-Therefore, BOT's USD reserves are ballonning (80.6 billions now !)... meanwhile, that creates big accounting losses for the bank.

It was already true in 2006... But they are scared with this year...

-This is why, the BOT asks the gvt to... erase the losses or recapitalize !

-Meanwhile, it's clear that BOT expects the trend (fall of USD) to continue.

This is a dangerous game. Why ? Because Thailand's economy is tiny compare to Japan and China. The point is : it's not sure that the BOT has the means to fight the trend.

[thaiman]

No, won't get weaker -BOT has said as much.

I wouldn't trust anything the BOT says. It is such a volatile market now anything could happen. Nobody knows wheres the baht is going to go.

[percy2]

-BOT is manipulating the THB, to curb its appreciation vis a vis the USD.

-BOT is manipulating the THB, to curb its value vis a vis the depreciating USD.

I think this reflects the situation more clearly, or less opaquely whichever you prefer.

Cheers

[coldcrush]

The GBP is looking good and has showed a steady climb against the baht.

No expert but thats what makes my money grow when changing does it not!

[Furbie]

The GBP is looking good and has showed a steady climb against the baht.

No expert but thats what makes my money grow when changing does it not!

What the baht will do against the dollar has a whole lot more to do with US interest rate and monetary policies than Thailand policies. Once the dollar regains strenght, the baht will weaken against the dollar. This is Bush and his folks pushing a weak dollar policy - once that's over, the dollar will appreciate against the baht.

[gregb]

Either Friday or Saturday last week, Saigon Times announced that Vietnam would slow its purchasing of US Treasuries and allow its currency to appreciate against the USD. (Can't find the original link, but lots of secondary references to it via Google.) This will have major ramifications for SE Asia, especially Thailand.

Thailand has always stated they want the Baht to move in unison with other regional players, and Vietnam is probably the most direct competitor they have.

Expect the USD to continue drifting lower slowly, although I wouldn't expect any drastic swings like we saw in the past. As long as Vietnam is allowing their currency to appreciate, I see no reason why Thailand would stop the Baht drifting up also.

The housing meltdown in the US and peak oil/energy depletion are just getting started. The USD has alot further to fall. There may be small corrections, but over the next decade the USD is going nowhere but down. Helicopter Ben can only do so much. There is nothing fundamental other than sneaky accounting tricks to pull it up.

Exactly when, how far, and at what rate is anyone's guess. If you knew the answer to those questions, you'd be much too wealthy to worry about posting on TV now, wouldn't you? :-)

Best long term bet is don't try and time the market. Get out of USD now. There may be a short blip up, but then again, it could be a monotonic slow roll to the bottom.

[midas]

Sub-prime woes could drag on for 18 months, says analyst

PARISTA YUTHAMANOP

Problems in the US sub-prime housing market could put the world economy at risk for at least 18 months, says Cheng Tai Hui, chief economist for Southeast Asia for Standard Chartered Bank.

Defaults by US sub-prime mortgage borrowers are expected to surface over the next 12-18 months when loans are up for renewal. Tighter lending standards by financial institutions and new supplies of foreclosed collateral assets entering the market could harm the US housing market, Mr Cheng said.

"What we saw over the past six months was probably the first wave of the problem. Default rates will rise when the sub-prime loans' 'teaser points' end and interest rates have to increase," he said.

The downturn in the US housing and job markets would cause consumption to fall to a four- or five-year low and lead to a slower economy in 2008.

"The housing market will remain weak in 2008, considering prices and inventories. The job market is softening. Two out of three factors that support US consumers, besides equities, will decline next year," he said.

Mr Cheng said the US Federal Reserve was expected to reduce interest rates by 25 basis points each at the October and December meetings, reducing the benchmark US rate to 4.25% by year-end and through 2008. However, a rise in food and oil prices and weak currencies could add pressure on inflation in Asian regional economies, causing central banks to resist reducing interest rates.

Significant rises in asset prices in Hong Kong and Singapore this year could be a negative factor for rate cuts, he said.

Regional economies would be affected by the slowdown in the US economy next year. South Korea, China and Vietnam have strong domestic demand that would help offset the impacts, he noted.

He expected Indonesia, the Philippines and Thailand to cut interest rates further, while other East Asian countries would increase rates by year-end.

The Bank of Thailand's Monetary Policy Committee (MPC) meets tomorrow to review its key rate, currently at 3.25%.

Mr Cheng said the US dollar was expected to strengthen over the next few quarters as low interest rates improve economic sentiment. The Chinese central bank, meanwhile, is expected to let the yuan appreciate by 4-5% against the dollar in 2008 to cool the economy.

Usara Wilaipich, the bank's senior economist, said the US slowdown would affect Thai exports, and that domestic demand was unlikely to offset the impact.

The country's current account was expected to record a $2.5-billion deficit in 2008, compared with a $4.8-billion surplus this year. Exports were expected to grow 14-15% in 2007 and 8% in 2008.

Consequently, she said, the baht was expected to weaken to 35 to the dollar by year-end and to 36.5 by mid-2008.

"The baht probably has already peaked at 33.2 in July in this year. It is very unlikely we will see the baht return to that level, considering the declining current account," Ms Usara said.

She said the MPC was likely to reduce its interest rate by a quarter point to 3% by the end of the year.

Bangkok Post Tuesday October 09, 2007

[Naam]

Either Friday or Saturday last week, Saigon Times announced that Vietnam would slow its purchasing of US Treasuries and allow its currency to appreciate against the USD.

yeah right! a long way to go for "appreciation"

[cclub75]

yeah right! a long way to go for "appreciation"

It's a bit unfair.... VND has never been a traded currency...

Now, to hear that they might, perhaps, allow VDN to appreciate versus USD is indeed a big news. A shift.

And afterall it makes sense : 25 years ago, Vietnam was in a very poor state. Now, we a solid growth, chinese style, their currency has to appreciate.

[Somnambulist]

Oops, ignore this post and see the next one. Still learning to use TV. Click on the photo to see full size. Do you think the dollar is, like, in a trend or something?

Edited October 15, 2007 by Somnambulist

[Somnambulist]