Baht Hits New 10-year High Against Dollar

[scotbeve]

Hi all,

Didn't read much into this thread however, I've a few questions to ask you forum readers here....

1. Were ANY of you around (in Thailand) circa 1997 (re: the Thaitanic)?? In defence of the " I don't give a rats A*se about the Thai Baht" etc. ad infinum...

2. Did it not work the other way?? $$, GBP, Euro (sorry, not around at that time)..., and just about any other currency outside of ASEAN ...

3. The rate exploded, any others with the experience? Re: had to close 2 bank accts., have it sent to S'pore due to the Bank of Thailand shutting the door on currency exchange electonically, put the clams in a Halliburton briefcase, got dolled up for biz air travel, and hand-carried the cash back to TH and waited for the $$$ to sky-rocket (52.12 for 2 hours - from 25.4 / 1$), and a mad scramble for 5 hours going to money changers.

[wintermute]

I wonder how Thai exports are managing to hold up at all? The baht is strong against about 8+ foreign currencies at the moment. I smell a credit burst waiting to happen if exporters are constantly borrowing to stay afloat. With the recent subprime crisis hitting the U.K. now and the pound falling this could spell trouble for some asian exporters to the west. If Thailand has its own credit crisis then its entire economy could go into a spiral.

They have been loaning out money hand over fist again to people that are defaulting at significant rates. Exports are down..fuel costs are up. This is not a sustainable pattern by any means. I don't see any sector where Thailand is doing significantly better at. Perhaps Tourism has somewhat recovered from the Tsunami levels but that's still only about 10% of the gdp.

Edited January 14, 2008 by wintermute

[maxcrc]

RMB. RMN is Renminbi not RNB.

the international code/abbreviation for the chinese currency is CNY.

that' s right.

But chinese traders are more used to call/spell their currency RMB when they quote the prices.

anyway we are talking about the same thing.

It is going towards 7 for 1 $.

[Brewsta]

back in Aust for 3 months more. wife has aust atm card for last month she pulls out 1000 baht my account shows 34.45-35.34 baht plus a $4 fee of course atm rates kill the money exchangers

they are "selling" your baht at 21% over the internal rate ? - ouch !

i.e. 35.34 per Au$ as opposed to 29.20 ? I am most def in the wrong racket !

take care.

[Brewsta]

RMB. RMN is Renminbi not RNB.

the international code/abbreviation for the chinese currency is CNY.

that' s right.

But chinese traders are more used to call/spell their currency RMB when they quote the prices.

anyway we are talking about the same thing.

It is going towards 7 for 1 $.

stands for RenMenBi - "the Peoples" money...... err, except the 700-plus million farmers here who actually have fluck all, of course.

such is Life )

[LaoPo]

Today's rate to the Euro is 48.76. That is more or less the the same rate as it has been the last 5 years.

Better you check the data of the past 5 years than...Euro versus Thai Baht.

LaoPo

[slim]

Has anyone tried carrying THB cash to a friendly overseas bank/moneychanger - I am thinking Singapore, Malaysia, Hong Kong in order to sell THB for USD at international rate and then wire transfer USD back to Thai for conversion back to THB at onshore rate? Seems to me a good 8% profit is available.

Risky - there's a 50,000 baht limit on taking THB out of Thailand, though I think you can take up to 500,000 into neighboring countries - not sure if Malaysia qualifies.

[Brewsta]

RMB. RMN is Renminbi not RNB.

the international code/abbreviation for the chinese currency is CNY.

that' s right.

But chinese traders are more used to call/spell their currency RMB when they quote the prices.

anyway we are talking about the same thing.

It is going towards 7 for 1 $.

Specifically, the RMB is the Chinese 'convertible' currency - called the RMB Yuan - the initial foreign exchange denominator and mechanism by which the PRC allowed financial transactions between Chinese and 'foreign' bodies.....just over a decade ago, this tool was formalised.

This, of course, was before we could play with Gold Futures in Hong Kong & Macau....... Gold looking good, yes?

With the PRC having over $USD 1.5 trillion on deposit in a basket of currencies worldwide, the RMB is certainly undervalued and inflation is expected @ 9% PA after the Olympic dream has faded.

Then expect to see even worse rioting and discontent from the citizens - bigtime.

stay safe & smile.......play nice, people

Edited January 14, 2008 by Brewsta

[Otis]

Maybe you went to a Thai school, where math is a problem. The Euro, did around 35 to to the bath only a few years ago. The problem is simple, not that baht is strengthening, the Dollar is weakening because of an insane monetary policy of the US. The Euro is actually strengthening against all other major currencies including the Pound Sterling and the Yen.

The header should have been, THE DOLLAR IS WEAKENING AGAINST ALL MAJOR AND MOST SOUTH EAST ASIAN CURRENCIES.

Do not worry you can still make money, ask the Germans. If the currency rate would be a real problem , the German economy was wiped out decades ago with their strong D-Mark. Certain countries are used to strong currencies and will turn a problem in an opportunity. And otherwise we still have the Thai army....

Yes, opportunity is the key word here. The disequilibrium affords us all a chance to make a little money. Some US regional bank stocks have been beaten down 50+% and are now paying out dividends in the 10% range. That's a pretty good return while waiting for a price recovery. We should thank all the lemmings for giving us this chance. Yes, there are other stocks that are good bets now, but as Willie Sutton said, when asked why he robbed banks; "That's where the money is." Now is the time when we can rob banks legally.--otis

[farang2002]

Remember when the baht was weak and prices for imported goods kept rising and rising?

Has anyone seen retail baht prices for the same goods decrease at all due to the now strong baht?

I bought a sweatshirt at MBK recently for 500b: about the same price I'd pay at Costco in the US. Fewer and fewer special "deals" here in BKK if you're spending USD.

[farang2002]

That s true. But there are MANY thai exporters who still export in US$.

Actually, in some sectors most of them still quote in $ and for them it is a very big problem.

Well, my self I am in the same situation because I have more customers in the Americas than in Europe.

So, if you keep the prices your profit will go almost to nothing.

If you rise the price accordingly, your customers will need new pricelists every month or so and they will not be happy (some of them understand other don t want to understand).

If you change your pricelist in euros your american customers will ask for a conversion and than say"wow ! thats much more than last time." But you can say "Now ,it is the same price (in euros or bahts) as you can see... Exchange rate has changed".

It is not easy, but it is not just a problem of the Baht ,it is a problem of a weak dollar worldwide.

Check the exchange rate $ with philippines peso (and this is not any asian tiger !!) from 57 to about 41 now.

Brazilan real ? From almost 4 to 1.8 !! Chilean peso ? From over 750 to 495 !

South African rand ? even worse.

UK pound is already declining , Canadian dollar last fall highest peak will not probably been overtaken, but euro has still some weeks or few months to possibly rise and than will start to go down.

But asian currencies may still carry the weight of a further appreciation driven by Chinese RNB appreciation.

RNB (yuan) appreciation is under way and will follow I think until the Olympic Games, inflation in China is raising dangerously and yuan needs to strenghten to avoid a dangerous double digit inflation.

I hope after Songkran thai baht will start to slow too.

US $ will soon recover against the euro (slowly anyway)but still not now...if benchmark will be cut there is still room for a depreciation.

US $ policy for me is wrong because it is true that US $ exports are more competetive but think about the cost of IMPORTS (including OIL) ...if you import more than what you export, the cheaper the currencies and huger and huger the deficit...this is mathematics...

and moreover higher oil prices fuel inflation...and slow economy + risk of inflation is a real BAD thing because if you cut the rate inflation will go even higher but if you don t do that a recession is just outside the doors.

May I say this US administration really suck ?? With Clinton USA has at the same time: strong dollar, incredible budget SURPLUS, moderate cuurent account deficit (under control) , big economic growth,

low unemployment ....

now they have been using the opposite receipt for years with disastrous results and they still follow that way.

This administration has done a better job of destabilizing the financial security of the US than any terrorist attack ever could. Clinton actually cared about the long-term economic prospects of the American people by paying down the national debt with the huge budget surplus his economic principles earned. Bush however is too much of an ego maniac and too idiotic to see the big picture and the harm his lack of sound economic principles does destabilizing the USD. Americans complain about the high cost of oil and don't understand how budget deficits relate to a weak dollar.

I wholeheartedly agree, Bush sucks!! Thank G** he'll be gone in a year. The only remaining problem is the bloc which voted him in office; what a bunch of idiots! Hopefully they will be too ashamed to vote.

[stepenwolf1958]

I am not some expert about economy or finance...I see all of this,lately,in a different and specific light.In a global way... However - this news MADE MY DAY...heheheeee.I am glad about this...Keep going on...

[goatfarmer]

The principal cause of the dollar's decline is the decreasing short term interest rates in the US. Short term interest rates in the US are falling, compared with those of other developed countries excluding Japan. As long as the US cuts interest rates, the dollar will fall.

[Naam]

The Baht is NOT appreciating.

Why does it feel like it is then?

my Bhuddist friends are telling me it's all an illusion

[Crash999]

China this year is in a spot of trouble. There are a lot of things happening at once- RMB appreciation, wage pressures, new worker social welfare laws, futher export rebate reductions, and material cost increases mean that exporters can't hold prices any longer.

For the past 6-7 years it has been a true buyer's market for consumer products- costs the same or down every year. Now for 2008 increases will be passed on- we're seeig 5-15% depending on category. Retailers who are already suffering will be pressured to maintain margin. They're saying they won't accept increases but as China is the only real market for many goods there will be no choice but to either eat the increase or (more likely) pass it on as higher retail pricepoints.

Here's hoping China implodes and us exporters can do more business out of Thailand soon. =)

[Naam]

The principal cause of the dollar's decline is the decreasing short term interest rates in the US. Short term interest rates in the US are falling, compared with those of other developed countries excluding Japan. As long as the US cuts interest rates, the dollar will fall.

i refrain from forecasting exchange rates but i am convinced that Bernanke will cut rates considerably. that inspite of the FED's tradition too act strongly in election years. the dollar's decline is however not only based on falling rates. the dollar was anaemic and decline also existed when Greenspan hiked a dozen (or more) times.

[andyc2006]

i refrain from forecasting exchange rates but i am convinced that Bernanke will cut rates considerably.

You must have inside info. Either that, or you're basing your forecast on Bernanke's statement 2 days ago that the Fed would be aggressively cutting rates at the end of January, since recession fears are now greater than inflation fears (in their opinion).

[lannarebirth]

The principal cause of the dollar's decline is the decreasing short term interest rates in the US. Short term interest rates in the US are falling, compared with those of other developed countries excluding Japan. As long as the US cuts interest rates, the dollar will fall.

i refrain from forecasting exchange rates but i am convinced that Bernanke will cut rates considerably. that inspite of the FED's tradition too act strongly in election years. the dollar's decline is however not only based on falling rates. the dollar was anaemic and decline also existed when Greenspan hiked a dozen (or more) times.

It looks as though they're heading for 3%. That ain't good. Greenspan of course was way way way behind the curve. A Bubble King.

[Naam]

i refrain from forecasting exchange rates but i am convinced that Bernanke will cut rates considerably.

You must have inside info. Either that, or you're basing your forecast on Bernanke's statement 2 days ago that the Fed would be aggressively cutting rates at the end of January, since recession fears are now greater than inflation fears (in their opinion).

my opinion that the FED will cut rates exists since the subprime crisis surfaced and that was six months ago. no need to listen to helicopter-Bernie's recent "confession" and then drawing conclusions

[Naam]

It looks as though they're heading for 3%. That ain't good.

do alternatives exist?

[chrislarsson]

The Baht is NOT appreciating.

Why does it feel like it is then?

Forget theory....what advice do you give to expats here living off incomes flows based on capital in other countries?

Would you bring over a couple of years living expenses right now if it was

a. in euroland

b. in UK

c. in Oz

d. in NZ

e. in USA

An explanation of why you advocate a particular course of action would be appreciated.

My bet is that Asian currencies in general are undervalued, and therefore will keep appreciating to both the Euro and the Dollar in the long run. China can not keep buying dollars forever to keep the Yuan low. The same goes for Thailand. Thailand's foreign reserve is about USD 85 billions at the moment and growing fast, which is far too much (To put this number into context, it means that Thailand can maintain its imports for about 10 months without exporting a single good).

Once China will let the Yuan appreciate, other countries in Asia are likely to follow as China is their greatest competitor for their export sectors, and the threat of loosing business to them will diminish.

This appreciation is likely to be a good thing for Asia, as Asians will have to start consuming their own goods, and not rely on Americans to keep buying them.

But going back to theory, maybe you should do like multinational corporations are doing, which is hedging. Keep a little of both to minimize the risk.

[Nemothepemo]

I am an American Citizen, age 63, I receive Social Security payments every month and a Workers Compensation Settlement payment every month. My medical insurance is covered by Workers Comp. and when my Settlement Payments end, I will receive a lifetime pension on top of my social security. It's not rich living, but I feel very lucky to have it.

I would like to thank Thai Immigration for making it mandatory for me to keep 800,000 Baht in a bank account in order to maintain my retirement visa. Next, I would like to thank the Property Manager who convinced me that it is actually cheaper to rent a condo than to buy one at my age. Next, I would like to thank the drunk I met in a bar who told me about the ride he got taken on when he married a Thai lady. I would like to thank the Thai Ladies for holding the line on their prices. Lastly, I would like to thank George Bush for making sure that the American economy would be sliding down the slippery slope into recession.

I came to Thailand when the bank took my U.S. dollars for 44 Baht for each and every one I put in their hands. I put a lot of dollars in their hands.

I hope the exchange rate keeps going in the current direction.

I would love to buy my dollars back for 25 Baht for 1 U.S. greenback. That would give me a lot more dollars than I started with.

Then it will be time to head off the Hawaii and spend my final years looking at those beautiful sunsets and nursing on the government tit.

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

[Captain Ron]

I am an American Citizen, age 63, I receive Social Security payments every month and a Workers Compensation Settlement payment every month. My medical insurance is covered by Workers Comp. and when my Settlement Payments end, I will receive a lifetime pension on top of my social security. It's not rich living, but I feel very lucky to have it.

I would like to thank Thai Immigration for making it mandatory for me to keep 800,000 Baht in a bank account in order to maintain my retirement visa. Next, I would like to thank the Property Manager who convinced me that it is actually cheaper to rent a condo than to buy one at my age. Next, I would like to thank the drunk I met in a bar who told me about the ride he got taken on when he married a Thai lady. I would like to thank the Thai Ladies for holding the line on their prices. Lastly, I would like to thank George Bush for making sure that the American economy would be sliding down the slippery slope into recession.

I came to Thailand when the bank took my U.S. dollars for 44 Baht for each and every one I put in their hands. I put a lot of dollars in their hands.

I hope the exchange rate keeps going in the current direction.

I would love to buy my dollars back for 25 Baht for 1 U.S. greenback. That would give me a lot more dollars than I started with.

Then it will be time to head off the Hawaii and spend my final years looking at those beautiful sunsets and nursing on the government tit.

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

Perhaps. Expect the purchasing power of your us $ ss payments and pension to fall by 10-20% per year for the next 2-3 years. good luck.

[gregybn]

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

Actually... half full after about 9 years...

Expect the purchasing power of your us $ ss payments and pension to fall by 10-20% per year for the next 2-3 years. good luck.

Exactly... here is a very recent graphical form... showing what your gov't doesn't want you to understand...

... as they inflate away your (soon to be worthless) fiat junk.

[Marvo]

I need to ship a whole boat load of pounds stirling to LOS and convert to Baht in the next 4-6 weeks. I sure seem to have picked the wrong time this time!!!

I must have been a bad boy in my previous life sometime. The pound has slipped 10% against the baht in the last 60 days!

But seriously, should I exchange today or wait? I'll take the average of this board's beautifully balanced opinion.

[wasabi]

Does one get the on shore rate by using an ATM within Thailand?

[marquess]

Does one get the on shore rate by using an ATM within Thailand?

Also is it the onshore or off shore rate when using a Thai credit card to purchase stuff over the net from the States?

[KK-Mike]

I am an American Citizen, age 63, I receive Social Security payments every month and a Workers Compensation Settlement payment every month. My medical insurance is covered by Workers Comp. and when my Settlement Payments end, I will receive a lifetime pension on top of my social security. It's not rich living, but I feel very lucky to have it.

I would like to thank Thai Immigration for making it mandatory for me to keep 800,000 Baht in a bank account in order to maintain my retirement visa. Next, I would like to thank the Property Manager who convinced me that it is actually cheaper to rent a condo than to buy one at my age. Next, I would like to thank the drunk I met in a bar who told me about the ride he got taken on when he married a Thai lady. I would like to thank the Thai Ladies for holding the line on their prices. Lastly, I would like to thank George Bush for making sure that the American economy would be sliding down the slippery slope into recession.

I came to Thailand when the bank took my U.S. dollars for 44 Baht for each and every one I put in their hands. I put a lot of dollars in their hands.

I hope the exchange rate keeps going in the current direction.

I would love to buy my dollars back for 25 Baht for 1 U.S. greenback. That would give me a lot more dollars than I started with.

Then it will be time to head off the Hawaii and spend my final years looking at those beautiful sunsets and nursing on the government tit.

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

What month and year was the exchange 44 to $1 ??

[wilko]

The header should have been, THE DOLLAR IS WEAKENING AGAINST ALL MAJOR AND MOST SOUTH EAST ASIAN CURRENCIES.

Hear ! Hear !

Nobody gives a rat shit about THB... Dollar is falling. Period. We have a global trend.

I propose a little pray for all our friends here, who denied with force the global trend. The mighty USD was supposed to play the "comeback kid".... Amen.

Toilets. This is the place where it belongs.

I bet that denial will continue. It's human. Confronted to a losse... that is growing with time... the denial increases too.

pity the poor Filipinos.........their currency has gone through the roof!

All Asian currencies are on the up and the dollar is sliding........at present this is great as I'm paid in Baht....but....of course eventually I will have to close down the business as Thai industry collapses when it can;'t sell anything to the states........etc etc...

Last century we had crashes....we learned from this so now we have slides...this time next year we will be firmly in the grip of a recession....I hope you've all got some hedge against this...gold? maybe??

Don't believe in "decoupling" it won't last...in the end if the US economy goes, we all will go with it to a greater or lesser extent.

[george]

Update:

Central bank chief defends bank's supervision of baht's value

BANGKOK: -- Bank of Thailand Governor Tarisa Watanagase on Monday reiterated that the central bank had done its best to oversee the baht value, saying the policy it had implemented to date was justified.

The bank had already attempted to the utmost to supervise the baht, resulting in the currency moving in the same direction with other currencies of neighbouring countries since early this year, she said.

The BoT chief added that she had informed Prime Minister Surayud Chulanont and Finance Minister Chalongphob Sussangkarn that the baht movement at the current level had no impact on the country's exports.

The baht appreciated to 33.13 to the US dollar, its strongest in a decade, on Monday morning as the greenback continued to weaken.

Regarding suggestions that BoT reduce its holdings of the US dollar in its international reserves since the greenback continued to weaken, she said the bank had already done that before.

"The baht value issue we raised for discussion with the premier last Friday is considered a normal agenda. What we have done to supervise the currency remains unchanged now," Mrs Tarisa explained.

"We affirm the baht is not stronger than other currencies. It has moved in a normal range. The finance minister has been kept abreast of the matter.

"We understand all people are worried about the baht volatility," she asserted. "We have done our best to supervise it."

The baht is nearly 8 per cent stronger since January 2007.

--TNA 2008-01-15