Baht Becomes Strongest In 7 Months

[george]

Baht becomes strongest in 7 months

BANGKOK: -- The Thai baht has appreciated to its strongest level in seven months, caused by the continual weakening of the US dollar over the past weeks.

The Thai currency strengthened to Bt39.20 a US dollar here yesterday--its strongest level in seven months.

However, the upward trend of the Thai currency is in same direction of all other major currencies in the region, including the Japanese yen, the Hong Kong dollar, the Singapore dollar and the Malaysian ringgit, according to analysts.

Thai exporters were expected to be affected by the stronger baht in the short run, about 3-6 months, as their advanced contracts when the Thai baht became weaker could result in some losses in their anticipated revenues or profits, said the analysts.

Nonetheless, the weakening US dollar had led to a drop in oil prices in the US market by up to US$3.0 a barrel yesterday.

It is likely that the oil prices in the US market will further drop to US$45.0 a barrel in the near future, according to the analysts.

--TNA 2004-12-03

[marquess]

Well I suppose that is will make my holiday just that bit cheaper.

[Backpack_thailand]

It's still struggling badly against the pound though!

Yesterday it was back up to nearly 76!

[marquess]

This is indeed the reality of the matter. The Baht has depreciated badly against most major currencies in the last four of five years. When I first got here five years ago, it was 50 Baht to one Pound, It used be 18 Baht to one NZ$, now it is 28. It has only held it's own against the dollar, five yeas ago, it was 38 baht to one dollar. So the truth of the matter, in the long term it is going NOWHERE.

[LaoPo]

what about the Baht/Euro conversion?

[marquess]

I haven't really been following the Baht/Euro conversion that much. I do recall it being 48 to the Baht and if I am not wrong it is about 52 now. Thus I suppose it still highlights what I said earlier.

[gregor200]

for any conversion (as well as longtime history) you can look at

www.oanda.com

[Backpack_thailand]

This is indeed the reality of the matter. The Baht has depreciated badly against most major currencies in the last four of five years. When I first got here five years ago, it was 50 Baht to one Pound, It used be 18 Baht to one NZ$, now it is 28. It has only held it's own against the dollar, five yeas ago, it was 38 baht to one dollar. So the truth of the matter, in the long term it is going NOWHERE.

<{POST_SNAPBACK}>

marquess - Remember the days when 1,000 Baht was 20 quid...?? You knew where you were!

And do us a favour, lose the big font!!!!

[marquess]

I do not recall those times of which you speak. However, any foreigner inevesting here on a long term basis using pound or dollars or whatever, is bound to lose out with the currency depreciation. I wonder what the real long term reasons are for the Baht's long term decline?

[billd766]

Quote from the Nation this morning

BOT ON VOLATILITY: Economy and the baht ‘will hold up’

Published on December 04, 2004

Dollar’s further slide ‘no cause for alarm’

The US dollar is to weaken by a further 20 per cent, but the Thai economy should be safe, with the baht continuing to perform well, the Bank of Thailand governor said.

MR Pridiyathorn Devakula said that over the past two years the dollar has weakened by 40 per cent against the euro – from $0.94 to $1.33 to the euro.

The baht’s performance, however, has been fluctuating against the dollar, appreciating only 10 satang compared with the exchange rate at the end of last year of Bt39.30 per dollar.

“When the dollar has weakened by 40 per cent, we have still managed to survive. So if it is to fall further by 20 per cent, this should not be a big problem,” said Pridiyathorn. “But it is impossible for the baht to stay unchanged while other currencies are fluctuating. If the baht is kept stable, others will step in to speculate against it.’’

The dollar yesterday finished at Bt39.335, up from Bt39.14 at the Asian close on Thursday.

The dollar has been falling sharply against other currencies, reflecting Washington’s policy of correcting its current-account balance. Whether the weakness of the US dollar will lead to a realignment of the global currencies, or a global economic restructuring, remains to be seen.

After the 1985 Plaza Accord, which led to a sharp appreciation of the yen against the US dollar, Japanese firms began to migrate out of the country to set up factories and plants elsewhere, including Southeast Asia.

“Whether the Japanese firms will move out again also remains to be seen, but all the big companies are already established here, so the next influx should be of the small- and medium-scale enterprises,” said Prapat Phothivorakhun, chairman of the Federation of Thai Industries.

Chavalit Nimla-or, head of the federation’s textile and garment sector, said Thai exporters who have previously sold their goods at a fixed exchange rate stand to lose money from the appreciation of the baht.

“The time lag of the shipment orders is about three to five months. If the exporters sold their goods some months earlier, they now stand to lose money from collecting fewer baht from the exchange rate,” he said.

Chavalit said that, ideally for Thai exporters, the baht should stand at Bt41 against the dollar.

“But last year the baht was traded at Bt38 to the dollar, and we were fine. if it is to appreciate again, it shouldn’t be a big problem,” he added.

The Bank of Thailand has already taken measures to manipulate the economy to cope with the appreciation of the baht to certain levels. Measures to cushion the adverse effects have already been created.

In the worst-case scenario, the Thai economy could still enjoy a decent growth rate with a consumption rise of 3 to 4 per cent.

Most analysts say it is “not unlikely” that the dollar will fall by a further 20 per cent because the US is suffering a current-account deficit equivalent to 5 per cent of its gross domestic product. In 1985, the US current-account deficit was 4 per cent of GDP, with the dollar plunging even more steeply.

Dr Suphavud Saicheau, managing director of Phatra Securities Co, estimated that the baht could appreciate further from the current level of Bt37.5 to Bt38 to the dollar if the Chinese yuan appreciates by 10 per cent.

There is pressure for the yuan to undergo a revaluation to counter inflation.

As of November 26, Thailand’s international reserves stood at $48.1 billion, up $800 million from the week before. The rise in the reserves reflected the higher value of the central bank’s foreign assets and also its purchase of the dollar to prevent the sharp rise of the baht.

Anoma Srisukkasem, Thanong Khanthong

The Nation

It was said that the dollar had lost about 40% over 2 years against the Euro and that Thailand could survive another 20% and still survive.

However as the Baht seems to be tied to the USD it has only "gained" about 5% in the same period.

If you compare the Baht against the Euro or the GBP it has lost though not as much as the dollar.

I remember in 1997 when the USD was around 25 and the GBP around 44 and by the end of the year the USD was close to 50 Baht and the GBP was over 80 Baht. (The good news then was that there was much less traffic around and much less pollution as well).

Th GBP has only varied from about 68 to 75 Baht in the last 3 years and seems to be on its way up again and it has gained about 15% against the USD in the same period.

I don't know if this is a good or a bad thing but for anybody bringing in currency other than the USD it is better for them.

[sriracha john]

Perhaps a bit of over-simplification, but I put the cause of the devalued dollar at the doorstep of the White House's George W.

In that regard, I hope he gets his sh1t together as it effects my comfort here.

[Pattayaguy1999]

Perhaps a bit of over-simplification, but I put the cause of the devalued dollar at the doorstep of the White House's George W. 

In that regard, I hope he gets his sh1t together as it effects my comfort here.

<{POST_SNAPBACK}>

We all hope for a stronger dollar, but putting the blame on one man is naive. Oil prices, balance of trade figures and faith in the dollar will determine it's value. Even if W got out of Iraq tomorrow, underlying economic factors would keep the dollar from gaining much ground against most currencies. We all long for the days of 50bt to the dollar, but have to live with current reality. At least the dollar is still strong against the Vietnam dong. Perhaps it is time to move!

[marquess]

I should rather see the Baht strengthen against other currencies like the Aussie and Kiwi. As to the $ 36/40 would be fine, it would make going abroad a little cheaper in the long term.

[astral]

Talk about the way to SPIN a news item.

It is not the baht that has strengthened.

As other posters have mentioned we have only to look at the rates against the other major currencies to know that the baht is still low.

However it did need a boost against the ever diving US dollar.

Well done GWB

[marquess]

It is not the baht that has strengthened.

I think that was pointed out earlier.

[Felt 35]

Baht becomes strongest in 7 months

Talk about the way to SPIN a news item.

I think that was pointed out earlier.

Say it many enough times and people get the impression it is

Could it be the point!

[Backpack_thailand]

Remember when 1,000 Baht was 20quid...??

I do not recall those times of which you speak.

What are you like...???

Your own words....

When I first got here five years ago, it was 50 Baht to one Pound

[joinme2leave]

well, whatever. Me, counting only on Bht-euro-relevance cannot see any major favorable change so far...Bht vs euro still around 51-52. Quite disappointing as I (expected) the Bht to decline a lot more these days...