Impact Of Stong Baht

[sharecropper]

I have just been out checking the prices offered for GPB in Central Pattaya currency exchanges, and I am almost shocked. Buy 54.8 sell 56.2.

Has anyone any idea what's keeping the baht so strong? Given what's happening in Thailand, it should be sinking at about the same rate as the currencies it is outstripping, if not faster. I can't believe the government is supporting it in the currency markets.

Without a major correction, I fear for the coming high season in Pattaya, as the cost of buying Baht in the UK, US, Australia and elsewhere for potential visitors adds to the list of high air fares, the negative impact of Bangkok news and recessions in peoples' home countries - all reasons which could make this a super low high season in Pattaya.

I hope I'm wrong.

[Bizz]

I have just been out checking the prices offered for GPB in Central Pattaya currency exchanges, and I am almost shocked. Buy 54.8 sell 56.2.

Has anyone any idea what's keeping the baht so strong? Given what's happening in Thailand, it should be sinking at about the same rate as the currencies it is outstripping, if not faster. I can't believe the government is supporting it in the currency markets.

Without a major correction, I fear for the coming high season in Pattaya, as the cost of buying Baht in the UK, US, Australia and elsewhere for potential visitors adds to the list of high air fares, the negative impact of Bangkok news and recessions in peoples' home countries - all reasons which could make this a super low high season in Pattaya.

I hope I'm wrong.

The thai baht is tyrd to $

quote

I have just been out checking the prices offered for GPB in Central Pattaya currency exchanges, and I am almost shocked. Buy 54.8 sell 56.2.

You have the answer to your other question Buy 54.8 sell 56.2.

[sharecropper]

I have just been out checking the prices offered for GPB in Central Pattaya currency exchanges, and I am almost shocked. Buy 54.8 sell 56.2.

Has anyone any idea what's keeping the baht so strong? Given what's happening in Thailand, it should be sinking at about the same rate as the currencies it is outstripping, if not faster. I can't believe the government is supporting it in the currency markets.

Without a major correction, I fear for the coming high season in Pattaya, as the cost of buying Baht in the UK, US, Australia and elsewhere for potential visitors adds to the list of high air fares, the negative impact of Bangkok news and recessions in peoples' home countries - all reasons which could make this a super low high season in Pattaya.

I hope I'm wrong.

The thai baht is tyrd to $

quote

I have just been out checking the prices offered for GPB in Central Pattaya currency exchanges, and I am almost shocked. Buy 54.8 sell 56.2.

You have the answer to your other question Buy 54.8 sell 56.2.

That's a superb idea - You have the answer to your other question Buy 54.8 sell 56.2.. All I need now is to set up a Thai company, apply for a work permit, bring money into the country (at prohibitive rates) for the capital investment to set up a currency exchange, find a site, agree a lease, pay key money and rent, pay to fit it out, hire employees, apply for, wait for, pay bribes to receive (if it is even possible to receive) a currency exchange licence, and wehhey - money on a stick.

Just to clarify - the currency exchange buys a punter's GBP at 54.8 Baht per GBP, and then sells the same GBP at the higher price of 56.2 to any punter who want to buy them. That margin isn't available to non-licensed currency dealers.

[LennyW]

There is a rumour that the "Government" is being pushed to devalue the Baht by 5% to aid exports, wheather this will happen or not remains to be seen though! Small ammount but every little helps.

The Thai Baht is no stronger than it usually is, unfortunately it is the current weakness of the Pound, Aussie dollar and Euro etc. that is hurting.

We will see what happens today at the OPEC meeting, if they decide to cut production then the oil price may increase again, this in turn will lead to some gains in these currencies, we shall see.....

[gk10002000]

Baht is dropping relative to the USD. Up to 34.5 or something this morning. I have been here one week and from my point of view things are improving day by day. I miss that 42 rate I got on my first trip in 2004.

[Shotime]

The baht seems to be going in favor of the US dollar. At least a little bit. Even so, I'm not planning on visiting the city you mention anytime soon, as it always smells bad there, and it is very seedy.

Why are you bringing OPEC into this? I thought it was the fault of the US, and it's particular brand of greed? The financial crises facing the world apparently all has to do with the US and it's sub-prime lending that has led to the freefall of the pound. I sincerely feel for you Brits that have been dragged into this mess. I can't imagine having to cancel plans to visit Thailand, and especially the cultural experiences available in that city because of all this. I haven't been following the trends of the pound as I don't really care, but to cast aspersions at the Arab nations for playing with the price of oil to cause panic in the markets and peoples living in tent cities and selling apples in the street is a little much

[eyebee]

I'm not planning on visiting the city you mention anytime soon, as it always smells bad there, and it is very seedy.

So what are you doing in the Pattaya forum?

Edited October 24, 2008 by eyebee

[Cuban]

There is a rumour that the "Government" is being pushed to devalue the Baht by 5% to aid exports, wheather this will happen or not remains to be seen though! Small ammount but every little helps.

Not a rumor, it was a news item in Monday's Bangkok Post.

Quoted in part below as BP's links seldom last long.

Finance Minister Suchart Thadathamrongvej said he would like the baht currency to depreciate by five per cent to help stimulate the export sector and shoulder the economy in 2009. The economic growth for next year should stay at four percent or lower while the export growth would be no more than 10 percent due to the global economic crisis, he said.

However, Bank of Thailand (BoT) governor Tarisa Watanagase said the central bank will carry on keeping the value of Thai baht to be in line with other regional currencies... ...However, they (Thai Exporters) should adjust themselves by expanding and improving their investments.

I love the optimism in both their views.

With futher to fall, bring US Dollars not GB Pounds to spend.

[Shotime]

I'm not planning on visiting the city you mention anytime soon, as it always smells bad there, and it is very seedy.

So what are you doing in the Pattaya forum?

Nothing better to do, and I want to stand up for American greed and business practices.

What's your excuse?

[Kerryd]

Rather odd. The US is at the root of the current financial crisis, yet their $ remains strong while everyone else's seems to be weakening ! It's almost like they are being rewarded (well, I suppose the trillion dollar bail-out is a kind of reward in itself, the strong $ is just the icing on the cake).

The Canadian $ has gone down against the Baht and the US $, remarkably fast. We've lost about 5 baht to the dollar in less than 2 weeks (bloody great timing).

What is really annoying is that Canadian banks haven't been affected by the US Sub-Prime melt-down, the government decided to pump money into the banks anyways, and our $ still drops like a rock.

Meanwhile, it looks like the US $ remains hovering around 34.5 baht.

I'm obviously holding off on transferring any more currency here until things improve, but who knows when that will be ?

[silentnine]

i'm waiting to transfer 40,000 stertling in .. but at this rate of exchange its going to be a long wait i think .

and until it levels there no more lady drinks. no more 20 baht tips. no more many things.

its not affected some things yet but for sure it will.

many farangs buy there farang treats from viking, freindship or other places like that. all the prices on these goods will surely rise very soon. a tin of baked bean will cost more than 100 baht the ways its going .

maybee it will level out low. if it does then many expats will have to reshuffle there way of life to fit lower budgets. but we will all sit and hope it get back up to the 68 mark and rush and change 1000's i think

[Groongthep]

We will see what happens today at the OPEC meeting, if they decide to cut production then the oil price may increase again, this in turn will lead to some gains in these currencies, we shall see.....

Why are you bringing OPEC into this? ............ I haven't been following the trends of the pound as I don't really care, but to cast aspersions at the Arab nations for playing with the price of oil to cause panic in the markets and peoples living in tent cities and selling apples in the street is a little much

Actually Shotime, LennyW is right. If OPEC cuts production it will increase the price of oil which has traditionally been traded for in US dollars. With higher oil prices countries around the world will have to spend more of their $ reserves to pay the OPEC countries for the higher priced oil and which will therefore put downward pressure on the dollar since countries with fewer $ in reserve will have less reason to value it against there own currency (i.e. if they have more $ they want it to be worth more). This is exactly the situation which occurred earlier this year when oil was above 120 USD to the barrel and the dollar fell like a rock. Remember 31 baht to the dollar not too may months ago? With the current price of oil back down below 70 USD per barrel the dollar has begun increasing in value again against most other world currencies including the euro, pound sterling and baht. Many economists expect this roller coaster ride of price volatility to continue until the global economy settles back down and confidence in the markets (both stock and commodity) is restored. When exactly that might be is anyone's guess.

Edited October 24, 2008 by Groongthep

[LennyW]

Anyone of a nervous disposition DONT look at CNBC right now!!!! Wow, GBP, EUR, JPY, AUD to name but a few are taking a huge thrashing!!!! GBP down 5% against the dollar today already!!!!!!! Ooooooooh

[Soutpeel]

Rather odd. The US is at the root of the current financial crisis, yet their $ remains strong while everyone else's seems to be weakening

Its a conspirancy, the illuminati, New work order....US$ to be the world currency and continue with its quest for global domination...

[LennyW]

OPEC has cut production by 1.5 Million Barrels so lets see how that does.....

[monty]

All currencies getting a bloody trashing right now, the OP mentioned 54.8 Baht/1GBP in the morning, at 15:50 the cash buying rate down to 52.68 or more then 2 Baht down

Euro cash down under 43 Baht now...

[syd barrett]

I am trying to look at this currency crisis in a different way:

My accepted exchange rate has been 65=1 GBP if it went up to 70 I felt better, if it reduced to 60 I felt a bit more anxious.

Now we are seeing the THB reduce to 53= 1 GBP and probably sub 50= 1 GBP is coming.

I assess the situation as this. My monthly allowance is 50,000 THB at 65= 1 GBP this equals 770 GBP per month

For every baht the exchange rate falls beneath 65 then my monthly loss = 12.70 GBP

So at 50 THB= 1 GBP I am 190 GBP worse off per month = about 2,300 GBP per year.

However with careful savings, and a reduction of non essential luxuries I can reduce my spending by 90 GBP per month so that in real terms my yearly loss is just 1,200 GBP per year.

So not the end of the world?

[looby]

but it is very worrying for us, we are waiting to transfer the remainder of our house buying balance and i am watching daily for any positive sign.

on a smaller scale it's a bit of a bind, but when it's thousands of pounds sterling it can make a huge impact. i just hope the situation improves before our final balance due.

i don't mind economising when in pattaya, anyway let's be honest it's very easy to eat very cheaply with fabulous thai food so it's not too bad i think when there.

fingers crossed for an improvement (might as well go for superstition, nothing else seems to be working!!)

[monty]

All currencies getting a bloody trashing right now, the OP mentioned 54.8 Baht/1GBP in the morning, at 15:50 the cash buying rate down to 52.68 or more then 2 Baht down

Euro cash down under 43 Baht now...

Almost another Baht shaven of at 16:45n now down to 51.81 (Bkk Bank)

[Ungabunga]

Friend of mine just transferred 25K GBP for payment on a house... it cleared today and got 53 THB/£ at Siam Commercial bank...

Made a difference of 300,000 THB from what he had estimated earlier this week... OUCH!

Edited October 24, 2008 by Ungabunga

[Slogger]

The Thai baht is 'tied' to the dollar within certain limits, not fixed. this means generally the both move together but not necessarily at the same rate - ie. they can still vary between each other within limits - then the BOT can step in to keep it that way.

The baht's strength against the pound results largely from the weakness of the pound and the relative strength of the dollar. The big question is not why is the baht so strong, but why is the dollar so strong? Maybe the dollar now follows the baht?

[JimmyTheMook]

Friend of mine just transferred 25K GBP for payment on a house... it cleared today and got 53 THB/£ at Siam Commercial bank...

Made a difference of 300,000 THB from what he had estimated earlier this week... OUCH!

That is a huge loss - I'm still waiting on bringing some cash over.....

[midas]

Well surely the Thai Baht would not stay this strong

if this happened ..................?

Todays Bangkok Post

'A matter of time'

Coup fears are rife and some believe it is just a matter of time before the tanks are again on Bangkok streets. ANALYSIS By Wassana Nanuam

Despite widespread rumours of another military coup, Prime Minister Somchai Wongsawat has left the country on a trip to Beijing, apparently confident that that it is only idle speculation.

The rumours have been intensifying since army chief Gen Anupong Paojinda went on national television last week to urge Prime Minister Somchai Wongsawat to resign over the violent suppression of People's Alliance for Democracy protesters by police on Oct 7. He was accompanied by the chiefs of the navy, air force and police force.

Mr Somchai refuses to resign.

"Right now, people fear there may be another coup," said Chulalongkorn University political analyst Panitan Wattanayagorn on Thursday.

"Relations between the military leaders and Prime Minister Somchai Wongsawat have soured. I think that under such circumstances everything seems to point to a coup.

"It is only a matter of time."

If the military took over it would lead to the formation of a national government of unity which would bring all parties together, he said. But it must be done quickly to avoid possible political chaos.

Mr Somchai flew to Beijing on Thursday to attend the two-day summit of the Asia-Europe Meeting that begins on Friday.

It is Mr Somchai's first foreign trip since he was sworn in to office.

The situation is similar to the lead-up to the Sept 19, 2006 coup when former prime minister Thaksin Shinawatra was in New York to address the United Nations general assembly.

The army took advantage of his absence to topple his government.

An army source said the army is keeping an eye on Mr Thaksin's plan for a phone-in interview during a talk show on NBT on Nov 1. He might criticise some important people, the source said.

Gen Anupong on Tuesday signed an order changing the assignments of 141 colonels in three powerful regiments based in Bangkok. Although it was a seasonal reshuffle, the officers control the forces that are the key to a coup.

"The military does not want to stage a coup. In this situation, there is no knowing how to solve the problem. Everyone is now speaking of a coup as a solution," said the commander of an infantry regiment in Bangkok, who asked not to be named.

Former deputy police chief Salang Bunnag's plan to reclaim Government House from the PAD is also seen as a factor contributing to a possible coup.

He has announced plans to mobilise government su

[tropo]

I'm not planning on visiting the city you mention anytime soon, as it always smells bad there, and it is very seedy.

So what are you doing in the Pattaya forum?

Nothing better to do, and I want to stand up for American greed and business practices.

What's your excuse?

When you're in Pattaya do you camp over a storm drain?

[tropo]

The Thai baht is 'tied' to the dollar within certain limits, not fixed. this means generally the both move together but not necessarily at the same rate - ie. they can still vary between each other within limits - then the BOT can step in to keep it that way.

When did the Thai baht become fixed or tied to the USD?

You must have dreamt that up.

Check out this graph and see for yourself.

[sharecropper]

Interesting discussion. Perhaps today's 7% drop in the Thai stockmarket ( a jaundiced beast at best) might help redress the balance. But I suspect not, as I feel there is something more than market forces at play here.

[KhunTao]

I expect the Baht to nosedive against the USD, from its current level of 34-35 against the USD to around 50 by year-end 2009.

Reasons are; (1) the diference between USD inflation (running at around 2-3% p.a.) and Baht inflation (running at around 15-17% p.a.), (2) negative real interest rates in Baht (i.e. inflation rate exceeds interest rate, basically implying that borrowers of Baht receive a subsidy ....), (3) the general flight from emerging markets currencies in the context of the current financial crisis, and finally (4) country specific considerations, eg. the political crisis in Thailand where a military coup appears to be the only viable way out of the stalemate.

It looks to me that the Baht has defied gravity for some time, and gravity will catch up during the remainder of 2008 and 2009. If you can, (i) convert as much Baht as you can into convertible currency at these still attractive FX rates resp. (ii) leverage as much as you can in Baht.

These turbulent times are when serious money is being made ... One man´s misfortune is another man´s lunch.

Edited October 24, 2008 by KhunTao

[sharecropper]

I expect the Baht to nosedive against the USD, from its current level of 34-35 against the USD to around 50 by year-end 2009.

Reasons are; (1) the diference between USD inflation (running at around 2-3% p.a.) and Baht inflation (running at around 15-17% p.a.), (2) negative real interest rates in Baht (i.e. inflation rate exceeds interest rate, basically implying that borrowers of Baht receive a subsidy ....), (3) the general flight from emerging markets currencies in the context of the current financial crisis, and finally (4) country specific considerations, eg. the political crisis in Thailand where a military coup appears to be the only viable way out of the stalemate.

It looks to me that the Baht has defied gravity for some time, and gravity will catch up during the remainder of 2008 and 2009. If you can, (i) convert as much Baht as you can into convertible currency at these still attractive FX rates resp. (ii) leverage as much as you can in Baht.

These turbulent times are when serious money is being made ... One man´s misfortune is another man´s lunch.

I agree with you - i just read a headline in the UK - 'Worst financial crisis in human history': Bank boss's warning as pound suffers biggest fall for 37 years - Firstly, OUCH, and secondly, that news can come as a shock to nobody, and I think it is already priced into the currency markets, but I am not wealthy enough to bet on it. As you say, those who can, hedge funds and the like, will reap big rewards by dealing in turbulence, but it is a dangerous game for your impecunious individual.

[torrenova]

Sent some GBP over in July at around 65 and then it hit low 60's and I had some cash lying around in GBP I didn't want to change at low 60's. Guess I'll not be changing it at 50 to £1 anytime soon.

Down 20% in 2 months and down 32% from high north of 74.

I never thought much of it as being above 60 (my post 1997 average) but newcomers expecting 70 or so must be killing themselves at 51 !

[tropo]

Sent some GBP over in July at around 65 and then it hit low 60's and I had some cash lying around in GBP I didn't want to change at low 60's. Guess I'll not be changing it at 50 to £1 anytime soon.

Down 20% in 2 months and down 32% from high north of 74.

I never thought much of it as being above 60 (my post 1997 average) but newcomers expecting 70 or so must be killing themselves at 51 !

What's the point of comparing with a high point and getting depressed about it. The GBP has had a good ride, now it is coming down to a more realistic level.

As a non-Brit I'm pretty happy about it because it will serve to keep away a lot of the British riff-raff running around town giving Farang a very bad name. The more afluent Brits will continue to enjoy life in Thailand as usual.

The people you really need to be sorry for are the Aussies whose dollar has dropped about 30% in only a few months.

OK Brits, fire away!

Edited October 24, 2008 by tropo