How Long Before Baht Plummets ?

[easybullet3]

can anyone tell me why the thai baht has been pretty much unaffected by the past political turmoil? (especially that the airport was blockaded for a week) the baht barely dropped!!! (i'm comparing it to the pound and the dollar).

i heard somewhere that thailand has MASSIVE gold reserves or surplus cash. (does this have any baring on the situation, and can it run dry)?

i am just suprised that after 6 months of political uncertainty and especially the past airport siege AND world-wide economic depression, that the thai baht has pretty much kept its value!!!

can anyone explain this?

and also any predictions for the upcoming future of the baht?

basically, is thailand just delaying its economy collapse becasue of its reserves? or is it truly lucky enough to be unaffected?

[patklang]

thaksin money is holding the baht up lol.the government have nicked it back.

[MJP]

can anyone tell me why the thai baht has been pretty much unaffected by the past political turmoil? (especially that the airport was blockaded for a week) the baht barely dropped!!! (i'm comparing it to the pound and the dollar).

i heard somewhere that thailand has MASSIVE gold reserves or surplus cash. (does this have any baring on the situation, and can it run dry)?

i am just suprised that after 6 months of political uncertainty and especially the past airport siege AND world-wide economic depression, that the thai baht has pretty much kept its value!!!

can anyone explain this?

and also any predictions for the upcoming future of the baht?

basically, is thailand just delaying its economy collapse becasue of its reserves? or is it truly lucky enough to be unaffected?

Fitch Ratings as well as Standard & Poor's have just downgraded Thailand to 'negative' from 'stable'.

Mind you they'll probably downgrade the UK to 'f.vcked' from 'up 5h1t creek without paddle'.

[misterman21]

Dont forget to factor in what is happening in the UK.....BOE meet again soon for a likely interest rate cut....bang thats another few Baht wiped off the pound...BOT should devalue but unless they do the pound may be low for quite a while. 70 by Jan... ...that would be great but not realistic

Why should be great? All imported things, electronics, imported food, even gasoline would be twice the price if this gonna happen.

The dumbest input yet!

[misterman21]

Ok, lets put an end to all the wannabe economist ideas on why the Baht is so strong!

May be a bit much for the average dumb expat with a changover - but here goes: The IMF put strict restrictions on Thai Banks with regards to lending following the 97 crash. They have only been allowed to loan 90% of the total amount of deposits. In other words if you put 1000 baht into a Thai bank then they could only loan out 900 baht. Oh, I hear you say that can't be right as that would leave the bank with only 100 baht.

Ok, lets just add a little and explain the way the rest of the planet has been operating: If you put $1000 into a Yank Bank (eg.) then they could - and did loan out 9 x the deposit in other words $9000.

So just for the simpletons - if you deposit $1000 in a Thai Bank then they can loan out $900 - in a Yank Bank that figure is $9000. So the Thais have not been exposed to the lunacy adopted by most of the rest of the world banking system. (Not by choice, may I add)

[SidFernwilter]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

Edited December 5, 2008 by SidFernwilter

[chiang mai]

Ok, lets put an end to all the wannabe economist ideas on why the Baht is so strong!

May be a bit much for the average dumb expat with a changover - but here goes: The IMF put strict restrictions on Thai Banks with regards to lending following the 97 crash. They have only been allowed to loan 90% of the total amount of deposits. In other words if you put 1000 baht into a Thai bank then they could only loan out 900 baht. Oh, I hear you say that can't be right as that would leave the bank with only 100 baht.

Ok, lets just add a little and explain the way the rest of the planet has been operating: If you put $1000 into a Yank Bank (eg.) then they could - and did loan out 9 x the deposit in other words $9000.

So just for the simpletons - if you deposit $1000 in a Thai Bank then they can loan out $900 - in a Yank Bank that figure is $9000. So the Thais have not been exposed to the lunacy adopted by most of the rest of the world banking system. (Not by choice, may I add)

That was partially accurate during the time that the IMF loan was outstanding but that loan was repaid in full during the Thaksin premiership.

[chiang mai]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

Who is they?

[easybullet3]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

who is 'they'? whats your source?

(i'm genuinely interested)

[VegasVic]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

I'm also not quite sure who "they" are? I can tell you one thing though and that is that Ms. Tarissa is one very tough and stubborn lady She has stayed the course so far and I don't see her giving up just yet, because when she does throw in the towel I don't think the dollar will go to 38-39, it will be more like 45+, and she knows this that is why she has drawn the line in the sand! I think that Ms. Tarissa and the BOT board of governors will keep the baht/Dollar rate in the 35-36 range, but Sterling will likely hit the upper 40's anyway

[misterman21]

Ok, lets put an end to all the wannabe economist ideas on why the Baht is so strong!

May be a bit much for the average dumb expat with a changover - but here goes: The IMF put strict restrictions on Thai Banks with regards to lending following the 97 crash. They have only been allowed to loan 90% of the total amount of deposits. In other words if you put 1000 baht into a Thai bank then they could only loan out 900 baht. Oh, I hear you say that can't be right as that would leave the bank with only 100 baht.

Ok, lets just add a little and explain the way the rest of the planet has been operating: If you put $1000 into a Yank Bank (eg.) then they could - and did loan out 9 x the deposit in other words $9000.

So just for the simpletons - if you deposit $1000 in a Thai Bank then they can loan out $900 - in a Yank Bank that figure is $9000. So the Thais have not been exposed to the lunacy adopted by most of the rest of the world banking system. (Not by choice, may I add)

That was partially accurate during the time that the IMF loan was outstanding but that loan was repaid in full during the Thaksin premiership.

Rubbish - that is hard fact to this day. Why talk such rubbish!

[chiang mai]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

I'm also not quite sure who "they" are? I can tell you one thing though and that is that Ms. Tarissa is one very tough and stubborn lady She has stayed the course so far and I don't see her giving up just yet, because when she does throw in the towel I don't think the dollar will go to 38-39, it will be more like 45+, and she knows this that is why she has drawn the line in the sand! I think that Ms. Tarissa and the BOT board of governors will keep the baht/Dollar rate in the 35-36 range, but Sterling will likely hit the upper 40's anyway

I think some folks are beginning to warm to the idea, as outrageous as it once seemed, that the GBP is not going to tank so badly after all. Did someone recently actually suggest par, hmmm!

[MJP]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

I'm also not quite sure who "they" are? I can tell you one thing though and that is that Ms. Tarissa is one very tough and stubborn lady She has stayed the course so far and I don't see her giving up just yet, because when she does throw in the towel I don't think the dollar will go to 38-39, it will be more like 45+, and she knows this that is why she has drawn the line in the sand! I think that Ms. Tarissa and the BOT board of governors will keep the baht/Dollar rate in the 35-36 range, but Sterling will likely hit the upper 40's anyway

I think some folks are beginning to warm to the idea, as outrageous as it once seemed, that the GBP is not going to tank so badly after all. Did someone recently actually suggest par, hmmm!

I too think GBP has bottomed.

Let's look at history. Throughout the 1990's, okay from 1991 say to the Tiger crash of 1997, GBP was 38-40 THB. Well, during that period the UK was in a relatively isolated recession, big house price crash and lots of government disasters mainly due to an attempt at monetary union with Europe.

At the same time, Thailand was at the centre of an incredible credit bubble based boom, a kind of mini version of what we see today. Upon implosion, THB at one point hit 96 to GBP.

Okay, the UK is in a pretty dire condition at present but it's not in isolation. Most of the poisons have hatched in the UK economic mud. The FX markets know this. Thailand on the other hand is just beginning to experience this global catastrophe. On top of which the political chaos, not instability but chaos is already causing the markets to consider Thailand a risk.

Fitch, the ratings agency, along with Standard & Poor's, last week downgraded dear old LOS to 'negative' from 'stable'. This will take a little time to work through the markets, but it will raise eyebrows in a volatile market.

Hugh Hendry, the hedge fund manager, said in a Bloomberg interview very recently that 'emerging market currencies were liable to collapse, 300-400%'. So take heart. I'm not saying this will be the case with Thailand, but it would suggest an easing of downward pressure on GBP.

THB is still heavily linked to the Dollar when it comes to pricing other currencies. PIMCO last week called the end to the slide in GBP vs. USD.

Remember, LOS is not that competitive any more. I would say the cost of business there have risen dramatically over the past few years and their protectionist stance will no longer go down well with western governments. The FTA with the US has been extended for another year, but under Obama I doubt this will continue into 2010.

On the ground, Thailand's looking expensive. The inflation experienced there was summed up to me by a well educated ex-pat of some 25 years recently, "The cost of living in Thailand has doubled".

The global 'downturn' as the BBC so tritely refer to it, is just that. Global. All things being both equal and relative, I'm bearish on THB.

Don't expect GBP to rise dramatically, but I think we've already seen the big falls in the Pound. I for one an not expecting anything spectacular.

Edited December 6, 2008 by MJP

[ged]

What ,what ,what ? Am i A bit fick or does the last post start off saying the pound wiil gain against the baht then says the baht will gain on the pound,

sorry only a layman.

[IMA_FARANG]

estimated that pound would go down 12% against $ and 8% against euro.

baht is tied to $, so do not expect miracles, even if baht falls against $

Nonsense, the baht is not tied to the $. It has fluctuated more than 10 baht over the last 4 years.

The Thai government sets the official Baht rate against a package of currencies, including the U.S. dollar and other international currencies. The official bank rates are determined by these currencies, but it is still possible for the rate of the Baht on currency markets to fluctuate. I believe the Baht rate is also influenced by the sterling rate as part of that currency package.

A lot of it depends on judgement by currency brokers who decide on what currency is likely to rise, and what currency is likely to fall based on their estimates (guesses, some say) of what the national economies of these countries will do. The pound is under pressure right now...a lot of people believe the downturn in the U.K. will be more severe than other countries in the E.U. and worldwide.

[cclub75]

The global 'downturn' as the BBC so tritely refer to it, is just that. Global. All things being both equal and relative, I'm bearish on THB.

Don't expect GBP to rise dramatically, but I think we've already seen the big falls in the Pound. I for one an not expecting anything spectacular.

Then you could expect something spectacular... the other way.

With the "nuclear option" from the BOE it's almost guaranteed.

http://www.telegraph.co.uk/finance/economi...-injection.html

[MJP]

The global 'downturn' as the BBC so tritely refer to it, is just that. Global. All things being both equal and relative, I'm bearish on THB.

Don't expect GBP to rise dramatically, but I think we've already seen the big falls in the Pound. I for one an not expecting anything spectacular.

Then you could expect something spectacular... the other way.

With the "nuclear option" from the BOE it's almost guaranteed.

http://www.telegraph.co.uk/finance/economi...-injection.html

That is a big worry. Can't help but feel they've already done this with all the money market pumping and bailouts.

[Heng]

Just broke 38 early today!

edit:

Edited December 7, 2008 by Heng

[george]

Just broke 38 early today!

edit:

Really? Do you have any URL?

[misterman21]

Just broke 38 early today!

edit:

Really? Do you have any URL?

35.65

[taxexile]

heng still thinks he's in texas , where everything is bigger and better than it actually is.

[VegasVic]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

I'm also not quite sure who "they" are? I can tell you one thing though and that is that Ms. Tarissa is one very tough and stubborn lady She has stayed the course so far and I don't see her giving up just yet, because when she does throw in the towel I don't think the dollar will go to 38-39, it will be more like 45+, and she knows this that is why she has drawn the line in the sand! I think that Ms. Tarissa and the BOT board of governors will keep the baht/Dollar rate in the 35-36 range, but Sterling will likely hit the upper 40's anyway

I think some folks are beginning to warm to the idea, as outrageous as it once seemed, that the GBP is not going to tank so badly after all. Did someone recently actually suggest par, hmmm!

I have seen multiple posts here on thaivisa that predicted the possibility that the Pound could see par with the Dollar, but I have always been in the camp that the Pound will bottom around $1.35 and the Euro around $1.20 vs. the Dollar. As far as the part about "the GBP is not going to tank so badly after all", I wonder just what you consider "not so badly"? I mean after all, the Pounds value has droped from over $2 to $1.46 in less than 5 months, I am not certain just what the threshold is for not tanking so badly, but I think that most people who have been holding Sterling or Sterling denominated assets over the past 5 months might differ from your view of just what tanking means

[chiang mai]

Just broke 38 today, 0.38 against the YEN.

[chiang mai]

They expect the Baht to be 38-39 to the Dolloar first quarter next year and 48-49 to the Sterling...

I'm also not quite sure who "they" are? I can tell you one thing though and that is that Ms. Tarissa is one very tough and stubborn lady She has stayed the course so far and I don't see her giving up just yet, because when she does throw in the towel I don't think the dollar will go to 38-39, it will be more like 45+, and she knows this that is why she has drawn the line in the sand! I think that Ms. Tarissa and the BOT board of governors will keep the baht/Dollar rate in the 35-36 range, but Sterling will likely hit the upper 40's anyway

I think some folks are beginning to warm to the idea, as outrageous as it once seemed, that the GBP is not going to tank so badly after all. Did someone recently actually suggest par, hmmm!

I have seen multiple posts here on thaivisa that predicted the possibility that the Pound could see par with the Dollar, but I have always been in the camp that the Pound will bottom around $1.35 and the Euro around $1.20 vs. the Dollar. As far as the part about "the GBP is not going to tank so badly after all", I wonder just what you consider "not so badly"? I mean after all, the Pounds value has droped from over $2 to $1.46 in less than 5 months, I am not certain just what the threshold is for not tanking so badly, but I think that most people who have been holding Sterling or Sterling denominated assets over the past 5 months might differ from your view of just what tanking means

You are right of course! But looking at values today and anticipating what they might be going forward I reckon 1.40 ish is actually very OK. Looking backwards, the Pound was always believed, by sane folks at least, to be massively overvalued at 2.10 and even 1.80 was a bit rich. So it all comes back to the " dangerous trading zone" of 1.40/1.80 because this is the zone in which GBP represents fair value and its risky to try and make a profit in this range. If GBP stays within this range then I reckon it has performed, "not so badly".

[FarangFatal]

estimated that pound would go down 12% against $ and 8% against euro.

baht is tied to $, so do not expect miracles, even if baht falls against $

Nonsense, the baht is not tied to the $. It has fluctuated more than 10 baht over the last 4 years.

4o Baht to a dollar sound fine to me.My retirement plans in BKK were based on Baht at 40 to a dollar. It was down to 31.8 a few months back. Back up to 35.4 now. Just waiting for 40 and its retirement visa time.

Hope, hope.

**********

Firstly you have received some very bad planning info if you have a set exchange rate for overseas retirement! Very BAD

Now, as to the exchange rate the USD has gone from 29 to 36 in , what, 10 months.... Like I say, happy days are here again!

[Martian]

estimated that pound would go down 12% against $ and 8% against euro.

baht is tied to $, so do not expect miracles, even if baht falls against $

Nonsense, the baht is not tied to the $. It has fluctuated more than 10 baht over the last 4 years.

4o Baht to a dollar sound fine to me.My retirement plans in BKK were based on Baht at 40 to a dollar. It was down to 31.8 a few months back. Back up to 35.4 now. Just waiting for 40 and its retirement visa time.

Hope, hope.

MEEEEE TOO, except that the new 400,000 for a foreign man with a Thai wife sounds much better (since I am in that category). Having 800,000 might be an even better back up in case something goes south with the wife....but not likely, for now anyway.

Regards

[Martian]

estimated that pound would go down 12% against $ and 8% against euro.

baht is tied to $, so do not expect miracles, even if baht falls against $

Nonsense, the baht is not tied to the $. It has fluctuated more than 10 baht over the last 4 years.

4o Baht to a dollar sound fine to me.My retirement plans in BKK were based on Baht at 40 to a dollar. It was down to 31.8 a few months back. Back up to 35.4 now. Just waiting for 40 and its retirement visa time.

Hope, hope.

**********

Firstly you have received some very bad planning info if you have a set exchange rate for overseas retirement! Very BAD

Now, as to the exchange rate the USD has gone from 29 to 36 in , what, 10 months.... Like I say, happy days are here again!

You are correct about pegging a certain exchange rate to maintaining a retirement isn't good. The 40 Baht per dollar is the benchmark I and I assume Ima_frang is using to make the decision to transfer an amount enough to qualify for the "money in the bank" retirement visa requirement. Those using the "monthly income" option for a retirement visa are much more exchange rate risk exposed than "money in the bank" visa holders.

Many Brits are now facing a problem meeting the 65,000 Baht per month income requirement for their next retirement visa due to the Pound's decline. Aside from the risk (?) of having a large sum of money in a Thai bank for the "money in the bank option", the "monthly income" option is much more riskier with regard to maintaining retirement visa qualification since exchange rates can, and will, fluctuate greatly for some time going forward.

Regards

Edited December 7, 2008 by Martian

[bendix]

I love these financial threads. They are completely driven solely by the posters' wishful thinking and absolutely nothing to do with realism.

[MJP]

I love these financial threads. They are completely driven solely by the posters' wishful thinking and absolutely nothing to do with realism.

Hope comes in many forms my friend.

(In the UK it's a welfare application form DSS182)

Edited December 8, 2008 by MJP

[think_too_mut]

I love these financial threads. They are completely driven solely by the posters' wishful thinking and absolutely nothing to do with realism.

Yes, with soc-realism that is coming to the of rescue of capitalisam. A Soviet type of rescue. What a humiliation.