The Arse Falling Out Of The Thai Baht Is Long Overdue!

[Ricardo]

Exports from Thailand will drop like a stone ( its already on the way ) .i dont think they realise the seriousness of this, but im betting they will, . does anyone know a foreigner that has bought a high priced item in the last 3 months, house ? car ? ,.

Well I bought an imported can of baked-beans, for 45 Baht in Rimping last week, but am not yet sure what route I will use long-term to finance this major investment.

[MJo]

Is it just me that hates seeing "Discuss" on the end of forum postings?

The value of the baht hasn't changed much but the pound has crashed after a long period of being very strong. There is no reason why the British (or others) should find Thailand to be dirt cheap just because they are used to it.

Agree, it's not the baht its GBP. I'm getting much better rate for my euros now than earlier this year. Back in the 50's lately... Maybe it was a costly mistake for UK not to join euro zone 10 yrs ago ?

But you can't base historical values on such a new currency.

The bt is overvalued full stop. It's being supported.

The pound is undervalued full stop, due to distortion in the money markets, basically many investments had to be sold up and returned to dollars or yen.

It's extremely beneficial to UK to have such a low exchange rate at present. It's extremely damaging for Thailand to have such a high exchange rate,

Ill informed posting in my view.

Euro / Baht rate has been pretty much the same for the past 10 years, so baht has been overvalued and supported for past 10 yrs?

Pound might be undervalued at the moment or then correctly valued for the moment taking into account interest rate differences between UK and ECB and the state of UK economy at the moment? Definedly damaging to Thailand in the eyes of british business/tourists but not so much in the eyes of business/tourists from euro zone. Business as usual, no change in costs due rates...

However UK is attractive destination for europeans at the moment who want value for their money, together with USA and Island

[imaneggspurt]

imaneggspurt said: "does anyone know a foreigner that has bought a high priced item in the last 3 months, house ? car ? ,. "

Yes, I know somebody: ME...

WHY?

I bought a brand new big bike last month, and I'm very happy with it!

No problem at all for me...

And I know other Farangs that did the same...

My incomes are based on the Euro, not on the GBP...

And living today is better than "maybe" living tomorrow (IMHO)!

Cheers,

Gobs

hey gobs, bikes dont count, they are our toys and are exempt from any crisis,

[benjamat]

i dont understand

why Australian $fall

so much but thai BATH

stays same

As said in these posts, the baht is linked by thai govt to the dollar. The dollar has not fallen over the crisis but most other countries have. The pound is not linked to the dollar. So baht = dollar = strong. Frankly this is not only bad for tourists and investors but for thailand also.

By the way there is no logical reason for the dollar to be strong, it should actually be at least no better than other major currencies. This is a perfect example of how a small umber of very rich and powerfull people and organisations can neffectively control the finances of the world. Remember black wednesday in uk, all cased by these same people.

If it doesnt worry you it should.

[wackysleet]

I

GBP/THB was 35 for a long time then fell in 1997 after the Asian crisis - maybe the currency is now returning to it's old levels.

The baht was trading at 25 before the float in July '97 (unless my memory's playing tricks).

I lived here in 97 and the rate was 37.10 to the pound and when the crap hit the fan and you were holding GBP you could get a very healthy return on your money.

[yabaaaa]

Exports from Thailand will drop like a stone ( its already on the way ) .i dont think they realise the seriousness of this, but im betting they will, . does anyone know a foreigner that has bought a high priced item in the last 3 months, house ? car ? ,.

Does car and condo count? Car 705000 Honda kindly upped the price 10000 a month before I arrived!!

[mommysboy]

i dont understand

why Australian $fall

so much but thai BATH

stays same

As said in these posts, the baht is linked by thai govt to the dollar. The dollar has not fallen over the crisis but most other countries have. The pound is not linked to the dollar. So baht = dollar = strong. Frankly this is not only bad for tourists and investors but for thailand also.

By the way there is no logical reason for the dollar to be strong, it should actually be at least no better than other major currencies. This is a perfect example of how a small umber of very rich and powerfull people and organisations can neffectively control the finances of the world. Remember black wednesday in uk, all cased by these same people.

If it doesnt worry you it should

$ is strong because of so called de -leveraging which I can neither spell seemingly nor fully understand, but results in investments being returned to the default currency. Thus, everyone piles out of pounds and in to dollars. Also yes, speculators have a field day.

[thaibeachlovers]

It's artifically inflated.

Tourists don't want to come here cause the exchange rate is <deleted>.

It seems all currencies and economies are being devastated but Thailand is still maintaining itself... somewhat.

Discuss.

The Baht is being supported against USD, it's not being supported against GBP because there is no need.

(GBP/THB is determined via USD/THB and the relationship of GBP to USD)

Tourists do seem to still want to come to Thailand, only those that can't seem to afford it any longer don't want to come and that may not altogether be a bad thing.

GBP/THB was 35 for a long time then fell in 1997 after the Asian crisis - maybe the currency is now returning to it's old levels.

Whatever the baht was before is irrelevant now in being able to afford a holiday in Thailand, or not. When I started going to Thailand, the rate was 45 to £, but everything was half the price in baht. So, allowing for the fact that my wages have gone up very little due to low inflation rate in UK over past 10 years, I'd be better off at a rate of 45 and 1990s prices, than I am at 51 with todays baht prices.

[Naam]

35.57 this morning is hella fat compared to the 29-30 we had to deal with for part of last year.

is the stuff legal that you ingest

[LaoPo]

Euro / Baht rate has been pretty much the same for the past 10 years, so baht has been overvalued and supported for past 10 yrs?

If you consider Baht 49 swinging to Baht 53.72 back to 43.50 and now 48.41 to 1 Euro in the past year alone "a pretty much the same-rate to the Euro" you are correct....swinging more than 20% in 1 year is pretty much the same rate in your view....right.

12 months chart Euro - Thai Baht

LaoPo

[imaneggspurt]

Exports from Thailand will drop like a stone ( its already on the way ) .i dont think they realise the seriousness of this, but im betting they will, . does anyone know a foreigner that has bought a high priced item in the last 3 months, house ? car ? ,.

Does car and condo count? Car 705000 Honda kindly upped the price 10000 a month before I arrived!!

I should have stressed,bought with GBP,. ?

[Naam]

Euro / Baht rate has been pretty much the same for the past 10 years, so baht has been overvalued and supported for past 10 yrs?

If you consider Baht 49 swinging to Baht 53.72 back to 43.50 and now 48.41 to 1 Euro in the past year alone "a pretty much the same-rate to the Euro" you are correct....swinging more than 20% in 1 year is pretty much the same rate in your view....right.

pretty much the same is the weight of my wife. when we married nearly 30 years ago she was 46kg, now she is 64kg but unlike the Baht she has not lost any purchase power

[jdrake72]

Thai Baht rising steadly in the past couple of days (last day before holiday and first day after holiday), I use the buying rates at the SCB now 34.33 baht per dollar and 47.5 per euro , only 2 days before (days with Thai stock exchange working) rates at the same bank were: 34.6 per dollar and 49.2 per euro.

Baht has risen also against yen, yuan and any other world currency in the past couple of days.

yes, Thai baht is highly overestimated, probably one of the most ovesrestimated currencies in the world, exports are crushing, politics is amongst the most unstable in the region, tourism is diving and most of the foreign reserves have a maturity of 1-2 months. When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

We don t know and they probably also don t know how much would be without the BOT controls/peg, I am sure BOT fears with a free floating there could be panic and speculation which could make the baht dive.

Today there is a meeting and new PM is probably telling to Tarisa how much the artificial value of the Baht is affecting the country.

Edited January 5, 2009 by jdrake72

[Ricardo]

Today there is a meeting and new PM is probably telling to Tarisa how much the artificial value of the Baht is affecting the country.

This might be an appropriate moment, for us Brits (plus anyone else who cares to join in) to start praying, very hard !

[jdrake72]

Today there is a meeting and new PM is probably telling to Tarisa how much the artificial value of the Baht is affecting the country.

This might be an appropriate moment, for us Brits (plus anyone else who cares to join in) to start praying, very hard !

Bad news.

I have some rumors from the result of the meeting: the Government will not intervene and it will let the BOT following this terrible and stupid policy on keeping the baht at an artificial value, actually, baht is rising like crazy against any world currency now...

47.0 per euro (4% in 2 days) and 34.3 per dollar buying rates at SCB (I use the same reference not to mix rates from different banks). So, the baht is actually rising against any currency , the only one to have increased against the dollar in the past 2 days.

When the dollar goes up, the baht is stable or rise against the dollar, when the dollar plunge, it also plunges aginst the baht (as for late december when it plunged from 35.4 to 34.0 in few days, always buying rates at SCB as reference)...so in few words, baht almost always rises, the worse the terrible economic news coming, the more baht is rising.

All that makes unavoidable that when it will not be possible to keep this stupid peg anymore (when reserves will more drained up) , the baht will drop like a stone and the 1997 scenario will repeat.

Nobody wants to invest in a country under such conditions, knowing the high risk to have its investiment slashed after a devaluation.... This government is doing all the opposite it should do to avoid another 1997. t looks they want to see it again,

Read this :

http://thaicrisis.wordpress.com/

Edited January 5, 2009 by jdrake72

[monty]

I've been following this strange strength of the Thai Baht with interest.

I'm not an economist by any means, but I do understand some basics of economic rules.

Now most people are saying (or thinking) the Bank of Thailand (BOT) is propping up the Thai Baht. So normally they would do this through buying Thai Baht using their foreign currency's reserves.

Which they actually did during the '97 crisis, until they eventually simply ran out of foreign currencies and the whole thing collapsed.

Now today I've been following the level of the foreign reserves with a sharp eye, and against what people would think, they are rising. Have been doing steadily so over the last 2 months!

They're all all in a neat easy to use database system on the BOT's website here: http://www2.bot.or.th/statistics/BOTWEBSTA...mp;language=ENG

So why is the Thai Baht so strong? The BOT apparently is growing their foreign currency reserves, so they are not spending them, on the contrary. What does the BOT own they can sell to acquire more foreign currencies apart from Thai Baht? I don't know! Gold not, as even that stuff they are owning more of every day (it's counting as foreign currency reserve anyways)!

So who else is buying Thai Baht? Tourists? Seriously doubt it. Tourism accounts from anywhere between 6 and 12% of the GDP, tourism in the last month probably took a 50% nosedive, so that's a heck of a lot of US$, Euro's and UK Pounds less to arrive here.

Export? I would reckon that's down a lot as well, Heck, car manufactures closed down shop for 2 months due to lack of storing the finished product as nobody is buying the. Rice exports are still pretty good, but although the price went slightly up in the last month, it has dropped sharply from the 11oo+ US$/tonne just a few months ago!

So please tell me, why is the Thai Baht so strong, as apparently nobody is buying the bloody stuff......

With exports down, tourism down, I would think direct investment down, the BOT acquiring more foreign reserves, then WHO the heck is buying Thai Baht like crazy??? They surely can't expect a revaluation now can they??

[monty]

Well, one thing they have to spend quite a bit less on and that is oil, but can that make up all the lost incoming foreign currencies, so much so that their foreign reserves are going up?

[Naam]

When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

after Monty posted the BOT's official website i too dare to add a report without fear to be accused of high treason i also add my 2 Satangs which are "wishful thinking and wet dreams are ok as long as they don't mix up with reality".

of course nobody will listen but new topics and claims à la "the Baht will crash" will add to my entertainment

http://www.fxstreet.com/news/forex-news/ar...04-d47b68ed21c8

[imaneggspurt]

When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

after Monty posted the BOT's official website i too dare to add a report without fear to be accused of high treason i also add my 2 Satangs which are "wishful thinking and wet dreams are ok as long as they don't mix up with reality".

of course nobody will listen but new topics and claims à la "the Baht will crash" will add to my entertainment

http://www.fxstreet.com/news/forex-news/ar...04-d47b68ed21c8

Well today i got 49.008 to the pound, ,that was the worst i have ever had, and it felt awful,i can feel a balcony looming !....

[juniorboysown]

Don't jump just yet you never know what tomorrow will bring.

[tomartoh]

I dont know much about economics, but an American friend has been telling me for a couple of months now. That the rich thai are supporting the baht to keep it strong so that they can get their money out of the country. That in the new year they will stop doing so in order for the baht to crash. Then they can buy back in again making huge profits. He says his source is in the State Department.

[jdrake72]

35.57 this morning is hella fat compared to the 29-30 we had to deal with for part of last year.

three corrections.

1-The BUYING rate is at 34.3 today and 2- the strongest point of the baht it was around 31 (not 29) in the onshore trading, the one we got from Thailand.

3- prices have rising (and still rising) at very strong pace (much much much more than the declared ridicolous official inflation rate) so definitely the country is much more costly in US$, not to mention in euros term or pound terms.

When the baht was between 38 and 46 (not to mention in the 50-56) prices in baht were half of today's.

Just see the difference ....

Edited January 5, 2009 by jdrake72

[jdrake72]

I dont know much about economics, but an American friend has been telling me for a couple of months now. That the rich thai are supporting the baht to keep it strong so that they can get their money out of the country. That in the new year they will stop doing so in order for the baht to crash. Then they can buy back in again making huge profits. He says his source is in the State Department.

there are many rumors ....some might be real other just fantasies...

This may be any of the two, may be another piece of cr... or I wouldn t be suprised It is real too, such things and manipulations by few ones happen anywhere , so they can easily happen in Thailand too...

[jdrake72]

When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

after Monty posted the BOT's official website i too dare to add a report without fear to be accused of high treason i also add my 2 Satangs which are "wishful thinking and wet dreams are ok as long as they don't mix up with reality".

of course nobody will listen but new topics and claims à la "the Baht will crash" will add to my entertainment

http://www.fxstreet.com/news/forex-news/ar...04-d47b68ed21c8

if you understand the sentence, i said from ITS highest Peak few months ago, which anyone can see in the World Bank official website. 20% down from last April to late November. If in the past 3 weeks they have risen again I didn t doubt it. You will see in few months when much of these reserves will have expire their maturity.... and than you will laugh much less...

TODAY BOT reserves are still quite high, but what a pity a good part of it will have its maturity in the next months...and the story will be very different.

Edited January 5, 2009 by jdrake72

[jdrake72]

When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

after Monty posted the BOT's official website i too dare to add a report without fear to be accused of high treason i also add my 2 Satangs which are "wishful thinking and wet dreams are ok as long as they don't mix up with reality".

of course nobody will listen but new topics and claims à la "the Baht will crash" will add to my entertainment

http://www.fxstreet.com/news/forex-news/ar...04-d47b68ed21c8

if you understand the sentence, i said from ITS highest Peak few months ago, which anyone can see in the World Bank official website. 20% down from last April to late November. If in the past 3 weeks they have risen again I didn t doubt it. You will see in few months when much of these reserves will have expire their maturity.... and than you will laugh much less...

I think guys in the BOT are much wishful thinking than us.... let s check it out after Songkran, ...

[monty]

When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

Please enlighten me.

As of 26 December last year the foreign reserves stood at 110,891.81 million US$

Exactly 1 year earlier they stood at 89,297.41 million Baht. So they grew foreign reserves by 24%!

Admittedly the biggest growth was in the first few months, which if I recall correctly was when they sold rice at insanely high prices, and even were talking of forming a "rice cartel"...

The highest it ever stood last year was 111,247.29 million US$, on 19 December.

The foreign reserves have been quite stable the last 4 months actually with a steady, relatively linear growth from 100,994.93 Million US$ early September towards today's level some 10% higher!

It was late November the problems with the airport started, resulting in almost two weeks of zero tourist arrives, along with export grinding to very low levels, yet in those last 5 weeks of the year their foreign currency reserves grew some 5%, along with a pretty steady Baht rate against the greenback...

[monty]

Highest in April was 109,697.19Million.

Lowest in November was late October at 102,977.30 Million.

Down some 6%

Lowest was actually in September when it was down almost 9%.

Since September it has been rising so they have been net sellers of Thai Baht...

There simply hasn't been a 20% variance this year, apart from the upwards one on the beginning of 2008...

[LaoPo]

Highest in April was 109,697.19Million.

Lowest in November was late October at 102,977.30 Million.

Down some 6%

Lowest was actually in September when it was down almost 9%.

Since September it has been rising so they have been net sellers of Thai Baht...

There simply hasn't been a 20% variance this year, apart from the upwards one on the beginning of 2008...

Foreign Reserves ($ bln, end-quarter)

Q3 08 Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Q1 07 Q4 06 Q3 06

103.5 106.1 110.0 87.6 80.7 73.0 70.9 67.0 61.6

Total Foreign Debt ($ bln, end-quarter)

Q1 08 Q4 07 Q3 07 Q2 07 Q1 07 Q4 06 Q3 06 Q2 06

66.4 61.7 60.7 58.6 59.31 59.64 60.02 57.83

From the link Naam provided:

http://www.fxstreet.com/news/forex-news/ar...04-d47b68ed21c8

The problem is that Foreign reserves are provided for Q3 2008 but for Foreign debt the last available number is Q1 2008.

LaoPo

[LaoPo]

In addition to the message and the link, above:

"Thailand had foreign reserves of $111.2 billion on Dec. 19." (2008 )

and:

"

Foreign Reserves ($ bln, month-end)

Oct Sep Aug Jul Jun May Apr Mar Feb Jan

103.2 102.4 101.2 104.8 106.1 108.9 109.1 109.7 100.5 92.9 "

The conclusion can only be that Foreign Reserves have increased from $ 92.9 Billion in January 2008 to $ 111,2 Billion on December 19, 2008

That's quite an increase with a staggering +19.7%

The mystery of the strong Baht continues but personally I wouldn't be surprised if some very strong and influential forces are steering Mrs. BoT/Baht...to benefit themselves. Maybe they learned a thing or 2 from the Wall Street Boys.

LaoPo

[Naam]

When the ammount of reserves will start to drop faster (now they are about 20% down from their peak some months ago) it will be very hard for the BOT to keep the baht at its artificial value.

after Monty posted the BOT's official website i too dare to add a report without fear to be accused of high treason i also add my 2 Satangs which are "wishful thinking and wet dreams are ok as long as they don't mix up with reality".

of course nobody will listen but new topics and claims à la "the Baht will crash" will add to my entertainment

http://www.fxstreet.com/news/forex-news/ar...04-d47b68ed21c8

if you understand the sentence, i said from ITS highest Peak few months ago, which anyone can see in the World Bank official website. 20% down from last April to late November. If in the past 3 weeks they have risen again I didn t doubt it. You will see in few months when much of these reserves will have expire their maturity.... and than you will laugh much less...

TODAY BOT reserves are still quite high, but what a pity a good part of it will have its maturity in the next months...and the story will be very different.

please explain why after any maturity the value of the reserves' principal would go down