What's All This Talk Of A Baht Collapse?

[Naam]

Many posts complain that the Thai government is buying baht with dollars and that keeps the baht strong. Of course they are buying baht for dollars. The US is their biggest trading partner. Why wouldn't they buy baht?

it's not really the government but the exporters who exchange (most of) their dollar proceeds into Baht. they use banks and the banks use the central bank (BOT) to obtain the dollars.

[pkrv]

The instrument GBPTHB= is used to trade between the UK and Thailand.

Sure it is... But, by volume, it's totally irrelevant (compared to USD).

Check the data :

http://thaicrisis.wordpress.com/2009/01/08...nvoiced-in-usd/

Hi cclub 75 - Thanks very much for the link very informative. We are in agreement, In a way I was just correcting a past post which assumed GBP was traded via USD for THB - we both know it is not .

Mind you I am paying a lot of attention to the sterling thread! I have my own predictions and am currently in 'wait mode' and am not transfering at this time.

[henryalleman]

How does Thailand manage to 'devalue' the Baht? The currency has been floated since 97.

"floated" doesn't mean much. The BOT has been constantly following a "management currency" policy. It's obvious, documented (the capital controls from december 2006 to march 2008, the on shore / off shore dual rates, the policy of buying USD, because a that time the THB was increasing too fast versus the USD etc.)

They have been attempting management, but it hasn't really worked. Those mentioned failed to stem the tide - the baht continued to rise. So I don't see how they can now 'manage' to lower it's value, because they haven't been able to in the past.

Not to mention that circumstances outside the country are much bigger factors than anything going on here.

I don't think you fully understand - the BOT has been selling USD in order to keep the Baht strong, if they wish to weaken the Baht it is easy to do except that they haven't tried nor wanted to.

adding "fully" does not seem to be appropriate

Do you believe they are selling US$? Take a look around, the economy here isn't so bad. Take a look around, there's plenty of ppl shopping, new building going up.

The Baht has lost value against the dollar over recent months, it's the other currencies that have plummeted against the dollar the gives the impression of a strong baht.

Nobody really knows, I hope I'm wrong because my business is export.

Economy not so bad, don't think so

http://www.census.gov/foreign-trade/balance/c5490.html#2008

http://www.fpo.go.th/pdf/Forecast_Eng_Dec08_pres.pdf

[jdrake72]

How does Thailand manage to 'devalue' the Baht? The currency has been floated since 97.

"floated" doesn't mean much. The BOT has been constantly following a "management currency" policy. It's obvious, documented (the capital controls from december 2006 to march 2008, the on shore / off shore dual rates, the policy of buying USD, because a that time the THB was increasing too fast versus the USD etc.)

They have been attempting management, but it hasn't really worked. Those mentioned failed to stem the tide - the baht continued to rise. So I don't see how they can now 'manage' to lower it's value, because they haven't been able to in the past.

Not to mention that circumstances outside the country are much bigger factors than anything going on here.

I don't think you fully understand - the BOT has been selling USD in order to keep the Baht strong, if they wish to weaken the Baht it is easy to do except that they haven't tried nor wanted to.

adding "fully" does not seem to be appropriate

Do you believe they are selling US$? Take a look around, the economy here isn't so bad. Take a look around, there's plenty of ppl shopping, new building going up.

The Baht has lost value against the dollar over recent months, it's the other currencies that have plummeted against the dollar the gives the impression of a strong baht.

Nobody really knows, I hope I'm wrong because my business is export.

Economy not so bad, don't think so

http://www.census.gov/foreign-trade/balance/c5490.html#2008

http://www.fpo.go.th/pdf/Forecast_Eng_Dec08_pres.pdf

Read this stuff, very interesting and this guy is not stupid nor a newbie, he always explains his theories with data, which doesn t mean is always right of course:

http://thaicrisis.wordpress.com/

Anyway, Mr. Naam or Mr. Water, plz understand the difference of wishful thinking and real scare.

I am not hoping for a baht crush in order to live cheaper or to do better business (yes, it would , but that s not the case), i simply very concern because periodically I bring quite big ammount of money to Thailand (big ammunt for my standards of course) and nmy profits are very small.

If I make a move of bringing money here and later the baht goes down, I will only have enough money for a bullet to put in my gun and Bang!... well, not like that, but almost....

If I were quite sure of a future baht relative stability, I wouldn t bother to worry about the baht, but I really fear there is a good chance it will happen.

And like me, many many people, and that s is not good for investment, everything is on hold...

Today I talked with a friend who works in the publicity, spots, concerts, movies, etc... and he said after december no more foreign production. Stop, everything stop , just Thai producers.... many sectors are in the same conditions...

Thailand is still moving on...but i am afraid is just for inertia,...

Do you understand the difference between a simple wishful thinking and a real concern ? It is quite different.

[jdrake72]

A BIG reason to worry about the Baht ?

New Forward position.

Read here:

http://thaicrisis.wordpress.com/2008/12/21...al-mine-canary/

I read a similar view of an economist who writes in Bloomberg and by a coupe of others,.... We mught look paanoic, but there is consensus around about a devaluation of the baht...

[bonzor]

Just my two penny's worth - but isn't uncertainty the thing which the markets hate the most?

We have certainly had our fair share of uncertainty - terrorism in the south, political street fighting, airport takenover, no effective government for a period etc. A currency in any other country would be in the gutter!

uncertainty exists in each and every market including currencies.

He's talking about degrees of uncertainty as you well know. Of course uncertainty is in every market but there's a qualitive differnce between uncertainty about which bank will deliver the best quarterly results in 2006 and whether a bank will actually go bust as in 2008. Perhaps you could indicate you grasp that with one of your pithy one liners. Incidentally why are you a man of so few words or is it just that you are graphologically constipated?

if you weren't such a bloody newbie in this forum you'd know that i'm not always a man of few words. moreover, quite often a few words express more than a novel containing a lot of rubbish

Now I understand, its just on this thread you lurk and then pounce with your pithy one liners. Ever thought about contributing rather than sniping? Might ease the word block and be good for you. If you weren't such a bloody old fixture, old timer, you might know that.

Edited January 10, 2009 by bonzor

[lannarebirth]

A BIG reason to worry about the Baht ?

New Forward position.

Read here:

http://thaicrisis.wordpress.com/2008/12/21...al-mine-canary/

I read a similar view of an economist who writes in Bloomberg and by a coupe of others,.... We mught look paanoic, but there is consensus around about a devaluation of the baht...

Looking at the chart you provided, here was a similar drop in Net Forward Positions in 2004-2005. When comparing that chart to a USD:THB chart of the same period I did not note any calamatous price activity. In fact the USD:THB traded in a pretty narrow range for the entire period.

Anyhow, I'm not sure what the catalyst for a major devaluation to the baht might be. It's valuation doesn't seem too out of line to me and I almost never see currencies "properly valued".

[jdrake72]

A BIG reason to worry about the Baht ?

New Forward position.

Read here:

http://thaicrisis.wordpress.com/2008/12/21...al-mine-canary/

I read a similar view of an economist who writes in Bloomberg and by a coupe of others,.... We mught look paanoic, but there is consensus around about a devaluation of the baht...

Looking at the chart you provided, here was a similar drop in Net Forward Positions in 2004-2005. When comparing that chart to a USD:THB chart of the same period I did not note any calamatous price activity. In fact the USD:THB traded in a pretty narrow range for the entire period.

Anyhow, I'm not sure what the catalyst for a major devaluation to the baht might be. It's valuation doesn't seem too out of line to me and I almost never see currencies "properly valued".

yes, but the difference was that starting from 2004-2005 there had been a big flux of money coming into Thailand, now there isn t and BOT without its intervention m,the reserves will start to drop and the support for the baht waning.

Anyway, that s not science, we cannot say, but it doesn t smell good in favour of the baht...

[bonzor]

A BIG reason to worry about the Baht ?

New Forward position.

Read here:

http://thaicrisis.wordpress.com/2008/12/21...al-mine-canary/

I read a similar view of an economist who writes in Bloomberg and by a coupe of others,.... We mught look paanoic, but there is consensus around about a devaluation of the baht...

Looking at the chart you provided, here was a similar drop in Net Forward Positions in 2004-2005. When comparing that chart to a USD:THB chart of the same period I did not note any calamatous price activity. In fact the USD:THB traded in a pretty narrow range for the entire period.

Anyhow, I'm not sure what the catalyst for a major devaluation to the baht might be. It's valuation doesn't seem too out of line to me and I almost never see currencies "properly valued".

yes, but the difference was that starting from 2004-2005 there had been a big flux of money coming into Thailand, now there isn t and BOT without its intervention m,the reserves will start to drop and the support for the baht waning.

Anyway, that s not science, we cannot say, but it doesn t smell good in favour of the baht...

Now's the time to sell baht, sell sell sell, sell and ye shall reap. One liner but not pithy. More crazed.

[lannarebirth]

A BIG reason to worry about the Baht ?

New Forward position.

Read here:

http://thaicrisis.wordpress.com/2008/12/21...al-mine-canary/

I read a similar view of an economist who writes in Bloomberg and by a coupe of others,.... We mught look paanoic, but there is consensus around about a devaluation of the baht...

Looking at the chart you provided, here was a similar drop in Net Forward Positions in 2004-2005. When comparing that chart to a USD:THB chart of the same period I did not note any calamatous price activity. In fact the USD:THB traded in a pretty narrow range for the entire period.

Anyhow, I'm not sure what the catalyst for a major devaluation to the baht might be. It's valuation doesn't seem too out of line to me and I almost never see currencies "properly valued".

yes, but the difference was that starting from 2004-2005 there had been a big flux of money coming into Thailand, now there isn t and BOT without its intervention m,the reserves will start to drop and the support for the baht waning.

Anyway, that s not science, we cannot say, but it doesn t smell good in favour of the baht...

Well, there's certainly room for it to run to 38 against the $USD. Pretty strong resistance at that point.

I'm thinking that rather than a baht devaluation we may start to see prices of some goods, services and asset classes fall instead, That would be in keeping with the wider global trend.

[mommysboy]

A BIG reason to worry about the Baht ?

New Forward position.

Read here:

http://thaicrisis.wordpress.com/2008/12/21...al-mine-canary/

I read a similar view of an economist who writes in Bloomberg and by a coupe of others,.... We mught look paanoic, but there is consensus around about a devaluation of the baht...

Looking at the chart you provided, here was a similar drop in Net Forward Positions in 2004-2005. When comparing that chart to a USD:THB chart of the same period I did not note any calamatous price activity. In fact the USD:THB traded in a pretty narrow range for the entire period.

Anyhow, I'm not sure what the catalyst for a major devaluation to the baht might be. It's valuation doesn't seem too out of line to me and I almost never see currencies "properly valued".

yes, but the difference was that starting from 2004-2005 there had been a big flux of money coming into Thailand, now there isn t and BOT without its intervention m,the reserves will start to drop and the support for the baht waning.

Anyway, that s not science, we cannot say, but it doesn t smell good in favour of the baht...

We're just left with impressions, mine is that we are at the very top of it's value and the bt will depreciate possibly even crash in value.

It reminds me of the housing bubble in UK when vested interests argued any which way they could that prices could never drop and they were right until about a year ago. If something is over valued it's over valued and there's only ever going to be one result sooner or later.

[chiang mai]

All the regular tourist visitors to Thailand and expats who live here, hoping for a Baht crash - given the way they run the country they surely can't be capable of managing their economy or central banking affairs I hear them say, it's dead cert that the Baht must crash! Wishful thinking I say, get used to the idea that the problems of 1997 are well behind us.

[Naam]

Now I understand, its just on this thread you lurk and then pounce with your pithy one liners. Ever thought about contributing rather than sniping? Might ease the word block and be good for you. If you weren't such a bloody old fixture, old timer, you might know that.

nomen est omen

"This post has been edited by Bonzo: Today, 2009-01-11 01:13:50"

[chiang mai]

Now I understand, its just on this thread you lurk and then pounce with your pithy one liners. Ever thought about contributing rather than sniping? Might ease the word block and be good for you. If you weren't such a bloody old fixture, old timer, you might know that.

nomen est omen

"This post has been edited by Bonzo: Today, 2009-01-11 01:13:50"

Very good.

[jdrake72]

All the regular tourist visitors to Thailand and expats who live here, hoping for a Baht crash - given the way they run the country they surely can't be capable of managing their economy or central banking affairs I hear them say, it's dead cert that the Baht must crash! Wishful thinking I say, get used to the idea that the problems of 1997 are well behind us.

like I said it is not wishful thinking.

If many economists who are based outside Thailand are predicting the same thing, or they are all wrong (it might be) or there are many reasons to think Baht will go down.

If you bother to have a look to the links I provided , the guy explained in many articles valid reasons for that.

Economists who write for Bloomberg and other fainancial agencies are forecasting the same.

It doesn t mean that is bible, but we have reasons to worry about that.

[stament]

Interesting posts, and I don't pretend to understand all the postings as I'm no expert but understand basic economics.

I've tried searching for GBP/THB fx forward rates on google but can't seem to find anyone that gives a 1 month, 3 month, etc rate

Do you have to subscribe to sites to get this info?

Sorry I don't have access to Bloomberg, could anybody share the info if it's availabile?

Thanks

[chiang mai]

All the regular tourist visitors to Thailand and expats who live here, hoping for a Baht crash - given the way they run the country they surely can't be capable of managing their economy or central banking affairs I hear them say, it's dead cert that the Baht must crash! Wishful thinking I say, get used to the idea that the problems of 1997 are well

behind us.

If many economists who are based outside Thailand are predicting the same thing, or they are all wrong (it might be) or there are many reasons to think Baht will go down.

Please point us to at least one serious non-resident article by US based commentators, and I do underscore the term, "serious" purposely, that makes a significant and accurate prediction on the exchange rate issue over the past year.

If you bother to have a look to the links I provided , the guy explained in many articles valid reasons for that.

Economists who write for Bloomberg and other fainancial agencies are forecasting the same.

It doesn t mean that is bible, but we have reasons to worry about that.

Be worried by all means but be realistic and avoid historic thinking as the only way forward by all others.

[chiang mai]

Interesting posts, and I don't pretend to understand all the postings as I'm no expert but understand basic economics.

I've tried searching for GBP/THB fx forward rates on google but can't seem to find anyone that gives a 1 month, 3 month, etc rate

Do you have to subscribe to sites to get this info?

Sorry I don't have access to Bloomberg, could anybody share the info if it's availabile?

Thanks

I know little about these things but I will be surprised if such figures exist since they are likely negligible and of no significance.

[Naam]

All the regular tourist visitors to Thailand and expats who live here, hoping for a Baht crash - given the way they run the country they surely can't be capable of managing their economy or central banking affairs I hear them say, it's dead cert that the Baht must crash! Wishful thinking I say, get used to the idea that the problems of 1997 are well behind us.

like I said it is not wishful thinking.

If many economists who are based outside Thailand are predicting the same thing, or they are all wrong (it might be) or there are many reasons to think Baht will go down.

i suggest we agree on one thing that cannot be debated as it is a fact. the much discussed and prophesied crash of the Baht has been wishful thinking since a couple of years until today.

[stament]

Interesting posts, and I don't pretend to understand all the postings as I'm no expert but understand basic economics.

I've tried searching for GBP/THB fx forward rates on google but can't seem to find anyone that gives a 1 month, 3 month, etc rate

Do you have to subscribe to sites to get this info?

Sorry I don't have access to Bloomberg, could anybody share the info if it's availabile?

Thanks

I know little about these things but I will be surprised if such figures exist since they are likely negligible and of no significance.

Is there a USD/THB one then?

[chiang mai]

Interesting posts, and I don't pretend to understand all the postings as I'm no expert but understand basic economics.

I've tried searching for GBP/THB fx forward rates on google but can't seem to find anyone that gives a 1 month, 3 month, etc rate

Do you have to subscribe to sites to get this info?

Sorry I don't have access to Bloomberg, could anybody share the info if it's availabile?

Thanks

I know little about these things but I will be surprised if such figures exist since they are likely negligible and of no significance.

Is there a USD/THB one then?

Yes, read back through this thread to understand further.

Edited January 11, 2009 by chiang mai

[Naam]

Interesting posts, and I don't pretend to understand all the postings as I'm no expert but understand basic economics.

I've tried searching for GBP/THB fx forward rates on google but can't seem to find anyone that gives a 1 month, 3 month, etc rate

Do you have to subscribe to sites to get this info?

Sorry I don't have access to Bloomberg, could anybody share the info if it's availabile?

unfortunately my info is not up-to-date but i was told in august last year by my bank that "normal" forward deals are not done. in case i would like to buy or sell a rather big amount (minimum value USD 250k) they would try to find a counterpart but without any guarantee.

[lannarebirth]

Perhaps someone could define what is meant by a "collapse". Maybe posters are using different definitions.

To my way of thinking a collapse would be a move to greater than 44 vs the dollar, which is approximately a 50% retracement of its most recent highs near 32 and lows near 56. 50% retracements are not at all uncommon in LT bullish patterns. More bullish still for the THB would be a move to 41ish (38.2 retracement) and a resumption of it's uptrend. That may portend new highs in years to come.

I'm just using round numbers as my USD:THB charts really suck.

Edited January 11, 2009 by lannarebirth

[Naam]

Perhaps someone could define what is meant by a "collapse". Maybe posters are using different definitions.

nobody has defined or quantified the expressions (e.g. "crash, collapse or arse falling out") used on Thaivisa which is in my opinion a sign of "we don't know, but that is what we would like". besides multiple Thaivisa postings i couldn't find any "talk of a Baht collapse" in any research of asian banks or newspapers.

[jumnien]

I think those that are relying on Obama's institutionalization of annual trillion dollar debts far into the forseeable future does not bode well for those that have bet their family fortunes on a baht crash. Good luck on you, but I'd suggest a bit of caution in this dollar worshiping.

[monty]

I'm trying to hold of moving money to Thailand, not because I think the Thai Baht will crash, but because I think it will weaken gradually, inline with the dwindling demand for it.

Less tourism, less exports and less direct investment all creates less influx of foreign currencies. Until a certain exchange rate level, where buying from Thailand, or coming on holidays here suddenly starts to make sense again, which will halt or even reverse the slide.

I think at the moment, with the Democrat led alliance yesterday strengthening their position (they got 20 of the 29 available seats in the by-election) we are looking at a more stable political scene, which often (especially here) has a positive effect mainly on direct investment.

Which would help cushion any fall the Thai Baht might enter into...

[cclub75]

I think at the moment, with the Democrat led alliance yesterday strengthening their position (they got 20 of the 29 available seats in the by-election) we are looking at a more stable political scene, which often (especially here) has a positive effect mainly on direct investment.

Which would help cushion any fall the Thai Baht might enter into...

Sure the political situation has improved (until the next crisis). But don't you think that the situation is worsening on the economic front ?

Investment applications dropped 29.69 per cent to Bt446.3 billion last year, the Board of Investment said yesterday.

http://www.nationmultimedia.com/2009/01/08...ss_30092731.php

How businesses would be willing to increase their investments, now ?

Edited January 12, 2009 by cclub75

[Smithson]

We're not talking about a matter of opinion here we are talking about fact hence everybody really does know, except you it seems! It is indeed a fact that the BOT has been selling USD in favor of the Baht and that has been their stated policy.

So you have no links verifying 'the fact' and 'stated policy'? May have to pop up CM sometime for a bit of bar stool 'factual' analysis.

Edited January 12, 2009 by Smithson

[chiang mai]

We're not talking about a matter of opinion here we are talking about fact hence everybody really does know, except you it seems! It is indeed a fact that the BOT has been selling USD in favor of the Baht and that has been their stated policy.

So you have no links verifying 'the fact' and 'stated policy'? May have to pop up CM sometime for a bit of bar stool 'factual' analysis.

Requiring someone to post an internet link is not the holy grail of truth, did you look at the numbers over time as suggested earlier because the answer is self evidence. BTW, it's Phuket not CM and sorry but I don't drink alcohol.

[Smithson]

We're not talking about a matter of opinion here we are talking about fact hence everybody really does know, except you it seems! It is indeed a fact that the BOT has been selling USD in favor of the Baht and that has been their stated policy.

So you have no links verifying 'the fact' and 'stated policy'? May have to pop up CM sometime for a bit of bar stool 'factual' analysis.

Requiring someone to post an internet link is not the holy grail of truth, did you look at the numbers over time as suggested earlier because the answer is self evidence. BTW, it's Phuket not CM and sorry but I don't drink alcohol.

If it was stated government policy that 'everyone except me' knows, then there must be a source, quote etc. The figures suggest movement in exchange rates, that's what they're for. Maybe you should start drinking?