What's All This Talk Of A Baht Collapse?

[Naam]

next months will give us a cleaer picture anyway if the "wishful thinkers" or the "reasonable stabilizers" are right. There is nothing wrong to discuss and disagree in some things. I am still convinced the baht is quite overvalued (20% more or less) but I don t pretend to be right for sure. It also depends on what will happen in the next months, since we don t live in a very stable country ....

even some "reasonable stabilisers" (like me) think that the Baht is overvalued. the difference between the disagreeing parties is that one claims "the arse will fall out of the currency" and the others expect an orderly depreciation.

OK, but than... I dont see any orderly depreciation, just the opposite in the past weeks.

Siunce December THB up almost 3% compared to USD (it is not peanuts, in just 1 month !, after all what happened

you are picking at random a rather short period which distorts the picture. a more representative result (with clearly shows a THB depreciation) render the last 9 months when the THB offshore/onshore rate was abolished. that other currencies, especially GBP and EUR depreciated more seems to be irrelevant for the thai economy (or so those in charge may think) .

[Naam]

AMEN! praise the LORD that he'll make it happen like all retirees who live on their offshore yields i'd appreciate again those exchange rates of 1998, e.g. 55 Baht for one dollar although all my big investments (house, cars, etc.) were done at a "bad" rate of 41-42.

[mommysboy]

Well I had reconciled myself to the fact that the bt would not collapse as hoped, but in fact it appears to be increasing still further

It's having a marked effect on business: Thai stuff just looks like rubbish now as opposed to cheap rubbish b4.

But maybe this is the way things are for a while and perhaps this is an accurate exchange rate with all things equal.

All hail the mighty bt

[Gary A]

Why would Thailand want to artificially support the baht? At this point I would think they would be happy to see it weaken especially against the dollar. Their exports at near 35 baht to a dollar make their products too expensive. Unlike the posters thinking it is being manipulated, I think it is floating freely and is not likely to weaken substantially as some think and wish.

ADDED - Before anyone criticizes my opinion, I should add that my income is in dollars.

Edited January 15, 2009 by Gary A

[Naam]

Why would Thailand want to artificially support the baht? At this point I would think they would be happy to see it weaken especially against the dollar. Their exports at near 35 baht to a dollar make their products too expensive. Unlike the posters thinking it is being manipulated, I think it is floating freely and is not likely to weaken substantially as some think and wish.

from all indications = highly unlikely and that there is only a tiny difference between on- and offshore rate proves that (unlike 1997) no offshore attacks on THB exist. the strength of the currency and especially its daily movements leads to only one conclusion and that THB is internally (BOT) influenced for whatever reasons those in charge respectively power have in mind. the latter does not necessarily point to a 'conspiracy' but valid reasons and weighing of pros and cons might exist of which we are not aware. it seems strange however that no further information is provided by the BOT and that the media hardly ever mentions what we discuss here.

[jumnien]

Perhaps a little perspective is in order. Remember, most of us decided to move to Thailand because of the overwhelming hospitality of the Thai people aided by the fact that it was relatively inexpensive to live here off of funds brought in at the stable longtime exchange rate of 25 baht/dollar. Recently the baht has had a massive depreciation to approx. 35 baht/dollar. As you would expect, most of the farang living here in Thailand are living a vastly more comfortable lifestyle that they were previous. Some of this, of course, is due to Thailand's rapid advancement. But the depreciation of the baht that has occured over the recent decades certainly helps.

[Seneque]

Perhaps a little perspective is in order. Remember, most of us decided to move to Thailand because of the overwhelming hospitality of the Thai people aided by the fact that it was relatively inexpensive to live here off of funds brought in at the stable longtime exchange rate of 25 baht/dollar. Recently the baht has had a massive depreciation to approx. 35 baht/dollar. As you would expect, most of the farang living here in Thailand are living a vastly more comfortable lifestyle that they were previous. Some of this, of course, is due to Thailand's rapid advancement. But the depreciation of the baht that has occured over the recent decades certainly helps.

agree but the surged in prices really outweight (by far) this depreciation ... and makes thailand not as cheap as it was.

The baht will flow with the dollar and as the dollar (US) is overbought and stored in treasuries which the government will not be able to finance any much longer, the dollar despite some spikes and the 'obama hope factor' is destined to collapse and will take the baht with it.

As opposite, the AUD (australian) and GBP (pound) will regain some of their shine as these currency are drastically oversold due to the huge develerage that took place in the last months of 2008.

[Naam]

The baht will flow with the dollar and as the dollar (US) is overbought and stored in treasuries which the government will not be able to finance any much longer, the dollar despite some spikes and the 'obama hope factor' is destined to collapse and will take the baht with it.

As opposite, the AUD (australian) and GBP (pound) will regain some of their shine as these currency are drastically oversold due to the huge develerage that took place in the last months of 2008.

lo and behold! blessed by the LORD with the gift of prophecy thou speakest out loud the intimate wishes of strangers living in the land of milk, honey, pussy and smile.

[egg6447]

I want to add a long shot to the baht value debate, and it will probably be shot down by the guys that know how things work on macro scales :

Much of the perceived need to keep the baht srong has to do with energy/politics.

Since Thailand imports most of it's energy, a weak baht would cause massive inflation (as we saw during peak oil) which would also have a substancial effect on the export market, and would be every politicians worst nightmare.

A strong baht is the political ace of spades, allow the baht to weaken by 20% and you'de be out at the next elections.

well Soundman you hit the nail on the head

sorry sounman, in a democracy /educated electorate,, maybe, here a coup, block the airport, i dont see any government desitions effecting there election or not. and knowing absolutly nothing about economics out side commen sence. i can cattagoricaly state in will swing back. a time scale, if we new that all would be well. my guess/opinion dec jan 10. tighten your belts boys.

[chiang mai]

This is all far too heavy for me, I think I might go start a, "I was ripped off by a taxi", thread just to annoy a few folks!

[egg6447]

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.

collapse is not my view. ups and downs the pendalum swings, to and fro.. has there ever been a difference. 60 to the pound exmas time. if not no difference to me. happily i'm fireproof.. why is everyone ,not all, on tv going on about the rates, what goes around comes around, no change there then. only when i make a large payment to foriegn banks do i concider the rates. living expenses are living expenses. adinfinitum.

[wolfmanjack]

Perhaps a little perspective is in order. Remember, most of us decided to move to Thailand because of the overwhelming hospitality of the Thai people aided by the fact that it was relatively inexpensive to live here off of funds brought in at the stable longtime exchange rate of 25 baht/dollar. Recently the baht has had a massive depreciation to approx. 35 baht/dollar. As you would expect, most of the farang living here in Thailand are living a vastly more comfortable lifestyle that they were previous. Some of this, of course, is due to Thailand's rapid advancement. But the depreciation of the baht that has occured over the recent decades certainly helps.

So you are saying the most of us on thaivisa have been living in thailand for over 12 years ??? I don't think so. At least that is not my impression from reading many of the posts on thavisa.

10 to 11 years is recent?? The baht had a massive devaluation in 1997 and bottomed out at apprx 56 to the US$ in 1998 if memory serves me right.

i would be willing to bet a nickle to a $ that most of us moved here after the massive devaluation and are getting a much worse exchange rate than when we moved here. For me It was around 45 to the $ when i moved here.