Baht Likely To Weaken Further In Near Future

[george]

Baht likely to weaken further in near future: KRC

BANGKOK, Mar 4 (TNA) – The baht is likely to weaken to around 37 to the US dollar in parallel with most currencies in the region, according to Kasikorn Research Center.

The leading think tank said the baht had depreciated to a 2-year low of around 36.30 to the dollar this week in response to news reports that the Bank of Thailand (BoT) had intervened to stabilize the baht's value.

The BoT’s move was made in harmony with those of other Asian central banks, which had attempted to rein in the volatility after many currencies in the region weakened to their lowest point in many years.

In the near future, KRC said, the baht is projected to fall to around 36.5-37 to the dollar while the greenback is likely to strengthen against other currencies.

More noticeably, the weakening of baht this year is absolutely different from that in 1997 as the currency depreciation does not result from the weakness of Thailand’s economic fundamentals,

which are currently much stronger than in 1997 when the economic crisis erupted.

The balance of payments and the current account balance are likely to record a surplus for this year. At the same time, Thailand’s foreign debts remain low, and international reserves exceed $100 billion.

-- TNA 2009-03-04

Related link:

Thailand Baht exchange rates

[Seneque]

Bank of Thailand (BoT) had intervened to stabilize the baht's value

Thailand’s economic fundamentals, which are currently much stronger than in 1997 when the economic crisis erupted

If economic fundamentals are strong (?) then why the BOT find it necessary to intervene ... ?

[chrislarsson]

Bank of Thailand (BoT) had intervened to stabilize the baht's value

Thailand's economic fundamentals, which are currently much stronger than in 1997 when the economic crisis erupted

If economic fundamentals are strong (?) then why the BOT find it necessary to intervene ... ?

Doesn't a country want to have a stable currency regardless of whether economic fundamentals are strong or not???

Thailand now has a huge foreign reserve, making a currency crisis like in 1997 very difficult to happen again.

The downturn of this is that while piling up huge savings to insure itself against a future crisis, domestic consumption is kept low, and economic growth relies on growing export. This is true for many Asian countries.

[Alwaysright]

Bank of Thailand (BoT) had intervened to stabilize the baht's value

Thailand's economic fundamentals, which are currently much stronger than in 1997 when the economic crisis erupted

If economic fundamentals are strong (?) then why the BOT find it necessary to intervene ... ?

Doesn't a country want to have a stable currency regardless of whether economic fundamentals are strong or not???

Thailand now has a huge foreign reserve, making a currency crisis like in 1997 very difficult to happen again.

The downturn of this is that while piling up huge savings to insure itself against a future crisis, domestic consumption is kept low, and economic growth relies on growing export. This is true for many Asian countries.

If you have to worry about the baht going up or down maybe you should think about why you are near the edge.

[ashacat]

If you have to worry about the baht going up or down maybe you should think about why you are near the edge.

Smug git!! haha

[grantbkk]

Yes!!!!!!!!!!!!!!!

Now when does the price of beer begin to fall? That is when we know things are going in the right direction.

[EvilDrSomkid]

The exchange rate between Baht:Euro has been sitting quite steadily on 45 baht to 1 Euro now for some months.

Would be nice for this rate to back to around B50:€1 as it was in previous years. Sometimes it went to 52.

[VBF]

If you have to worry about the baht going up or down maybe you should think about why you are near the edge.

IMO that is rather a thoughtless comment considering the Baht / UK Pound relationship has altered by about 30% in the last year!

There are many many hitherto "comfortable" people standing very near the edge indeed.

Of course if that sort of differential really doesn't bother you, how would you like to finance my Buffalo repair buisness?? I'm sure a certain Mr Madoff would help with selling the shares

[Chaimai]

If you have to worry about the baht going up or down maybe you should think about why you are near the edge.

Smug git!! haha

Not that smug - quite stupid in fact:-

THB/GBP topped out, say, 71.

It bottomed out at, say, 47.

That is a difference of 25 Baht.

Some would say that a 25 Baht fall against 71 = 35% drop.

However, if I am using Sterling something that has remained at a consistent price, say, 1,000 Baht then at the peak it was costing me £14.08. At 47 it was costing me £21.28.

That is an increase of £7.20. This represents a 51% increase in my costs.

So, if (at 71) I spent £3,000 and my spending pattern remains the same it costs me £1,530 - a difference of £1,530.

It may be a 3% drop in the exchange rate but it is a 51% increase in costs.

Now, will some smug b4stard like to tell me that is living on the edge ?

[Briggsy]

If you have to worry about the baht going up or down maybe you should think about why you are near the edge.

Smug git!! haha

Not that smug - quite stupid in fact:-

THB/GBP topped out, say, 71.

It bottomed out at, say, 47.

That is a difference of 25 Baht.

Some would say that a 25 Baht fall against 71 = 35% drop.

However, if I am using Sterling something that has remained at a consistent price, say, 1,000 Baht then at the peak it was costing me £14.08. At 47 it was costing me £21.28.

That is an increase of £7.20. This represents a 51% increase in my costs.

So, if (at 71) I spent £3,000 and my spending pattern remains the same it costs me £1,530 - a difference of £1,530.

It may be a 3% drop in the exchange rate but it is a 51% increase in costs.

Now, will some smug b4stard like to tell me that is living on the edge ?

Good post.

I think the poster is in the fortunate position of never having to do a currency exchange "against his will". This can be achieved by say keeping large amounts in bank accounts in both currencies OR by being American (Baht loosely tracks USD) OR by working and living in Thailand and spending less than one earns in Baht.

[george]

Update:

Thai baht may drop further next week

BANGKOK: -- The baht next week would likely depreciate between 36.00 and 36.30 baht to a US dollar, according to Kasikorn Research Centre (KRC)'s forecast.

The Thai currency may weaken in parallel with other regional currencies, but the Bank of Thailand (BoT) may intervene to lessen fluctuation in foreign exchange rates, the think tank said on Sunday.

External factors that may affect the baht value include unemployment outside the agricultural sector and economic figures to be released in the US together with the movement of the US dollar.

Moving to the Stock Exchange of Thailand (SET), the KRC expected the market to follow other foreign markets and move in a narrow range next week, with low trading volume.

The support level should be between 400 and 380 points while its resistance level should be around 423 to 429 points.

-- Bangkok Post 2009-03-08

[BigSnake]

BOT, looking over the Baht hmmmmmmm!! just doing your job taking care of the Baht

[Arkady]

Economic numbers for the Thai economy, specially exports, fell off a cliff in Dec and Jan. The baht will probably test 40 before long.

[george]

Update:

Baht strengthens due to US factors

BANGKOK: -- The baht gained strengthen on Monday and was expected to move in a narrow range from 35.90 to 35.95 baht to a US dollar, according to Bank of Ayudhya's financial officer.

The Thai currency slightly appreciated on Monday morning, standing at 35.96 to 35.99 baht to a dollar. The baht value last Friday stood at 36.06 to 36.08 baht per dollar.

"The strengthening baht was mainly contributed to the weakening dollar caused by increasing unemployment in the United States. The unemployment rate in the US last month hit a 25-year high at 8.1 per cent, or about 651,000 jobs," said the financial officer.

Moreover, the annual reports released by many companies were not very positive.

-- Bangkok Post 2009-03-09

[Pakeha]

For my 500th post I'd just like to say:

"Baht Likely To Weaken Further In Near Future"

And then:

"Baht strengthens due to US factors"

When will it end.... :jerk:

[steelepulse]

>>The Thai currency may weaken in parallel with other regional currencies, but the Bank of Thailand (BoT) may intervene to lessen fluctuation in foreign exchange rates, the think tank said on Sunday.

Where are all the posters that say the BOT doesn't step in to keep the baht propped up?  Maybe this think tank doesn't read the TV business section.

[DeeMaiDee]

By: BangkokPost.comPublished: 9/03/2009 at 10:27 AM The baht gained strength on Monday and was expected to move in a narrow range from 35.90 to 35.95 baht to a US dollar, according to Bank of Ayudhya's financial officer

[chiang mai]

The baht will probably test 40 before long.

If USD was a stake in the ground, a fixed item that never moved, I might be able to agree with you.

[chiang mai]

>>The Thai currency may weaken in parallel with other regional currencies, but the Bank of Thailand (BoT) may intervene to lessen fluctuation in foreign exchange rates, the think tank said on Sunday.

Where are all the posters that say the BOT doesn't step in to keep the baht propped up?  Maybe this think tank doesn't read the TV business section.

The BOT doesn't step in to keep the Baht propped up.

As the article said the BOT intervenes to lessen currency fluctuations against a basket of regional currencies plus, BOT intervenes to ensures that fluctuations against major trading currencies such as USD are not extreme over short periods of time.