Is The Thai Baht Really Strong?

[TheItaliann]

My observation is that during this World Economic downswing that products in Thailand have become significantly more expensive. So, 100 baht buys you less in Thailand then it did previously.

Whereas, my observation in the USA is the opposite. A dollar now buys you more in the USA.

I think that the economics behind exchange rates are very complicated and misleading.

When you look at the Thai baht from a PPP perspective, is it really stronger than it was or not?

http://en.wikipedia.org/wiki/Purchasing_power_parity

[ableguy]

Hi, the strength of the Thai Baht is based on several indicators however the ups and downs that take place on a daily basis and what really impact your average tourist is based on the strength of the economy of the country whose currency you wish to exchange into Thai bahts.

Example for several past years the British pound has been worth around 69 baht today you will get around 49 to 50 baht it is not that the Thai Baht has gained but rather the value of the pound has dropped due to economic problems in the UK.

A couple of years back one pound would buy you two US dollars now it will buy you one dollar fifty.

Ref the US dollar for many years it would buy you around thirty five Baht today its around thirty four baht it has dropped slightly but is still a strong currency.

The only solid advice i would pass on is stay away from currency speculation.

[Spee]

OP opined:

"A dollar now buys you more in the USA." (relative to what a baht buys in Thailand)

With the exception of perhaps cars, fuel and computers, I wouldn't think this to be true. Even the fuel gap is narrowing with gas (petrol) back up over $3/gal again. Even with food prices rising in Thailand, rice, fruit and veg are all much less expensive in relative terms (well, assuming one does most buying at the roadside markets and not the big name stores). Stagflation is right around the corner in the US. It remains to be seen whether or not this will impact Thailand.

[TheItaliann]

Whatever a dollar bought you two to three years ago, it still buys that, if not more. That might be the result of Western companies lowering prices due to lack of demand. For example, I recently, in the US, bought several pairs of Polo brand jeans for $25 each (normal price $65).... This was not even a special dated sale, just business as usual. I also noticed food products and everything else down across the board. So... in my opinion, a dollar buys more now than it did before everything hit the fan.

Whereas, Thai baht buys less in Thailand than it did before. Take rice for example. It is the dietary staple of the Thai people and the price has shut up considerably.

Edited March 19, 2010 by TheItaliann

[tw25rw]

It's strong in that it's stable because the BoT have pursued a policy of stability.

It's the currencies countries that many of us come from that have slipped due to their financial systems being used as get rich quick schemes. That bubble has burst and now rates are gravitating to a more natural level. Until the next bubble anyway.

[bkkjames]

It's not that the baht is really high - it's just that all the others are really low.