I Just Don'T Get This Baht To Usd Exchange Rate

[davejonesbkk]

I have quite a firm grasp on monetary policy and economics, I am no expert but I know how it works. I also know that right now the USD, EURO and GBP currencies are suffering due to their weak economies. What I don't get is how come the central bank of Japan have been trying to weaken the Yen due to its 15 year high position as this is badly affecting their export reliant economy but Thailand that also relies heavily on exports does nothing?

A few years back the USD to Baht rate was 40, ok it was artificially high but still, now its around 30, a good 10 baht drop, surely thai exporters must be suffering greatly because of this? Why do Japan act on their strong currency but Thailand doesn't? What are other Asian countries doing with their currencies?

[lifeincnx]

The Thai elite class are doing great as they can keep investing heavily OUTSIDE of Thailand. But this does not bode well for the rest of the nation and key Thai industries. For example, the Thai auto industry is 80% parts manufacturing with much of that for export. The industry as a whole just stated that they can remain afloat (i.e. not profitable) with the baht-to-US dollar at 31-32, but cannot sustain below that. Jasmine rice to the US now comes from many other countries such as Vietnam. Also many expats are having to pull up stakes and get out if this continues. Malaysia right now is heavily targeting Thai expats to take advantage of the strong Baht with tax exemptions and many other financial incentives.

[gotlost]

Bangkok Bank present. 30.46usd 46.85 gbp 38.59 eur.

[midas]

Well what with sporadic bomb blasts and this problem they must still be

suffering from low tourist numbers. I have a friend who works at Dusit

on Koh Chang and last week they only had 4 guests

[davejonesbkk]

I've heard those rumours (mainly here on (thaivisa) about Thai elite manipulating the XE rate for their own offshore investments but I always thought that to be rather paranoid, is their any evidence to back this up? If it is true I think I am going to be supporting the red shirts from now on!

[Stjohnm]

Bangkok Bank present. 30.46usd 46.85 gbp 38.59 eur.

You must be looking at the cash rate as their TT rate is far closer to what the Forex is displaying, for GBP I have 47.7 on the forex and 47.2 on the BKKB TT rate

Edited September 10, 2010 by Stjohnm

[Amerifarang]

All the signs point to a manipulation of the Bhat..... someone is screwing the proverbial puppie dog at the Bof T. There are at least 36 ways to do this. Your financial survival depends on your ability to figure out the 37th and 38th way before they do! You heard it here first!

[123ace]

<P>Exporters have made massive revenues through forex gain. This is evidenced in part by the surge in super car showrooms around Bangkok and high end condo sales in the local (I said local as in - not Pattaya or farang leasehold villa rubbish ok) sector where sales are rapid. <BR><BR>Tourism will decline as will foreign property investment.<BR><BR>Its all due to QE1 and QE2 in the US. There is little that can be done, and the US story is far, far from over, so its best to not react yet anyway with any intervention.<BR></P>

[JimGant]

The Thai elite class are doing great as they can keep investing heavily OUTSIDE of Thailand.

You mean, like in the sluggish economies in the West, where, if there are any profits, these turn negative when you convert those dollars or euros into baht.....

I must be missing something (which isn't too infrequent).

[ESB7]

The Thai elite class are doing great as they can keep investing heavily OUTSIDE of Thailand. But this does not bode well for the rest of the nation and key Thai industries. For example, the Thai auto industry is 80% parts manufacturing with much of that for export. The industry as a whole just stated that they can remain afloat (i.e. not profitable) with the baht-to-US dollar at 31-32, but cannot sustain below that. Jasmine rice to the US now comes from many other countries such as Vietnam. Also many expats are having to pull up stakes and get out if this continues. Malaysia right now is heavily targeting Thai expats to take advantage of the strong Baht with tax exemptions and many other financial incentives.

Spot on !!! The elite couldnt care about the average working class Thai and do invest heavily outside Thailand while the Baht is high, once they are beaten at the elections and policy changes, the rate weakens and they then repatriate their investments...of course at a very beneficial Baht rate to them.....I would say though, the Malaysian Ringitt has strengthened more than the Baht this year so not such a great place to up sticks and go.... about the only place left to go in SE Asia is Cambodia..

[Lancelot]

A strong baht makes imported oil and capital goods cheaper. Currencies go up and they go down. With europe and the usa struggling in recesssion, Thai exports will slow, money will stop flooding in and the baht will weaken.

[pgthompson]

The Thai elite class are doing great as they can keep investing heavily OUTSIDE of Thailand. But this does not bode well for the rest of the nation and key Thai industries. For example, the Thai auto industry is 80% parts manufacturing with much of that for export. The industry as a whole just stated that they can remain afloat (i.e. not profitable) with the baht-to-US dollar at 31-32, but cannot sustain below that. Jasmine rice to the US now comes from many other countries such as Vietnam. Also many expats are having to pull up stakes and get out if this continues. Malaysia right now is heavily targeting Thai expats to take advantage of the strong Baht with tax exemptions and many other financial incentives.

Spot on !!! The elite couldnt care about the average working class Thai and do invest heavily outside Thailand while the Baht is high, once they are beaten at the elections and policy changes, the rate weakens and they then repatriate their investments...of course at a very beneficial Baht rate to them.....I would say though, the Malaysian Ringitt has strengthened more than the Baht this year so not such a great place to up sticks and go.... about the only place left to go in SE Asia is Cambodia..

The Malaysian Ringgit is definitely stronger to sterling rather than the Baht . I've just spent 2 years in KL and moved to Chiang Mai mainly because of the exchange rate and cost of living.

[FarangBuddha]

A strong baht makes imported oil and capital goods cheaper. Currencies go up and they go down. With europe and the usa struggling in recesssion, Thai exports will slow, money will stop flooding in and the baht will weaken.

More or less my opinion as well...all these currency manipulation conspiracy theories are rather comical. More likely falangs who miscalculated their timetable for retirement and now find themselves coming up short at the end of each month and are starting to panic...maybe it's back to damp cold Blighty for them

The baht is more or less a free-float currency so what's the BOT to do in order to affect its value...the value is set by supply and demand in the capital markets. But like tiny houses in England or condos in Vegas...no tree grows to the sky and at some point, the UK and USA economics will right themselves and their currencies will strengthen.

[Naam]

A strong baht makes imported oil and capital goods cheaper. Currencies go up and they go down. With europe and the usa struggling in recesssion, Thai exports will slow, money will stop flooding in and the baht will weaken.

More or less my opinion as well... all these currency manipulation conspiracy theories are rather comical. More likely falangs who miscalculated their timetable for retirement and now find themselves coming up short at the end of each month and are starting to panic...maybe it's back to damp cold Blighty for them

The baht is more or less a free-float currency so what's the BOT to do in order to affect its value...the value is set by supply and demand in the capital markets. But like tiny houses in England or condos in Vegas...no tree grows to the sky and at some point, the UK and USA economics will right themselves and their currencies will strengthen.

why spoil interesting conspiracy theories and wishful with a single hard fact? personally i like "the thai elite class investing outside" best. next in line are those which we hear since a couple of years such as "thai exports, especially rice..." and "no tourists...".

p.s. that the BoT has added to its reserves during the two years of the prevailing "crisis" an additional hundred billion dollars (US$ not Zimbabwe$) by selling Baht against Dollars to keep the Baht from appreciating too fast is another fact!

[samran]

A strong baht makes imported oil and capital goods cheaper. Currencies go up and they go down. With europe and the usa struggling in recesssion, Thai exports will slow, money will stop flooding in and the baht will weaken.

More or less my opinion as well... all these currency manipulation conspiracy theories are rather comical. More likely falangs who miscalculated their timetable for retirement and now find themselves coming up short at the end of each month and are starting to panic...maybe it's back to damp cold Blighty for them

The baht is more or less a free-float currency so what's the BOT to do in order to affect its value...the value is set by supply and demand in the capital markets. But like tiny houses in England or condos in Vegas...no tree grows to the sky and at some point, the UK and USA economics will right themselves and their currencies will strengthen.

why spoil interesting conspiracy theories and wishful with a single hard fact? personally i like "the thai elite class investing outside" best. next in line are those which we hear since a couple of years such as "thai exports, especially rice..." and "no tourists...".

p.s. that the BoT has added to its reserves during the two years of the prevailing "crisis" an additional hundred billion dollars (US$ not Zimbabwe$) by selling Baht against Dollars to keep the Baht from appreciating too fast is another fact!

Naam, didn't you know that it is all an elitist yellow shirt conspiracy to prevent Thaksin from returning??

555555

Thailand gave up currency fixing, ohhh, around 1997. I think the resulting financial crisis changed their minds on the efficacy.

[Naam]

A strong baht makes imported oil and capital goods cheaper. Currencies go up and they go down. With europe and the usa struggling in recesssion, Thai exports will slow, money will stop flooding in and the baht will weaken.

More or less my opinion as well... all these currency manipulation conspiracy theories are rather comical. More likely falangs who miscalculated their timetable for retirement and now find themselves coming up short at the end of each month and are starting to panic...maybe it's back to damp cold Blighty for them

The baht is more or less a free-float currency so what's the BOT to do in order to affect its value...the value is set by supply and demand in the capital markets. But like tiny houses in England or condos in Vegas...no tree grows to the sky and at some point, the UK and USA economics will right themselves and their currencies will strengthen.

why spoil interesting conspiracy theories and wishful with a single hard fact? personally i like "the thai elite class investing outside" best. next in line are those which we hear since a couple of years such as "thai exports, especially rice..." and "no tourists...".

p.s. that the BoT has added to its reserves during the two years of the prevailing "crisis" an additional hundred billion dollars (US$ not Zimbabwe$) by selling Baht against Dollars to keep the Baht from appreciating too fast is another fact!

Naam, didn't you know that it is all an elitist yellow shirt conspiracy to prevent Thaksin from returning??

555555

Thailand gave up currency fixing, ohhh, around 1997. I think the resulting financial crisis changed their minds on the efficacy.

sounds more plausible than "suitcases filled with elitist Baht are going to Switzerland to be invested abroad"

[Naam]

on a seriouys note... i don't envy those retirees who are forced to live on a tight budget based on their income in foreign currency. nobody knows which way exchange rates will be heading in the future. but presently the outlook for asian currencies including THB is rather positive whereas the future of Dollar, EURo and Pound looks rather bleak.

[asiawatcher]

The USD has been affected by the stupidity of the Govt printing dollars to meet debt. I predict the rate will fall as low as 27 (or worse) but only time will prove that. US economy is still bumping along the bottom and whilst the 'govt' has bailed out the scammers banks, America is unable to seek help in the private sector and when that starts to crumble further, watch this space! There is NO bailout for the corporates unfortunately. But like all 'empires', the Roman, Genghis Khan, the British etc - it is just another example of history repeating itself. It is yet to be seen but economies such as Russia and China and Japan may well take the lead in the next decade. I do not believe the US can. Now that should get the keyboards flaming here.... LOL

[BlackGrape]

The USD has been affected by the stupidity of the Govt printing dollars to meet debt. I predict the rate will fall as low as 27 (or worse) but only time will prove that. US economy is still bumping along the bottom and whilst the 'govt' has bailed out the scammers banks, America is unable to seek help in the private sector and when that starts to crumble further, watch this space! There is NO bailout for the corporates unfortunately. But like all 'empires', the Roman, Genghis Khan, the British etc - it is just another example of history repeating itself. It is yet to be seen but economies such as Russia and China and Japan may well take the lead in the next decade. I do not believe the US can. Now that should get the keyboards flaming here.... LOL

Guys, It is what it is. But still got a smile:)

[wintermute]

If you look at global economics one thing is striking..asian economies (the productive ones at least) have mostly maintained their rate of growth or weathered the storm from 2008-2010. The EU countries and the U.S. got hit hard and sank like a rock.

The appreciation of the baht is totally natural because the dollar/euro/pound has been falling. It's not really that the Thai economy has gotten stronger but the western benchmarks have gotten so much weaker in the past few years.

[midas]

I went shopping to Carefour this morning and without doubt the prices of some imported foods are

still creeping upwards. I wonder what it would be like if the baht was

weaker ?

[Gonsalviz]

They tried intervention in 1997. As we all know it didn't work out well.

[eurasianthai]

Exchange rate in between the Thai Baht and the US$ was 25 for many, many years, up to 1997.

Now it is 30, i.e. about 20% better for foreigners paid in US$ than what it was prior to 1997.

So, I sure do not get why it is a problem now?

[Naam]

They tried intervention in 1997. As we all know it didn't work out well.

they tried intervention in 1997 to prevent the Baht from falling and failed because they ran out of hard currency. now they are intervening to prevent a too fast appreciation and they have all the Baht they need.

[Gumballl]

I went shopping to Carefour this morning and without doubt the prices of some imported foods are

still creeping upwards. I wonder what it would be like if the baht was

weaker ?

This probably has more to do with increasing transportation costs or other factors, not with the Baht itself; as the US dollar falls, the price of oil usually rises, hence affecting transportation costs.

Another way to debunk your observation is to picture a $1 item in the US being sold in Thailand, "yesterday" and today. If you exclude transportation costs, price markups, and perhaps even import duties, the price of the item should have decreased. A few years ago it would cost 40 Baht to purchase a $1 item, but today the cost is about 30 Baht.

In a twist, my local liquor store stopped carrying Singha Beer. The price was $11.99 for a 6-pack... hardly worth the price. Since nobody in their right mind would make such an expensive purchase, it probably seemed fitting for the liquor store to stop stocking the product. Now, if the dollar had been stronger, then presumably the cost of the beer would go down... not to say that this would affect one's decision to buy the product.

[Naam]

Exchange rate in between the Thai Baht and the US$ was 25 for many, many years, up to 1997.

Now it is 30, i.e. about 20% better for foreigners paid in US$ than what it was prior to 1997.

So, I sure do not get why it is a problem now?

the problem is that people like you who live on remote islands have never heard the expression "inflation".

[hhgz]

"I have quite a firm grasp on monetary policy and economics, I am no expert but I know how it works."

You should read other threads to get a good laugh. There was the conspiracy that the BoT was spending 100B THB to keep the artificially currency weak. The current conspiracy is that the BoT is spending 100B THB to keep the currency artificially strong and, after they run out of money, the USD-THB exchange rate will crash to 60THB/USD. Of course, none of it is true. Essentially farangs just want their lives to be cheaper, and will support any conspiracy that does the opposite.

As long as the economy is OK without the BoT's strong involvement, that's good enough.

[cmjantje]

I think it won't last long... The money the old Thai earned (?) is used by their children. They think investing abroad is the best idea because they already took over Pukhet without any result. They forget one thing... investing abroad is more risky than in Thailand because of two reasons for them:

1. If the bath keeps growing the value of their investments will go down also

2. If Thailand finally understands that it is not an island and they have to adjust the value of it's currency And if they are unable to sell their investment AT All!! (because of the economic situation... Look at Dubai) the money of these rich son's and daughters will vaporise like snow in the sun.

Give it between 2 and 5 years, because these youngsters really need a lot of money to live the way they live.

Let Thailand just neglect their export and tourist industry... Many other contries are waiting and smiling... with the same smile Thailand is famous for.

Edited September 13, 2010 by cmjantje