The Baht

[Deserted]

Hi guys, could someone briefly explain why the baht is so low at the moment.

Also, I'll be relocating at the end of Jan, is the baht likely to get any lower or better by then do you think?

Thanks

[chiang mai]

Well, the Bank of Thailand just increased their lending rate whereas the Bank of England and the US Fed would like to cut theirs, unfortunately they're pretty close to the floor already so little chance there - in all of that is a story that says the Thai economy (as small as it is in relative terms) and financial position is far stronger and healthier than its much larger counterparts. Will that change by the time you arrive here, I say it may but not in the way that you and other ex-pats may wish.

[gotlost]

It sucks so get adjusted to it.

[Pib]

I think the OP means why is the baht so high/strong versus low/weak, since the baht has been appreciating against most currencies which means a person gets fewer baht per USD, euro, pound, etc. I expect the baht will continue to appreciate due to economic weakness in many western nations and investors feeling they can get more return on their investments by investing in emerging markets like Thailand. End result: fewer baht in your pocket per USD, Euro, etc., exchanged.

[sydneyjed]

Nearly all the Asian big 5 currencies have gone up against most of the Western ones in the last year or so.The Thai baht has gone up 14% against the $US in just 5 months..Did read in BanK' Post that the main factors contributing to this were;Major fund managers from overseas were dumping billions of dollars here on short term currency calls and then taking the money and running..Only thing with this is that they are just like rats and coming back to the biscuit tin for more!Theres no doubt about it that there's quite a few 'well connected' local top brass in on this as well..a fair few with their snout in the trough!.(hence that's why none of them are that overly bothered about what it's doing to the rest of the country)Like every boom there is a bust..mark my words it will happen!

Edited December 2, 2010 by sydneyjed

[chiang mai]

Nearly all the Asian big 5 currencies have gone up against most of the Western ones in the last year or so.The Thai baht has gone up 14% against the $US in just 5 months..Did read in BanK' Post that the main factors contributing to this were;Major fund managers from overseas were dumping billions of dollars here on short term currency calls and then taking the money and running..Only thing with this is that they are just like rats and coming back to the biscuit tin for more!Theres no doubt about it that there's quite a few 'well connected' local top brass in on this as well..a fair few with their snout in the trough!.(hence that's why none of them are that overly bothered about what it's doing to the rest of the country)Like every boom there is a bust..mark my words it will happen!

True except it's the majors that have fallen against THB and not visa versa.

[Naam]

Major fund managers from overseas were dumping billions of dollars here on short term currency calls and then taking the money and running..

if that was the case the Baht would have fallen after they ran. please tell us one more fairy tale you claim to have read in the Bangkok Post.

[Deserted]

Hi guys, just to explain a little further. It's been nearly 10 years since I last lived in Thailand. I remember the exchange rates for the uk pound was around 68 and the dollar was 44. I know its gradually dropped since then but I hope it doesn't go lower than what it is, from my perspective it seems very low already, but once again this is based on a comparison of a few years back..

Is Thailand in recession at the moment?

Is it possible to have a bank account in Thailand with US dollars. If so, is there a minimum amount do you know?

Many thanks

[nong38]

I suspect the news for us with spending money is likely to get steadily worse until the pound, euro and dollar start to put their homelands in better financial state and that is not january 2011. Forecasting the future is full of variables but my guess and I hope I am wrong is that itwill be at least a year before western houses are in order to affect the baht. Something could happen at this end of course, something unexpected. With interest rates slowly rising here and them stuck on the floor over there the exchange rate looks bleak

[ozzieovaseas]

Nearly all the Asian big 5 currencies have gone up against most of the Western ones in the last year or so.The Thai baht has gone up 14% against the $US in just 5 months..Did read in BanK' Post that the main factors contributing to this were;Major fund managers from overseas were dumping billions of dollars here on short term currency calls and then taking the money and running..Only thing with this is that they are just like rats and coming back to the biscuit tin for more!Theres no doubt about it that there's quite a few 'well connected' local top brass in on this as well..a fair few with their snout in the trough!.(hence that's why none of them are that overly bothered about what it's doing to the rest of the country)Like every boom there is a bust..mark my words it will happen!

Well, if going from the recent history even domestic turmoil deosnt seem to have much effect on the baht. Many have been predicting the bust for some time, similiar to what sydneyjed has said, but still it hasnt happened.

IMO, as long as other countries are heading into even murkier waters with kamakazi economic policies i think Thailand will hold up OK.

And as for wishing the baht to head south at whatever the cost, for our own financial benefit, we might do well to spare a thought...Little point having a low baht and a great exchange rate if the country implodes to a point where its not a very nice place to live/stay/visit....especially If the whole thing falls apart as a result of a bunch of unfortunate future events happening around the same time

Be careful what you wish for comes to mind

Interesting times ahead??

Edited December 2, 2010 by ozzieovaseas

[gregb]

Hi guys, just to explain a little further. It's been nearly 10 years since I last lived in Thailand. I remember the exchange rates for the uk pound was around 68 and the dollar was 44. I know its gradually dropped since then but I hope it doesn't go lower than what it is, from my perspective it seems very low already, but once again this is based on a comparison of a few years back..

Is Thailand in recession at the moment?

Is it possible to have a bank account in Thailand with US dollars. If so, is there a minimum amount do you know?

Many thanks

You better exchange now. The Baht is going to get a whole lot stronger vs. the USD. If you think 30 is bad, you ain't seen nothing yet.

Thailand is actually recovering from what turned out to be a very minor recession, vs. the Western economies which are just getting ready to fall deeper into theirs. You might be able to catch a short term blip where the USD strengthens marginally against the THB (maybe up to 30.5 or so), but don't bet on it. I have a friend working in the manufacturing sector whose company is starting to try and make contingencies for as bad as 15 in a few years.

The Thai economy will buckle under the strain of losing its exports at some point, but that point is alot further away than many people on this board want to admit. The THB is in no danger of weakening against the greenback any time soon.

You can open a USD account here in Thailand in theory. The rules were changed to allow this about 18 months ago. The willingness to do this by some branches of some banks is somewhat spotty. You should be able to accomplish it, but you may have to jump through a hoop or two. I would recommend however, that if your plan is to hold some USD in the hopes of it recovering against the THB, that you don't go overboard on this plan. You don't want to be overly exposed to a declining currency while your daily living expenses are all in terms of Baht if it can be prevented.

[gamini]

I think the OP means why is the baht so high/strong versus low/weak, since the baht has been appreciating against most currencies which means a person gets fewer baht per USD, euro, pound, etc. I expect the baht will continue to appreciate due to economic weakness in many western nations and investors feeling they can get more return on their investments by investing in emerging markets like Thailand. End result: fewer baht in your pocket per USD, Euro, etc., exchanged.

True but this forum is for ex-pats who live here so it is good news. We can afford a trip abroad now.....

[sydneyjed]

Obviously Naamm you are not too read up on this subject ..The Thai Government in its ultimate wisdom introduced a 15% tax levy to stop this so called 'practice' from continuing...A fantasy?Get yer hand off it !Obviously don't have to be born with a long neck and a orange beak to be a goose on here..probably helps in your case!!

[WAYNEandAEI]

The aussie dollar has been staying strong against the Baht - Im happy with that...I do feel the pain being experienced by the Brits, Euro's and Yanks however

[afarang]

I am no Economist, I hope I get this right,The Fed has just released U.S.$ 600 Billion , buying up U.S.Bank's debt for cash.It is called Quantitative Easing The U.S. banks cannot make profits by investing in the U,.S.,itself. So, all this money is sloshing around in , primarily, Asia.As Capital Inflows, where the U.S. Banks can make profits. This strengthens Asian currencies against the U.S.$ and Euro zone currencies.Thailand, in particular ,was not badly damaged by the G.F.C., so its economy has grown quite well. It is considered a good place to invest Capital.So,don't look for Western currencies to gain ,for quite a long time.The Baht WILL remain strong. The B.O.T. is worried ,but it seems ,right now, it is pretty powerless to do anything about it. It is impacting on some Thai exports.I suspect it is having a dramatic effect on Western tourists, because Thailand is no longer a cheap holiday destination.Look for Thailand to proudly excellent tourist arrival numbers, not naming the countries ,they come from,which will be China, India,and Russia,. The LAST of the great spenders?555555

[Thailaw]

I am no Economist, I hope I get this right,The Fed has just released U.S.$ 600 Billion , buying up U.S.Bank's debt for cash.It is called Quantitative Easing The U.S. banks cannot make profits by investing in the U,.S.,itself. So, all this money is sloshing around in , primarily, Asia.As Capital Inflows, where the U.S. Banks can make profits. This strengthens Asian currencies against the U.S.$ and Euro zone currencies.Thailand, in particular ,was not badly damaged by the G.F.C., so its economy has grown quite well. It is considered a good place to invest Capital.So,don't look for Western currencies to gain ,for quite a long time.The Baht WILL remain strong. The B.O.T. is worried ,but it seems ,right now, it is pretty powerless to do anything about it. It is impacting on some Thai exports.I suspect it is having a dramatic effect on Western tourists, because Thailand is no longer a cheap holiday destination.Look for Thailand to proudly excellent tourist arrival numbers, not naming the countries ,they come from,which will be China, India,and Russia,. The LAST of the great spenders?555555

You were doing pretty well until you came to the "The B.O.T. is worried ,but it seems ,right now, it is pretty powerless to do anything about it" part. The BOT can do something about it, as China's actions to control the exchange rate of its currency against the Dollar (to the great upset of the US Gov't) indicates, but thus far it has chosen not to act. To be sure, there are problems created by keeping one's currency artifically low (primarily inflationary pressures), again as China is starting to experience with Bernanke's QE2 push, but it can be done. And the problems in the form of inflationary pressure may (and likely will) be seen as less serious than increased unemployment, which is inevitable as the Baht rises in value against the Dollar, Pound and Euro, and even the Yuan (a competitor for production), making everything produced in Thailand more expensive for those paying in one of those three currencies. So, stay tuned, the pressure is mounting, and a decrease in the value of the Baht (albeit minor) may be in the cards for the first quarter of 2011.

[personchester]

Major fund managers from overseas were dumping billions of dollars here on short term currency calls and then taking the money and running..

if that was the case the Baht would have fallen after they ran. please tell us one more fairy tale you claim to have read in the Bangkok Post.

The FX market is actively alive 24 Hrs around the clock, and although the traders are guided by economical research, the risk factor is still casino style and the trading financial institutions & banks gain and lose billions on a daily basis, nevertheless, under normal circumstances the major global currencies remain generally balanced.

Unfortunately, all this changed with the "sub prime funds" disaster (Wall Street) and the demise of the US major Bank lender "Lehman Brothers" which the US government refused to baleout, as a result the bank collapsed which is now regarded as a mistake, had the US government supported Lehman Brothers by pumping funds into it, then the international financial crisis would not occurred.

Yesterday (via electronic transfer) the exchange rate of GBP / THB was 46.66. prior to the financial disaster the average rate of GBP / THB was between 69 -72. a decline of some 35%, a disastrous decline indeed, the USD and EUR also declined but not anywhere near the GBP decent.

Many Brits retired in Thailand suffer financially as a result of this, and one hopes that matters will eventually improve, but time-wise, no one knows, the predictions are 2 to 3 years, and then perhaps slowly upwards, well lets hope so.

[Thailaw]

The FX market is actively alive 24 Hrs around the clock, and although the traders are guided by economical research, the risk factor is still casino style and the trading financial institutions & banks gain and lose billions on a daily basis, nevertheless, under normal circumstances the major global currencies remain generally balanced.

Unfortunately, all this changed with the "sub prime funds" disaster (Wall Street) and the demise of the US major Bank lender "Lehman Brothers" which the US government refused to baleout, as a result the bank collapsed which is now regarded as a mistake, had the US government supported Lehman Brothers by pumping funds into it, then the international financial crisis would not occurred.

Yesterday (via electronic transfer) the exchange rate of GBP / THB was 46.66. prior to the financial disaster the average rate of GBP / THB was between 69 -72. a decline of some 35%, a disastrous decline indeed, the USD and EUR also declined but not anywhere near the GBP decent.

Many Brits retired in Thailand suffer financially as a result of this, and one hopes that matters will eventually improve, but time-wise, no one knows, the predictions are 2 to 3 years, and then perhaps slowly upwards, well lets hope so.

The post above is a string of disjoint, mostly incorrect, and irrelevant nonsense. The foreign exchange market does work and is "balanced" (that's what markets do, balance supply and demand) -- so what? Lehman was not the linch pin to the global financial crisis. There were many causes, including Ginnie Mae and Fannie Mae, and the main blame rests with the US Government and its policies to inflate housing demand for a decade (it happens that housing is one of the main securities held by banks for their loans -- that bubble burst). Most people claim that the "Global Financial Crisis" started in September 2008. On 2 September 2008, the GB Pound bought 61.247 Thai Baht. Certainly, the drop in value of the Pound in relation to the Baht has been significant, but in no way as large as is suggested.

[afarang]

Agree with you, Thai Law. Maybe what i should have said, is that B.O.T. seems to be LOATH to take action, for reasons which I cannot fathom.I did contact the B.O.T., last year ,in an effort to try find an answer. They were totally unwilling to provide any information. Or reasons

[jazzbo]

As per #11 above:

The Thai economy will buckle under the strain of losing its exports at some point, but that point is a lot further away than many people on this board want to admit. The THB is in no danger of weakening against the

greenback any time soon.

There is a particle of speech in the English language known as a 'conditional'... as in 'The Thai economy MAY buckle' but I guess if your time frame is one to two hundred years it can maybe be dispensed...

[Naam]

Obviously Naamm you are not too read up on this subject ..The Thai Government in its ultimate wisdom introduced a 15% tax levy to stop this so called 'practice' from continuing...A fantasy?Get yer hand off it !Obviously don't have to be born with a long neck and a orange beak to be a goose on here..probably helps in your case!!

in your case a wee bit of logical thinking would help. i referred to the fairy tale "dumping billions and then run". that theory is nothing but ridiculous and i will not waste more time explaining.

[12DrinkMore]

Agree with you, Thai Law. Maybe what i should have said, is that B.O.T. seems to be LOATH to take action, for reasons which I cannot fathom.I did contact the B.O.T., last year ,in an effort to try find an answer. They were totally unwilling to provide any information. Or reasons

The BoT has not been inactive.

1. BoT have been keeping the THB down through purchases of foreign exchange.

2. BoT are raising interest rates to curb inflation and too rapid groeth in the economy.

And really, why on earth should the BoT have to answer your questions regarding their policy decisions? Jeeze, Ben the Bank won't answer questions even from the Senate.

Maybe this might help you?

http://www.bot.or.th/Thai/MonetaryPolicy/Documents/MPC_82010.pdf

And more generally

http://www.bot.or.th/ENGLISH/MONETARYPOLICY/Pages/MonetaryPolicy.aspx

[sydneyjed]

You don't have to,short term hedging is why the 15% tax was introduced to curb this and to be honest what logic do you bring to the discussion table anyhow?..A trumped up know it all obviously having a bad day...or are you always this high n' mighty?

[topt]

As a further reply to - "Is it possible to have a bank account in Thailand with US dollars. If so, is there a minimum amount do you know?" -

As a previous poster mentioned it is possible but all the banks have a slightly different policy and only the larger branches can normally manage. I opened (and then closed) what was called a Foreign Curreny Deposit Account with SCB. I already had a Thai Baht savings account and they sent the details off to the BKK head office and it was open within a week.

The minimum ammount required to maintain the account was $5,000 which seems fairly standard. However if you wished to draw out in cash as $US they charged a rediculous amount - something like 2% or more. Again this was also the case for another couple of banks I checked.

The main reason I closed it was I could not see any good reason to hold $US in Thailand..

[afarang]

B.O.T. has been keeping the Baht DOWN? Try telling that little absurdity to anyone who gets money from England, U.S. or Europe. True, they did lift interest rates ,THIS week on Wednesday , by 0.25%.The Baht has been strong for 2 years ,now.All that seems to be happening is that the Baht, maybe even slightly strengthening. No chance of it weakening, in the short term. Which is why so few Farang tourists. are coming here.

[Naam]

You don't have to,short term hedging is why the 15% tax was introduced to curb this and to be honest what logic do you bring to the discussion table anyhow?..A trumped up know it all obviously having a bad day...or are you always this high n' mighty?

always. 24 hours a day, 7 days a week. so what impact did the 15% withholding tax (introduced in october) on interest and capital gains have? foreigners not dumping billions anymore and then run but THB getting stronger? did THB weaken or strengthen vs. most major currencies?

[sydneyjed]

Thats my point..the introduction of a 15% tax was just a token gesture..and even then arms had to be twisted within government departments to come to the table.Even with the 15% returns are still better than U.S. and European markets,hence the 15% fades into insignificance in comparison!With the amount of financial institutions in on this of course they want to keep the gravy train running as long as possible..why wouldn't they?A black tulip bulb scenario waiting in the mist..lets wait and see!

[Wonderboy]

in your case a wee bit of logical thinking would help. i referred to the fairy tale "dumping billions and then run". that theory is nothing but ridiculous and i will not waste more time explaining.

How about you some times contributed with some substantial information of which I think you have plenty? Would been preferred over your ever present one liners picking on something "wrong" in readers submissions. If you think it is so futile to explain, why even bother to point out the errors? And is the very sarcastic writing style really needed? I haven't read all you have written (12000+ submissions), but all I can remember is in the same style as above.

WB

[personchester]

The FX market is actively alive 24 Hrs around the clock, and although the traders are guided by economical research, the risk factor is still casino style and the trading financial institutions & banks gain and lose billions on a daily basis, nevertheless, under normal circumstances the major global currencies remain generally balanced.

Unfortunately, all this changed with the "sub prime funds" disaster (Wall Street) and the demise of the US major Bank lender "Lehman Brothers" which the US government refused to baleout, as a result the bank collapsed which is now regarded as a mistake, had the US government supported Lehman Brothers by pumping funds into it, then the international financial crisis would not occurred.

Yesterday (via electronic transfer) the exchange rate of GBP / THB was 46.66. prior to the financial disaster the average rate of GBP / THB was between 69 -72. a decline of some 35%, a disastrous decline indeed, the USD and EUR also declined but not anywhere near the GBP decent.

Many Brits retired in Thailand suffer financially as a result of this, and one hopes that matters will eventually improve, but time-wise, no one knows, the predictions are 2 to 3 years, and then perhaps slowly upwards, well lets hope so.

The post above is a string of disjoint, mostly incorrect, and irrelevant nonsense. The foreign exchange market does work and is "balanced" (that's what markets do, balance supply and demand) -- so what? Lehman was not the linch pin to the global financial crisis. There were many causes, including Ginnie Mae and Fannie Mae, and the main blame rests with the US Government and its policies to inflate housing demand for a decade (it happens that housing is one of the main securities held by banks for their loans -- that bubble burst). Most people claim that the "Global Financial Crisis" started in September 2008. On 2 September 2008, the GB Pound bought 61.247 Thai Baht. Certainly, the drop in value of the Pound in relation to the Baht has been significant, but in no way as large as is suggested.

A strange reply, the style is aggressive, and the knowledge is poor, may I therefore point out ... Ginnie Mae is not the provider, not the investor, and not the owner of any financial loans, Ginnie Mae is merely a US government backed organisation that provides security (guarantees) for loans (mortgages) provided by other lenders.

In addition we have Fannie Mae, and Freddie Mac, they also provide a US government backed loan guarantee for providers of mortgages, but unlike Ginnie Mae they actually do provide loans directly to mortgage borrowers, thus Fannie Mae and Freddie Mac are not comparable with Ginnie Mae.

Moreover, the activities of Fannie Mae, Freddie Mac (forget Ginnie Mae) and other US mortgage providers have no impact on the Foreign Currency Exchange Market (FX) because they are US domesticated loan providers for home purchasers, and they are protected by being a member of GSC (Government Sponsored Enterprises) and as a result were, and are totally supported by the US government.

Fannie Mae's title is ... Federal / National Mortgage Association.

Freddie Mac's title is ... Federal Home Loan / Mortgage Corporation

Both are supported by FHFA (Federal Housing Finance Association) and MBS (Mortgage Backed Society)

Ginnie Mae is merely a loan (mortgage) guarantee provider on behalf of the government.

On the other hand, the activities of the collapsed major international lending bank "Lehman Brothers" had great impact on the FX by continuously lending large sums to international financial institutions and banks, when Lehman collapsed the money was no longer available, as a result the liquidity of International banks and institutions declined to such an extent that the governments of many countries (US included) had to bale them out, this could of course only be done by additional money printing, (the BoE did not want to use the term "printing" thus the wording "quantitative easing" was used) as a result of this USD and EUR went down, and GBP went down the hill.

As is well known to Brits in Thailand, during the last two years (approx) the GBP went down from 72 THB to the mid 40's THB a decline of 35 % approx.

Edited December 3, 2010 by personchester

[Kwasaki]

in your case a wee bit of logical thinking would help. i referred to the fairy tale "dumping billions and then run". that theory is nothing but ridiculous and i will not waste more time explaining.

How about you some times contributed with some substantial information of which I think you have plenty? Would been preferred over your ever present one liners picking on something "wrong" in readers submissions. If you think it is so futile to explain, why even bother to point out the errors? And is the very sarcastic writing style really needed? I haven't read all you have written (12000+ submissions), but all I can remember is in the same style as above.

WB

Naam writes with precision and not on speculation if he wishes to point an error that is his right to do so on this forum.

Personalities are different on here and it would be boring without it, if wish to know some thing financially " naam " would be one of the ones I would ask over others here.:jap:

Naam''s alien fan club over and out.