Now 39 Baht For One Us Dollar

[george]

Now 39 baht for one US dollar

The Thai economy is recovering fast or is the US economy weakening fast? Fact is that the Thai baht has already broken through 39 to one US dollar, and is expected to continue to strengthen against the US currency in the same direction of other currencies, according to a senior money dealer.

He said the dollar was expected to weaken further in an anticipation that the US government would continue to adopt the weak dollar policy. The baht may touch 37 to the dollar mark this year.

Thai exporters seem to be prepared already, since the strengthening of the baht compared to the dollar is not an unusual phenomenon given Thailand's strong economic growth now.

--Thai News Agency

Exchange rates:

http://www.thaivisa.com/exchange_rates.0.html

[george]

FOREIGN EXCHANGE: Baht too strong, says BOT chief

BANGKOK: The baht is already "too strong" and might harm the country's economic growth, the Bank of Thailand governor said yesterday.

Shortly after the statement from the governor, the Thai currency slipped to Bt38.93 from its three-and-a-half-year peak of Bt38.82 to the dollar.

The currency closed at the end of Asian trading yesterday at Bt39.92.

The governor's comment was a reaction to the statement made by Prime Minister Thaksin Shinawatra yesterday that the currency was likely to get stronger. Following the premier's statement, the baht hit its highest value on record since June 8, 2000.

Pridiyathorn said the baht is too strong compared to other regional currencies, considering its competitiveness. He said the Thai unit had continued to appreciate against the dollar over the past few days, while other key currencies including the euro had already weakened.

"Over the past two to three months, the dollar has been weak, while the euro and the baht have been stronger. But in the past few days, other currencies ceased their appreciation, while only the baht was stronger," the governor said.

Pridiyathorn declined to indicate a real value for the currency according to the country's competitiveness, or so-called real effective exchange rate. But he insisted that the stronger baht was not due to unusual currency speculation or a high trade surplus.

He said the baht appreciation was mainly due to a flood of capital inflow from investors who had "too much confidence" in Thailand's economic prospects. Capital also flooded the stock market.

In addition, investors believed the baht would be stronger and had held the currency rather than sold it, he said.

"Whatever happens that is in line with market mechanisms, we will allow. But if it moves too fast, we must take a look at it," the governor said.

He said a baht that was too strong would harm the country's GDP growth.

The central bank recently forecast 2004 economic growth at 5.5-6.5 per cent on the assumption that the baht would remain at around 39 to the dollar. The BOT will review its GDP target at the end of this month, however.

The National Economic and Social Development Board recently predicted Thailand's GDP growth this year at 7-8 per cent, with export growth forecast at 14-15 per cent.

According to the central bank's inflation report, if the baht is stronger by 1 per cent, GDP growth over the next four quarters would decrease by 0.32 per cent.

Compared to end-2003, the baht yesterday was stronger by 1.7 per cent against the dollar, compared to 1.1 per cent against the euro, 1.2 per cent against the Indonesian rupiah and the Korean won, 0.3 per cent against the Singaporean dollar and 0.2 per cent against the Philippines peso.

--The Nation 2004-01-14

[dr_Pat_Pong]

I think it is much more about the softening of the $US. Not down to the PM's economic brilliance.

[taxexile]

the dollar ???

whats that ?

sounds like yesterdays currency to me.

its weak,broken,crumbling,finished,kaput and arthritic.

if that man bush doesn't take some economy lessons quick,then some countries holding lots of dollars in their reserves will start to offload them and the dollar will quickly head for the basement to keep company with the rouble,the rupee and the dong.

the pound and the euro,now thats what i call currency.

[Pink Mist]

A quiet achiever the AUD$

[KevinN]

I will have to agree with the Dr. on this one,it sure does look good for the PM. to have the baht over inflated and showing stronger in the paper.

But where we live we can see no economic upturn and the people are still working for 100 baht per day,in fact I hired 2 guys to work with my father in law yesterday and they wanted 100 baht for the days work.and that is the same as 2 years ago.

[bmanly]

Hey Bronco, if the Aussie $ keeps going the way it is then we will be buying the same amount of baht the USD is. It was only 2 years ago we were getting 24 baht to the AUD and the USD was getting 44 baht. Now it's 30 and 37 respectively. I just shipped some over ready for my next visit

[Pink Mist]

We'll call it BHP, yes it's a great conversion rate now. When I bought my,let me re-phrase that paid for the house in Nov 2002 the rate was going up, I was stalling but anyway was cheap anyway.

I reckon USD$ and the quiet achiever will be equal sooner or later.

[dr_Pat_Pong]

It will be bad news for Oz exporters if it continues to rise.

[Pink Mist]

Yes Doc the profits of gloom moaned as the dollar moved into the 60 cent zone.

The other side of the coin, it's good news for importers.

We could argue if one balances the other and in a lot of cases that is true

Then we can get onto the subject of tariffs but it's already too heavy for me.

I just think a strong dollar can't hurt.

[dr_Pat_Pong]

It is a misconstrued ( by the public ) filler for Johnny's electoral stocking. Unless Johnny is sprung ' in flagrente ' with an underage boy, he keeps the keys to the executive washroom on the hill under the B I G Oz flag.

[Pink Mist]

You know why he is staying on now, the libs dont have credible succesor.

costello is a clown, abbot is a thug, anderson national enough said, who else? cant forget my great grand father was part of the consitution downer and I was the pultney grammar debating champion.

They are a sorry lot, no wonder himmler is staying on

[The_Eye_Of_Sauron]

The Thai Government has a problem here.

It should be thinking about putting up interest rates as inflation is setting in.

...but if it does, that will make the Baht strengthen to a level that makes life hard for Thai exporters, especially when the Chinese currency remains inflexible.

In this way, the US dollar's slide makes life very very difficult for little countries.

[Thaiquila]

The dollar's slide (against the Euro, baht, just about everything) is good for the US economy and bad for Europe, as it stimulates exports. It is of course very bad for expats whos income is US dollar based. And it is likely to get worse in the short term.

However, there is a long term optimistic scenario for US dollar based expats, long term as in maybe three to five years from now. If the US economy makes a full recovery (including job growth) and there is some kind of successful political effort made to decrease the current massive US budget deficits, the dollar should eventually come back. These things work in cycles. I am not sure which US political party might pull this off, but in recent history it is the democrats (Clinton) who have controlled deficits, while it is the republicans (Reagan, Bush) who have grown massive deficits. The leading Democratic candidate Dean has a long record of making balancing the budget a top priority.

[narit]

I think with growing US current deficiet and budget deficiet the US dollar is no longer proper benchmark anymore. I think why don't we look at Euro instead.

[mouse]

Here comes 40 to the Dollar any day now.

[britmaveric]

Dollar/Sterling are what world financials are based on, doubt that euro will ever make an impact. As for low dollar rate- just a cycle- don't be fooled into thinking this will stay this way.

[Thaiquila]

The consensus of economists is that EVENTUALLY the CHINESE YUAN will be the worldwide reserve currency, replacing the dollar.

Ponder on that thought as you are sucking your 1000 year old eggs.

I don't know the time frame on this change, five years or fifty years, but I wonder what the effect would be on dollar/baht and euro/baht rates, given the close ties of Thailand to China.

[ericsshop]

Keep the dollar weak pleaaaasssse, my business has gone up 50% since the drop in the dollar with increased sales to Europe and Asia. Dollar was too strong too long. Tourism that was sliding in the US for 2 years is not shooting up with an influx of Europeans seeing the cheap dollar as a better holiday. Loving every minute of it ca'chingggggg.