Gbp Foreign Exchange Rate

[Joey Boy]

ATM withdrawals in Thailand have been averaging over 70 THB to 1 GBP for a good few years after the UK banks add their 1.5% charge.

I withdrew THB 20'000 on the 13th of Feb, and after the 1.5% foreign ATM withdrawal fee it’s ended up @ 65.4 THB to the GBP. I know it’s been averaging the mid 66's since Christmas and I’m relatively new here compared to a lot of expats, but it’s the lowest I have ever seen it!

I’m just wondering if there’s any economists out there who could shed a little light on why this is happening and when, if at all this declining trend will shift the other way?

Thx

[iansc]

ATM withdrawals in Thailand have been averaging over 70 THB to 1 GBP for a good few years after the UK banks add their 1.5% charge.

I withdrew THB 20'000 on the 13th of Feb, and after the 1.5% foreign ATM withdrawal fee it’s ended up @ 65.4 THB to the GBP. I know it’s been averaging the mid 66's since Christmas and I’m relatively new here compared to a lot of expats, but it’s the lowest I have ever seen it!

I’m just wondering if there’s any economists out there who could shed a little light on why this is happening and when, if at all this declining trend will shift the other way?

Thx

EURO,POUNDS,US$,AUSTRALIAN $ have all been declining in value since november last year..i am from australia and i was getting 31.55 in november last year, today i got 28.95..a big drop but would be in line with your currencies decline...some would disagree but i think we have further to go..depending on what happens politicaly in thailand and USA interst rates wise.

[JimmyGreaves]

I hope not, keeping my fingers crossed that it will stabalise again at around 70THB to the Pound

Recent History:

http://www.x-rates.com/d/THB/GBP/data120.html

Edited February 15, 2006 by jflundy

[englishoak]

Not an economist or in the business but have been researching a lot about investing, exchange rates, etc etc. In fact as much as possible as i want to know if I have enough to retire to Thaialnd in comfort.

I have been checking on past exchange rates and there are some scary figures out there. An example is the early - mid 90s not really that long ago.

the rate then was a measley 35 - 38bht to the Pound until the crash of 97 and from there a steady climb up to present. In my scenario I would want to be prepared for a similar situation in the future and know I was capable of living ok. Now thats quite a horrific exchange but there is a silver lining here.

At the time interest rates were very good too, up to 15% in 90 and coming down to between 10 - 5 % after 93 - 97. So If you have savings etc it should offset quite a bit in the event of a swing back, just seems to be the way of it. My main concern would be if interest rates in the uK were low and the exchange fell. It's also possible in the event of a recession in the UK to kick start a recovery by dropping rates. There is room to do this as we have the highest rates in europe and am sure The bank of England have this in mind as a safety measure. Look how they used it gently but firmly to curb the housing frenzy in 2004 - now.

I believe a good average to work on is 50 bht - £1. It's agood safety line and allows saving at the positive end. Always good for taking inlfation into account and much more ability to "struggle through" when times are bad.

It can take time to balance out and if you live somewhere forever is a long time Expect changes in the economy on both sides. Im sure you were smart enough in the UK to realise although not constant there are economic cycles. I'll give you an idea of the UK economy right now. It has been in constant growth for something like over 10 years, the longest sustained economic growth in over 200 years. We have also been the only G-7 country to avoid a recession in the last 6 years. So what do you think the future holds? continued growth infinitum? I doubt it very much.

Be you Labour or not ( i'm not) you have to agree we are very lucky to currently have Gordon Brown as the UK Chancellor of Exchequer – a man who is considered by the FX market to be the most skilled and effective public policy manager in the world. He will not be there forever, then what happens?

My point is NOTHING stays the same and you should prepare for a downturn in the UK sometime in the near future. It WILL happen. Then again the same can be said of Thailands economy. IMO it has been growing way too fast to sustain and a likely correction becomes possible the longer it continues.

I don't pretend to be an expert or even that clued up it just makes common sense to me.

[Guest endure]

ATM withdrawals in Thailand have been averaging over 70 THB to 1 GBP for a good few years after the UK banks add their 1.5% charge.

Why are you paying foreign ATM fees? Why don't you get yourself a Nationwide Flexaccount? ATM withdrawals are free and you get the interbank rate (near enough).

[GuestHouse]

I think that Englishoak’s approach has a lot going for it. We see frequent posts here from people trying to estimate the cost of living in Thailand and a lot of ‘pie-in-the-sky’ figures for how much money is required to enjoy a retirement.

But take a look the GBP v Bht and there has been a 11% slip since September –anyone who is on a fixed income from the UK and already near the lower limit for meeting the pension visa income requirements must be worrying.

Likewise anyone who is taking out a mortgage/loan in Thailand to buy a house or car but supporting the loan from overseas.

My view is that purchases in Thailand need to be cash and the sooner you get the house/car bought the better. If we accept that buying anything in Thailand is a gamble, and the old adage that you should not invest any money in Thailand that you can’t afford to loose, then it becomes clear that ‘Yes retirement near the line is doable in Thailand but it comes with risks’ recent moves in exchange rates simply push more people into the higher risk band.

I’d also note that the exchange rate is cyclic and tends to go more in favor of overseas currencies around mid year, so if I was retired in Thailand and near the limit on income, I’d be looking to bring money in during the (almost predictable) rise around June time.

As I’m not retired yet, I’m just going to keep banging money into pensions/savings, and like Englishoak, I’m going to assume future price around Bht50 to the pound.

Oh and remember, its not just the exchange rate, it’s the local inflation + exchange rate, right now if we say inflation is at 8% and the exchange rate is down 11% we are looking at a rise in the cost of living of 19%, that to people on fixed incomes is a huge increase in costs.

[TBWG]

Why are you paying foreign ATM fees? Why don't you get yourself a Nationwide Flexaccount? ATM withdrawals are free and you get the interbank rate (near enough).

Hi Endure

I have just opened a flex account with Nationwide soley with the intention of using it for ATM transactions in LOS.

My previous ATM transactions have always been with Natwest and incurred 2 small charges Nationwide assures me that I will not have to pay either of these charges, but that sounds to good to be true.

Is that correct?

Thanks

TBWG

[Rinrada]

Why are you paying foreign ATM fees? Why don't you get yourself a Nationwide Flexaccount? ATM withdrawals are free and you get the interbank rate (near enough).

Hi Endure

I have just opened a flex account with Nationwide soley with the intention of using it for ATM transactions in LOS.

My previous ATM transactions have always been with Natwest and incurred 2 small charges Nationwide assures me that I will not have to pay either of these charges, but that sounds to good to be true.

Is that correct?

Thanks

TBWG

Yes get a decent card that is not provided by the overseas relations of the Patti 5 bt bus drivers.

BTL...

Quick check on what the £-Bt. Exchange Rates were during one week of Feb 1994 (oando fx) and these were good.

I remember changing some £ dosh then and got @ 35 bt to the £....so benchmark.

Albiet the beer was cheaper then but only Sing-Kloisters & Amarit available.......

Can you imagine going to the Nana and being charged 140 bt a throw....

09.02.1994 37.22760

10.02.1994 37.17160

11.02.1994 37.24220

12.02.1994 37.24220

13.02.1994 37.30850

14.02.1994 37.32730

15.02.1994 37.31330

Dont think it could ever go so low again but..............MPrai

[englishoak]

GuestHouse I agree totally about the inflation factor. Anyone ignoring this factor in future estimate of savings is going to crash and burn.

Like many people out there I fully intend to to relocate to LOS. I do however take a very detailed look at all factors regarding having enough money.

As GuestHouse said DO NOT invest more than you can afford to lose, I have spent quite a long time living in LOS and would love to get a business going. The fact is i'm not prepared to risk the amount needed to set up and run a profitable business in LOS. I am not afraid of hard work but still the risk of loss is too great for me

Something I have been looking into in the UK is property. I would be very unhappy investing in a buy to let unless it was 100% paid for. Reason being it's a lot of capital tied up. In the event of recession it can be hard to sell/negative growth and interest rates tend to rise (cost) of mortgage. I mention this as quite a few brits I met in Thailand are financed this way.

I am also more than wary of pension plans ATM. There semms to be too many announcing they are not performing as expected. Do I see a similarity forming with the old endowment? I Hope not but I wonder.

I have thought on more than one occasion "thats it I can now retire" but everytime I find another reason to re-adjust my required fund. Now it could be that i'm just a very cautious guy or paranoid. I am that close, but for now Like guesthouse I am just working and saving as much as possibe.

I met a couple of guys while living there in 2001 --04 both were caught in the stock crash only one had a plan B and emergency savings for 5 years. Guess which one had to leave his wife family etc to go back home?

No when I leave these cold English shores I really don't want to return in a position where I am worse off and face a life of increasing poverty in the UK.

[Guest endure]

Hi Endure

I have just opened a flex account with Nationwide soley with the intention of using it for ATM transactions in LOS.

My previous ATM transactions have always been with Natwest and incurred 2 small charges Nationwide assures me that I will not have to pay either of these charges, but that sounds to good to be true.

Is that correct?

Thanks

TBWG

Yes, that's right - no charges at all and you get a good exchange rate too

[Prakanong2005]

Before earning in Euro's I always worked on 60THB to the GBP for my holidays in Thailand and anything else is a bonus.

I can remember my first time getting something like 34THB to the GBP in Blighty to when I got 92THB I think it was at Christmas 97.

[Joey Boy]

Hi Endure

I have just opened a flex account with Nationwide soley with the intention of using it for ATM transactions in LOS.

My previous ATM transactions have always been with Natwest and incurred 2 small charges Nationwide assures me that I will not have to pay either of these charges, but that sounds to good to be true.

Is that correct?

Thanks

TBWG

Yes, that's right - no charges at all and you get a good exchange rate too

You can set these up online from Thailand to a Thai address?

[Guest endure]

Hi Endure

I have just opened a flex account with Nationwide soley with the intention of using it for ATM transactions in LOS.

My previous ATM transactions have always been with Natwest and incurred 2 small charges Nationwide assures me that I will not have to pay either of these charges, but that sounds to good to be true.

Is that correct?

Thanks

TBWG

Yes, that's right - no charges at all and you get a good exchange rate too

You can set these up online from Thailand to a Thai address?

No - you have to be resident in the UK to open it and after you've opened it you have to maintain a UK address of some sort.

[Baht Simpson]

If the rate did slip to 50 the equivalent cost of transferring BHT 800,000 to service the 'retirement' visa would escalate to a cool GBP 16,000, as opposed to around GBP 12,000 now. That's a lot of money if the rate stays there for a number of years.

[TBWG]

Hi Endure

I have just opened a flex account with Nationwide soley with the intention of using it for ATM transactions in LOS.

My previous ATM transactions have always been with Natwest and incurred 2 small charges Nationwide assures me that I will not have to pay either of these charges, but that sounds to good to be true.

Is that correct?

Thanks

TBWG

Yes, that's right - no charges at all and you get a good exchange rate too

Thanks Endure

A win win situation, don't come across that very often.

TBWG

[samran]

Totally happy myself...my income is a mix of THB and EUR...kinda balances out nicely whatever happens!

[davidbkk]

The big UK banks are a massive rip-off at the moment.

I used to bank with Lloyds until somebody put me on to the Nationwide.

I e-mailed Lloyds to ask what they were charging me.

They told me a 2.75% 'conversion' fee plus a 1.5% 'foreign transaction' fee.

Their exchange rate was also a couple of baht below the Nationwide.

They told me that they thought their charges were "broadly in line with those charged by our competitors".

For a 200GBP withdrawal, Lloyds charged me roughly 12.50GBP (approaching 1000Baht) more than Nationwide.

I e-mailed them back to point this out and they didn't reply.

I now use the Nationwide, I would urge other people to do the same if they can.

[Anon999]

Be you Labour or not ( i'm not) you have to agree we are very lucky to currently have Gordon Brown as the UK Chancellor of Exchequer – a man who is considered by the FX market to be the most skilled and effective public policy manager in the world. He will not be there forever, then what happens?

My point is NOTHING stays the same and you should prepare for a downturn in the UK sometime in the near future. It WILL happen. Then again the same can be said of Thailands economy. IMO it has been growing way too fast to sustain and a likely correction becomes possible the longer it continues.

I don't pretend to be an expert or even that clued up it just makes common sense to me.

Not sure what you've been reading about Gordon Brown but not everyone is so impressed with his performance. Just consider what percentage of the working population are now paid by the state, from UK taxpayers money, since the current incumbents came to power in 1997. A large number of these as a direct result of the Treasury. Furthermore the hit on all of our pension funds has made us a lot worse off than we would otherwise have been not to mention the resultant 'black hole'.

You're right nothing stays the same and since the Thai baht was allowed to float things have fluctuated but that's normal. However, the £ sterling has been getting weaker for a while due to cyclical movements. If my memory serves me correctly in 2004 I was getting over 75 baht/£.

If you want to cover yourself it would seem sensible to hang onto your UK property if possible and benfit from renting it out long term via a lettings agent. Shop around and you can get their fees down to under 10%. However, unless you fill in an Inland Revenue form the lettings agent is forced to deduct tax on all rent. Better to get it gross and benefit from the interest.

[englishoak]

Not sure what you've been reading about Gordon Brown but not everyone is so impressed with his performance. Just consider what percentage of the working population are now paid by the state, from UK taxpayers money, since the current incumbents came to power in 1997. A large number of these as a direct result of the Treasury. Furthermore the hit on all of our pension funds has made us a lot worse off than we would otherwise have been not to mention the resultant 'black hole'

Your right to a point, mabe a recession should not have been avoided ? I think economies are cyclical and it would have been better to go through the cycle rather than avoid it. My point is he was able to navigate and circumvent it rather well and UKplc has continued to grow ( at the moment) He is in his circle considered to be the most competent treasurer in office we have had for a long time. Only time will tell if he made the right decisions or not

If you want to cover yourself it would seem sensible to hang onto your UK property if possible and benfit from renting it out long term via a lettings agent. Shop around and you can get their fees down to under 10%. However, unless you fill in an Inland Revenue form the lettings agent is forced to deduct tax on all rent. Better to get it gross and benefit from the interest.

Quite agree this is probably the best route to go in the long run.