The Baht Maintains It’s Strength.

[bdenner]

Since Thaskin announced new elections on the evening of the 24th the Baht has strengthened against major currencies eg:-

X-Rate Source: XE.com Universal Currency Services

24th Feb – USD$1.00 = 39.304 Baht

28th Feb – USD$1.00 = 39.221 Baht

Baht Strengthened by 0.21%

24th Feb – GBP1.00 = 68.85 Baht

28th Feb – GBP1.00 = 68.21 Baht

Baht Strengthened by 0.93%

24th Feb – AUD$1.00 = 29.02 Baht

28th Feb – AUD$1.00 = 28.90 Baht

Baht Strengthened by 0.41%

IMO this seems to defy all logic given the current political unrest in Thailand.

Is it that the Thai economy is so strong as to offset other factors?

Is the bubble about to burst?

What don’t I understand?

[sinkorswim]

cant help you with the answer but I really hope it goes back I am losing approx 14000 baht every months as I get my money in UK £.

[Heng]

For many of those in business, the "political unrest" is barely on the radar. Any "radical change" likely to come out of all this would be about as "radical" as changing fonts on company letterhead. In the end, not a big deal.

[sleepyjohn]

24th Feb – GBP1.00 = 68.85 Baht

28th Feb – GBP1.00 = 68.21 Baht

Baht Strengthened by 0.93%

I'm not sure about this....

I saw 69.02 offered yesterday on the Telex Transfer rate at the BKK bank, so the mid rate would be even better.

The driver for the main rise over recent months may have been the import of funds for the stockmarket rise....there has also been a bit of a sell off but that might have been more local.

The currency markets may have previously discounted the political problems and now have breathed a sigh of relief at Thaksin's expected re-election.

Eastern currencies generally may be allowed to rise a bit long term as they have to pay more for oil, but I'm not sure that Thailand fits in this category.

Personally i wouldn't want to have too many baht at this price.

cant help you with the answer but I really hope it goes back I am losing approx 14000 baht every months as I get my money in UK £.

You must also be gaining more than that compared to 1998 when I first observed the baht price.....by the way can you lend me a fiver?

Edited February 28, 2006 by sleepyjohn

[OldAsiaHand]

For many of those in business, the "political unrest" is barely on the radar. Any "radical change" likely to come out of all this would be about as "radical" as changing fonts on company letterhead. In the end, not a big deal.

Dead on. The movements of the baht are far more influenced by global movements of the major currencies than local events. The local fixation on the value of the baht relative to foreign currencies is largely another manifestation of the Thai fantasy that people everywhere care about Thailand and constantly scheme either to harm it or to take it over.

[chownah]

I think that the change reported in the original post is typical of the minor fluctuations which happen constantly...I would not call this a strengthening in any long term sense of the word...unless the trend continues for several days.

[sinkorswim]

You must also be gaining more than that compared to 1998 when I first observed the baht price.....by the way can you lend me a fiver?

I was not living here then so it didnt effect me...if it keeps going the way it is I might have to stop enjoying myself .................I could lend you 50 satang if you are really short of cash at a very reasonable rate of interest.

[rainman]

yeah the USD is really bad, especially since i get my income in USD ....it used to be 42.5 a few months ago, now i'm lucky to get a 39.0

[cclub75]

Dead on. The movements of the baht are far more influenced by global movements of the major currencies than local events.

I agree.

The world is full of cash.

regarding the SET for instance, foreigns investors are net buyers.

The present keyword is "diversification". When you don't know what to do exactly with your cash, that you see that -obvisously- Asian countries are developping veeeeeeeeery fast (It requires growth to put one pick up car and one mobile phone in each household of each country....)... well then... why not invest in Thailand ?

So to summarize : THB is "strong" (beware, we need to relativize... 1 USD = 25 THB before 1997...), not because Thai fundamentals are very good, but simply because it's raining cash.

I should add that there is also a little technical explaination : interest rates are increasing (and it's not finished).

[astral]

1997 when the baht hit 90 to the UK Pound was the day to change money.

[JimmyGreaves]

Bloody hel_l it's dropping like a stone today:

Can do with out this as I've gotta transfer some big bucks soon!

1.00 GBP United Kingdom Pounds = 67.5715 THB Thailand Baht

[Cheeky Farang]

Bloody hel_l it's dropping like a stone today:

Can do with out this as I've gotta transfer some big bucks soon!

1.00 GBP United Kingdom Pounds = 67.5715 THB Thailand Baht

BANGKOK BANK EXHANGE RATES 02.03.05

USD1 USD : 1 = 37.32

USD5 USD : 5-20 = 37.70

USD50 USD : 50-100 = 38.15

GBP United Kingdom 1 = 66.24

[Rinrada]

02/24/2006 68.93030

02/25/2006 68.94780

02/26/2006 69.02070

02/27/2006 69.02960

02/28/2006 68.51970

03/01/2006 68.45820

03/02/2006 68.49880

Its actually gone up a smidgen...however.......

Heard that the Euro Central Bank will be raising their interest rates today so.......

[JimmyGreaves]

Hi Rinrada

What's the source of these rates?

www.xe.com is always close to my transfer rates and yours are way up!

Currently

1.00 GBP United Kingdom Pounds = 67.5316 THB Thailand Baht

Edited March 2, 2006 by jflundy

[marshbags]

24th Feb – GBP1.00 = 68.85 Baht

28th Feb – GBP1.00 = 68.21 Baht

Baht Strengthened by 0.93%

I'm not sure about this....

I saw 69.02 offered yesterday on the Telex Transfer rate at the BKK bank, so the mid rate would be even better.

The driver for the main rise over recent months may have been the import of funds for the stockmarket rise....there has also been a bit of a sell off but that might have been more local.

The currency markets may have previously discounted the political problems and now have breathed a sigh of relief at Thaksin's expected re-election.

Eastern currencies generally may be allowed to rise a bit long term as they have to pay more for oil, but I'm not sure that Thailand fits in this category.

Personally i wouldn't want to have too many baht at this price.

cant help you with the answer but I really hope it goes back I am losing approx 14000 baht every months as I get my money in UK £.

You must also be gaining more than that compared to 1998 when I first observed the baht price.....by the way can you lend me a fiver?

................................................................................

.................end

You forgot to take into account the rising cost of living and the purchasing power of say 2004 and 1998 ( allowing for 2005 and the effects of the oil prices as a seperate consideration. ) in Thailand.

In real terms i find my purchasing power has gone down on what my family needs.

marshbags

[Rinrada]

Hi Rinrada

What's the source of these rates?

www.xe.com is always close to my transfer rates and yours are way up!

Currently

1.00 GBP United Kingdom Pounds = 67.5316 THB Thailand Baht

Oanda.....best FX that i have found....

Select FX History....

http://www.oanda.com/convert/classic

[OldAsiaHand]

The story around the markets is that Tamasek has been engaged in heavy buying out of Singapore during the last few days in order to fund the Shin tender. That coupled with the net foreign buying on the SET has raised demand for the baht significantly above normal levels.

I'd suggest you wait a few days. Unless something unexpected happens, the odds on the THB drifting back toward 39.2-39.5 have to be pretty good.

[Steve2UK]

Hi Rinrada

What's the source of these rates?

www.xe.com is always close to my transfer rates and yours are way up!

Currently

1.00 GBP United Kingdom Pounds = 67.5316 THB Thailand Baht

Oanda.....best FX that i have found....

Select FX History....

http://www.oanda.com/convert/classic

If you want to see a graph display for 30 days or 3/6/9/12 months, exchangerate.com is good:

http://www.exchangerate.com/charts.html?ac...¤cy=238&cid=225

(that link is set up to show UK£ - just click on the "Convert to" box to change for US$, Euro etc)

At the moment, it's best to have a stiff drink first - it looks like a bumpy ski-slope recently.......

[RAZZELL]

Surely the baht must weaken with all this political uncertainty...???

Or maybe the forex markets think Taksin's a shoe-in...so "same-same"...

[Carmine6]

Surely the baht must weaken with all this political uncertainty...???

Or maybe the forex markets think Taksin's a shoe-in...so "same-same"...

I guess this is a question for another thread, but what is the difference if he's in or out? Is the opposition's economic plan all that different? Pure ignorance on my part since I've mainly seen complaints about the way he's handled the issues in the South and corruption issues. But those seem to be frankly just political issues and not really substantive economic ones.

[socalbro]

I'm told the rate has to do with los making it's yearly payment to the World Bank on time for loans outstanding. Each year when the payment comes due and is paid in full it strengthens the Baht's standing against all other currencies regardless of current events.

Then as normal market forces come back into effect it always slides back down to about 40-42/$ again - hopefully this is the case and if my source is correct the cycle will continue so long as Thailand remains solvent and pays on time each year. By years end it should drop back to @41/$ and repeat.

Hurts like a mother F'er presently as my income's taking a good hit like the rest of you on monthly transfers from home...

[lopburi3]

Post 17 from OldAsiaHand is the reason provided in todays Bangkok Post as the deal must be completed by March 9 so time is getting short and it is a huge amount of money.

[Carmine6]

Post 17 from OldAsiaHand is the reason provided in todays Bangkok Post as the deal must be completed by March 9 so time is getting short and it is a huge amount of money.

This sounds good on paper, but why hasn't the Singapore dollar/baht rate changed much? From the highs late July to Sept. depending on the currency,

USD/Baht is down over 7%

Euro/Baht is down almost 9%

Australian $/Baht is down over 10%

Pound/Baht is down over 11%

Yen/Baht is down over 11%

Singapore Dollar/Baht is down only about 4%

Wouldn't the Singapore rate have had the most pressure? or are there other factors swamping the effects of this purchase? To me, it looks like there's been a lot of selling US dollars for baht since January.

Looks like the Yahoo labels got lost so left to right on top is baht per $US, Baht per Euro, Baht per Pound. Below is Baht per Singapore $.

Edited March 4, 2006 by Carmine6

[lopburi3]

Don't know but perhaps because they are using USD to buy the Baht?

[lovethailandlongtime]

Post 17 from OldAsiaHand is the reason provided in todays Bangkok Post as the deal must be completed by March 9 so time is getting short and it is a huge amount of money.

This sounds good on paper, but why hasn't the Singapore dollar/baht rate changed much? From the highs late July to Sept. depending on the currency,

USD/Baht is down over 7%

Euro/Baht is down almost 9%

Australian $/Baht is down over 10%

Pound/Baht is down over 11%

Yen/Baht is down over 11%

Singapore Dollar/Baht is down only about 4%

Wouldn't the Singapore rate have had the most pressure? or are there other factors swamping the effects of this purchase? To me, it looks like there's been a lot of selling US dollars for baht since January.

Looks like the Yahoo labels got lost so left to right on top is baht per $US, Baht per Euro, Baht per Pound. Below is Baht per Singapore $.

And it doesn't look like a seasonal change in either....If i rememner correctly,the pound at about 74/75 baht this time last year.

[Carmine6]

Don't know but perhaps because they are using USD to buy the Baht?

I was thinking this too, but they don't have a lot of US assets. US$3.8 billion of their US$64 billion in assets as of March 2005 was US based, so it's theoretically possible.

My theory is that US investors moved a lot of money into international mutual funds and hedge funds recently. Returns in the US were flat last year, but emerging markets in Asia and Latin America did great. So there's a herd effect now with money going toward international funds. Thailand has pretty good fundamentals now, so it's getting lots of attention. It's no accident that a lot of the high end resorts are run by US companies.

Throw that on top of tourist season and whatever Tamasek is doing and you get a nice run in the baht. 2 of these go away soon, so we'll see if it swings the other way.

....

And it doesn't look like a seasonal change in either....If i rememner correctly,the pound at about 74/75 baht this time last year.

Good memory. Those are 1 year charts so the very left is 1 year ago. You're right on.

[English Noodles]

This is some of the best stuff i have read on Thai Visa. Great thread and very interesting stuff. Keep it up guys i am learning alot.

Noodles.

[cclub75]

Post 17 from OldAsiaHand is the reason provided in todays Bangkok Post as the deal must be completed by March 9 so time is getting short and it is a huge amount of money.

You are right. The tender offer is worth 2 billions USD !

It will end... tomorrow.

Here is part of the document on SET website, for SHIN.

http://www.set.or.th/set/stockquotation.do

type "SHIN"

and then "company news" link.

And check document on 17 february.

Cedar (thai nationality) and Aspen (foreign) have 49.59 % (bought on 26 january).

The tender offer is 49.25 THB per share, and address the 50% remaining shares.

Aspen will reach the maximum foreign shareholding = 47.2 % (Thaksin changed the law just before the deal...)

Name No. of shares % holding

1.Cedar Holdings Limited ("Cedar") 1,008,548,449 33.62

2.Aspen Holdings Limited3)("Aspen") 479,191,671 15.97

Subtotal 1,487,740,120 49.59

3.Thai NVDR 68,146,658 2.27

4.American International Assurance 63,753,500 2.13

Company, Limited-DI-Life

5.UBS AG Singapore Branch 61,747,100 2.06

6.Norbax Inc.,18 55,114,700 1.84

7.HSBC (Singapore) Nominees Pte Ltd. 51,784,819 1.73

8.Chase Nominees Limited 42 42,955,320 1.43

9.State Street Bank and Trust Company 42,446,368 1.41

10.Singapore Telecom International 32,428,600 1.08

Pte Ltd.

11.Other shareholders 1,093,716,242 36.46

Subtotal 1,512,093,307 50.41

Total 2,999,833,427 100.00

[nikster]

You are right. The tender offer is worth 2 billions USD !

2Bn sounds like a lot, but is that enough to drive up the THB? I mean, it's the best explanation so far, it's not like Thailand's economy is extremely stable or strong.

A collapse of the USD has been predicted for a while now, but this isn't it as all the other currencies are down vs the baht, too.

If I had to guess I would bet that Thaksin is very busy right now transferring his THB into other currencies... a good time for that

Anyway, thanks for the info, guys.

[barryofthailand]

As i've said before, this happens every year about this time. If you do a forum search you will find a thread from last year, the year before, and before. Last year the thread was quite extensive as everyone thought the U.S. Dollar was going to strengthen to an all time high which as we know now it never happenned. I predict in around may or june the dollar will strengthen causing the baht to weaken against the dollar. That's the time to transfer some cash to LOS.

Barry