Potential Layoffs If Thai Baht Touches Bt27/ U S Dollar: Survey

[webfact]

Potential layoffs if Thai baht touches Bt27/ US dollar: Survey
By English News



BANGKOK, April 23 –A number of Thai entrepreneurs fear they may need to lay off employees if the baht strengthens to 27-27.90 against the US dollar, according to a survey by the University of the Thai Chamber of Commerce (UTCC).

UTCC Business Forecasting Centre director Thanawat Polvichai released the survey result from among entrepreneurs nationwide on possible negative impacts from the baht which is hovering around Bt28.80-29.10 against the greenback.

According to the survey, 38.1 per cent said the current rate is moderately appropriate, while one in three said the current rate is definitely not appropriate.

Moreover, 42.1 per cent of respondents said the current exchange rate undermined their businesses regarding competitiveness and exports.

Nearly one fourth -- 23.8 per cent -- said it could cause a drop in exports.

Most entrepreneurs surveyed said the proper currency exchange rate should remain around Bt30.48 per dollar. The strengthening of the baht to 29.18 is acceptable but if it rises further to 27-27.90, more than 12 per cent said they will have no choice but to lay off employees and 9.8 per cent said they have to close their businesses.

The government should intervene to prevent the baht from a rapid appreciation and manage the unit to stay between Bt29-30 per US dollar, according to those surveyed.

The Bank of Thailand has also been urged to cut money exchange fees and find sources to offer soft loans for help those affected, or the bank should cut interest rate and rein in foreign capital inflows. (MCOT online news)


-- TNA 2013-04-23

[BrianCR]

That's a very interesting comment and perspective on the Thai Baht, can you share any other interesting opinions that you may have?

[ginjag]

If this trend continues there will be a mass rethink from westerners about staying on here. I know of a multitude that have gone for much cheaper accomodation, to keep the same living standards on spending.

Western holiday makers will stay for less days here, many now instead of a month have now dropped down to 14 days.

I am aware that there are many ways of bringing orgetting money changed, why not help others by dropping the charges down for ATM visa transactions.

There are thousands who cannot just go home-- because of money tied up in house- business-car-condo. and some are getting desperate.

Easy to say people should have made better plans, but if you have been here a long time plans are not always easliy to deal with.

[Phronesis]

Good luck reigning in the foreign capital inflows...

Now that Thailand is off the money laundering black list...truckloads of new Russian and middle eastern cash will be arriving daily for laundering...

[Suffinator]

It'll certainly hit westerners that are on a pension. With nothing getting cheaper, only more expensive, and the baht getting stronger I know of 6 retirees that have already left for Phil.

With most walking out the door, exports being hit etc I wonder how much longer the Government will hold out before taking action - if they are capable of such a thing.

[ginjag]

It'll certainly hit westerners that are on a pension. With nothing getting cheaper, only more expensive, and the baht getting stronger I know of 6 retirees that have already left for Phil.

With most walking out the door, exports being hit etc I wonder how much longer the Government will hold out before taking action - if they are capable of such a thing.

Yeah -don't forget if you live here your U.K. pension is in a time warp until you return, I have a mate down country that get 88 pound a week, and had this ammount for 10 years, now you can understand many are struggling--when my friend returns to U.K. expected to get 110-120 pound PLUS all the benefits that go with it in U,K,... people here are SAVING the U.k. government money.---all to return it would cost the government a bomb to pay out.--

[Robby nz]

The Baht isn't appreciating it is still about the same against currencies that are not dropping like the OZ and NZ dollar.

It is only the drop in US, Jap and Euro currencies that make it look like it is going up..

That of course doesn't help those who are exporting to countries whose currencies have dropped or tourists and expats on fixed incomes from those countries.

[saorsa]

The Baht isn't appreciating it is still about the same against currencies that are not dropping like the OZ and NZ dollar.

It is only the drop in US, Jap and Euro currencies that make it look like it is going up..

That of course doesn't help those who are exporting to countries whose currencies have dropped or tourists and expats on fixed incomes from those countries.

Nonsense, go to oanda.com and have a look at how the Oz dollar has dropped against the baht since January

[Locationthailand]

What would Thailand expect when the major currencies such as Euro and USD are printing paper to pay debts?

[rubl]

So, what are the latest figures on export of that wonderful commodity, Thai rice that is?

[Peterphuket]

Went to the ATM today the 150 charge has increased to 180 baht

You have to do as I do, go to a ATM from AEON, you don't pay any fee!

[soi41]

So, what are the latest figures on export of that wonderful commodity, Thai rice that is?

Has to remain a secret. A matter of national security !!

[Thai at Heart]

Inflation in Thailand is apparently 5 %, wages are up. Did any of these exporters try to increase their prices to their buyers.

Or are the products so crap they have no pricing power at all?

[Rosco911]

If this trend continues there will be a mass rethink from westerners about staying on here. I know of a multitude that have gone for much cheaper accomodation, to keep the same living standards on spending.

Western holiday makers will stay for less days here, many now instead of a month have now dropped down to 14 days.

I am aware that there are many ways of bringing orgetting money changed, why not help others by dropping the charges down for ATM visa transactions.

There are thousands who cannot just go home-- because of money tied up in house- business-car-condo. and some are getting desperate.

Easy to say people should have made better plans, but if you have been here a long time plans are not always easliy to deal with.

Agree and its not just just the people that live here. We are looking at moving our company out of Thailand. Enough is enough no matter how much we like it here.

[ripstanley]

The Baht isn't appreciating it is still about the same against currencies that are not dropping like the OZ and NZ dollar.

It is only the drop in US, Jap and Euro currencies that make it look like it is going up..

That of course doesn't help those who are exporting to countries whose currencies have dropped or tourists and expats on fixed incomes from those countries.

I can assure you that the the Thai baht is appreciating. AUS was getting 31.92 in December and is now 29.15

[ripstanley]

How many expats with retirement extensions using income as a means of of obtaining this extension are now a little worried?

[IsaanUSA]

In other new, importers are making record profits. It seems like they only publish negative stories and don't bother reporting the positive stories.

[ripstanley]

In other new, importers are making record profits. It seems like they only publish negative stories and don't bother reporting the positive stories.

I thought Thailand was an predominately an exporting country.

[Loptr]

Inflation in Thailand is apparently 5 %, wages are up. Did any of these exporters try to increase their prices to their buyers.

Or are the products so crap they have no pricing power at all?

Rice is a commodity. When neighboring countries are able to charge less to customers due to the strength of the baht, it puts Thailand at a disadvantage. Has nothing to do with the product, it's all supply, demand, and exchange rates.

[Loptr]

In other new, importers are making record profits. It seems like they only publish negative stories and don't bother reporting the positive stories.

I thought Thailand was an predominately an exporting country.

That's the double-edged sword. Imports are cheap due to the strength of the baht against currencies of trading partners. On the other hand, it that same strength that hurt exporters. Since Thailand is a net exporter, the strength of the baht will drive up the cost of exports. If the cost goes to high, Thailand loses business due to the higher cost of goods compared to other supplying nations. That is what the article is all about...

Edited April 23, 2013 by Loptr

[lemoncake]

Manufacturing is not the only sector that is affected, look at tourism, despite what TAT like to publish, Pattaya is almost desserted.

Hotels empty, shopping malls empty, bars almost empty.

The Chinese, Korean and Russian groups, do not spend the money but are taken around to certain places and all the money goes back to respective home countries.

[khaowong1]

Inflation in Thailand is apparently 5 %, wages are up. Did any of these exporters try to increase their prices to their buyers.

Or are the products so crap they have no pricing power at all?

I would pick number 2 please.

[market trader]

The Baht isn't appreciating it is still about the same against currencies that are not dropping like the OZ and NZ dollar.

It is only the drop in US, Jap and Euro currencies that make it look like it is going up..

That of course doesn't help those who are exporting to countries whose currencies have dropped or tourists and expats on fixed incomes from those countries.

Have some respect. The 2nd world war ended 70 years ago. Its Japanese currency.. Do you still call Germans krauts?

[market trader]

Inflation in Thailand is apparently 5 %, wages are up. Did any of these exporters try to increase their prices to their buyers.

Or are the products so crap they have no pricing power at all?

No the products are not crap. But they have no pricing power. Viet Nam population 84 million and a factory wage less than Thailand will happily supply foreign companies if Thailand cannot compete.

[TallGuyJohninBKK]

That's the double-edged sword. Imports are cheap due to the strength of the baht against currencies of trading partners.

That's funny.... I haven't seen any decline in baht prices for the imported goods I buy at the local stores regularly, even though the baht has been rising significantly against the U.S. dollar where a lot of those imported products are being sourced from.

[Thai at Heart]

Inflation in Thailand is apparently 5 %, wages are up. Did any of these exporters try to increase their prices to their buyers.

Or are the products so crap they have no pricing power at all?

Rice is a commodity. When neighboring countries are able to charge less to customers due to the strength of the baht, it puts Thailand at a disadvantage. Has nothing to do with the product, it's all supply, demand, and exchange rates.

I somehow think Thailand has a slightly more varied export mix than just rice.

[IsaanUSA]

That's the double-edged sword. Imports are cheap due to the strength of the baht against currencies of trading partners.

That's funny.... I haven't seen any decline in baht prices for the imported goods I buy at the local stores regularly, even though the baht has been rising significantly against the U.S. dollar where a lot of those imported products are being sourced from.

Exactly. Importers should be making bank right now

[Eesat]

It'll certainly hit westerners that are on a pension. With nothing getting cheaper, only more expensive, and the baht getting stronger I know of 6 retirees that have already left for Phil.

With most walking out the door, exports being hit etc I wonder how much longer the Government will hold out before taking action - if they are capable of such a thing.

Of course they are capable,a drop of 50-100 basis points in the overnight interest rate would stop the carry trade,whereby banks borrow money from countries with low interest rates to park it in countries with higher interest rates.Capital inflows staunched,simple!

[Eesat]

That's the double-edged sword. Imports are cheap due to the strength of the baht against currencies of trading partners.

That's funny.... I haven't seen any decline in baht prices for the imported goods I buy at the local stores regularly, even though the baht has been rising significantly against the U.S. dollar where a lot of those imported products are being sourced from.

You're expecting the Thais to pass on the savings?

[charmonman]

The Baht isn't appreciating it is still about the same against currencies that are not dropping like the OZ and NZ dollar.

It is only the drop in US, Jap and Euro currencies that make it look like it is going up..

That of course doesn't help those who are exporting to countries whose currencies have dropped or tourists and expats on fixed incomes from those countries.

OK then, the Thai Baht is only appreciating against the currencies of three out of the four largest economies in the world! Oh sorry, my mistake, its appreciated against the currency of China too, so its four out of four!