Thai Baht

[Vegemite]

Just wondering if there are any thoughts on the future of the Baht.

[Pink Mist]

no

[cclub75]

Just wondering if there are any thoughts on the future of the Baht.

I've got one prediction, but it's a trash one...

The growth this year will be cut, for the fourth year in a row...

2003 : +6.9

2004 : +6.1 %

2005 : +4.5 %

2006 : probably 3.5 %

Not because of "political instability" but mainly because Thaksinomics show their limits. It's the end of the road. It's "check bin time".

But overall, with the political situation, i agree, it will be of course a factor. A bad one.

It's likely that this year we will have a hike in oil price. We already have high inflation. The BOT will continue to raise its rates.

So poor growth + high prices of oil + inflation + high interest rates = economic meltdown = crash of THB.

[Vegemite]

no

Do you have any thoughts at all>??????????

No??

[Gary A]

If you look at the charts you will see that this is the third year in a row that the baht has gone below 39 to a dollar during the first four months of the year. The year to year charts look almost the same month to month. If this is a yearly thing the baht will be back to 40/41 within the next two months. (I hope).

[britmaveric]

If you look at the charts you will see that this is the third year in a row that the baht has gone below 39 to a dollar during the first four months of the year. The year to year charts look almost the same month to month. If this is a yearly thing the baht will be back to 40/41 within the next two months. (I hope).

High season Bht gets strong and then gets weak when low season begins. I wonder why???

[boppia]

Like I posted in another place. There seems to be a lot of empty billboards around BKK. Does that say anything? Thaksin selling his shares now might mean something. Why would he want to sell them when they are low? Of course he wants to sell them before he gets out of office to as in while he is in office he has influence on things. Who knows?

[libya 115]

If you live in Thailand, what does it matter? If the US dollar is 38/39 and then strenghthens to 44/45 what is the big deal? Unless you are very heavy in Thai Baht and you should not be because over the long term you lose with holding cash as an asset.

The average Joe on holiday won't notice Thailand suddenly much cheaper if he gets a few thousand extra baht in his pocket.

For those on pensions from abroad, praying for a 45 to the dollar, it is foolish. fuel and utilities will rise in price.

The best way to stay rich in this world is to invest wisely (not in currency) and spend carefully.

Anyway, I reckon the baht might well hit 35 by year end; but that is because I expect more US dollar weakness, the U.S.A. might well suffer a meltdown financially; a big crash. So think Swiss Francs and Gold.

[george]

44 or 45 would be realistic within the end of this year. I count on that.

[britmaveric]

44 or 45 would be realistic within the end of this year. I count on that.

Observing the trends, historically you wouldn't be far off George!

[Miaow]

Just wondering if there are any thoughts on the future of the Baht.

Check it out @ here: http://www.ratesfx.com/predictions/pred-thb.html

[opothai]

i see the debt of the usa, forcing the treasury to print more dollars, then the dollar devalued [short term ] the thai baht remaining stronger than the dollar [ short term ].

the underlying problems in thailand are much worse than the usa, therefor the dollar strengthening later in the year.

if the stock markets start a major correction in the next 2 weeks [ of which i think it is imminent ]

then you can see the dollar wekness come into effect shortly.

this is only my take on the situation, and the same will go for the uk currency verses the baht, but not as low as the dollar may go.

in short hold 50/50 currency then you cannot lose, but if you want to speculate with the currencies

personally the risks are to high.

[cclub75]

If you live in Thailand, what does it matter? If the US dollar is 38/39 and then strenghthens to 44/45 what is the big deal?

Well, it's just a little 10 % difference !

On one million dollar, it pays the cigarettes or the mekong whisky. No ?

[libya 115]

If you live in Thailand, what does it matter? If the US dollar is 38/39 and then strenghthens to 44/45 what is the big deal?

Well, it's just a little 10 % difference !

On one million dollar, it pays the cigarettes or the mekong whisky. No ?

Actually...........No...unless you hold one million dollars equivalent in Thai Baht..bet you don't!

So if one dollar bought me 45 instead of 38 would I be much richer? For a short time maybe, that Mekong and those 20 tabs, might stay the same price for a bit, but not for long.

Since the Thai baht floated in 1997 only a few people thought they had 'Won'; they got houses built cheaply; guess what? They have fallen to bits in 9 years. Now the gold shops are void of customers, why?

Currency speculation is heart-breaking, rather like a first-time-Pattaya British tourist who meets a friendly bar-girl and thinks he is on to a good thing, and gets married and manages a bar. (For 18 months).

Sometimes, I see people getting their pension month by month, and they are chuffed when they see 500 English quid has yielded an extra few thousand baht. That is sad.

There are economist blokes (and ladies) out there who understand this stuff and can sum up, yet any further comments would be superfluous. But enjoyable.

[TRIPxCORE]

The best way to stay rich in this world is to invest wisely (not in currency) and spend carefully.

Ummmmmm, I beg to differ.

You know what they say about opinions. Mine does not agree with yours.

[TRIPxCORE]

The best way to stay rich in this world is to invest wisely (not in currency) and spend carefully.

Ummmmmm, I beg to differ.

You know what they say about opinions. Mine does not agree with yours.

[boppia]

I remember that the Thai baht was very low until the 1997 crisis. It was 20 -25 I think since the 80s. Is there any possiblity that it could go down to 30 again?

40/$1 for $100,000 = 4,000,000

500,000

35/1 " " = 3,500,000

1,000,000

30/1 " " = 3,000,000

1,500,000

25/1 " " = 2,500,000

You can lose quite a bit of cash with changes. Plus there are exchange charges.

[Losangels]

My prediction based upon current political situation, interest rates, economic growth:-short-term USD/Bath 1:39 to 40.50, medium-term 1:39.45 to 41.90, and long-term( 1 yr. and longer) 1:41.75 to 42.95. I'm going long in US dollars and shorting the Baht.

[sweetbix]

Hi everyone, Got 2 questions. Do you think the New Zealand dollar is going to continue to go down against the Thai baht and if so for how long?.

I have a Kasikorn Visa electron Card and want to know if I can use it to pay on the internet. Anybody else done that. Have tried to open a paypal account but won't accept it. Has anybody done that with their Kasikorn Visa electron or paid for anything over the internet with it. Any ideas as to which bank account to open (what branch) to get a visa electron card that can be used on the internet?. Cool thanks, any reply would be great

[mark45y]

My prediction based upon current political situation, interest rates, economic growth:-short-term USD/Bath 1:39 to 40.50, medium-term 1:39.45 to 41.90, and long-term( 1 yr. and longer) 1:41.75 to 42.95. I'm going long in US dollars and shorting the Baht.

Lets say I want to hedge $100,000.00 US dollars and lock in a rate of 40 Bht to the dollar and I want to do this every 6 months. The purpose being that I want to make sure my dollars stay worth at least 40 Bht. So, I go long on Bht in a currency contract or short in dollars. How much would this cost me?

[cclub75]

It seems that you have a strange understanding of percentages.

And your haughtiness is baffling.

Many western people who live in Thailand have assets/investments in their own country : USA, Europe etc.

And it's good for them.

So the question of exchange rate is not superfluous, as you seem to believe.

And furthermore, your vision of inflation is very narrow and you're wrong by thinking that inflation is automatically linked to currency apreciation/depreciation for a specific pair of currencies.

You speak about 97, do you think that rent for appartement/house in BKK have increased of 100 %, to offset the depreciation of the THB, if you compare before and after the crisis ?

Obviously, you are right to not comment further on those kind of issues : it would be definitly frivolous. And pointless.

Actually...........No...unless you hold one million dollars equivalent in Thai Baht..bet you don't!

So if one dollar bought me 45 instead of 38 would I be much richer? For a short time maybe, that Mekong and those 20 tabs, might stay the same price for a bit, but not for long.

Since the Thai baht floated in 1997 only a few people thought they had 'Won'; they got houses built cheaply; guess what? They have fallen to bits in 9 years. Now the gold shops are void of customers, why?

Currency speculation is heart-breaking, rather like a first-time-Pattaya British tourist who meets a friendly bar-girl and thinks he is on to a good thing, and gets married and manages a bar. (For 18 months).

Sometimes, I see people getting their pension month by month, and they are chuffed when they see 500 English quid has yielded an extra few thousand baht. That is sad.

There are economist blokes (and ladies) out there who understand this stuff and can sum up, yet any further comments would be superfluous. But enjoyable.

[opothai]

My prediction based upon current political situation, interest rates, economic growth:-short-term USD/Bath 1:39 to 40.50, medium-term 1:39.45 to 41.90, and long-term( 1 yr. and longer) 1:41.75 to 42.95. I'm going long in US dollars and shorting the Baht.

short term take off .5 to 1 dollar

i think long term you can add .5 to 1 dollar more

[ sorry i'm the eternal optimist ]

wish you luck all the same

Edited March 24, 2006 by opothai

[Gary A]

I have no choice but to be long on the dollar. My money in the US is in retirement funds. To take out too much in a single year would put me in a taxable income level. Obviously I don't want to pay taxes that I can avoid by leaving the money where it is. Currency speculating is simply legalized gambling. When I first came to Thailand in 1991 the baht was 25 to a dollar and stayed there until the crash in late 1996. The SET was over 2000 then. Since I was being paid in baht it really had no affect on my lifestyle here. BUT, looking at what I could make in the US versus here, I decided to go back and work there for a few years. I worked in the US for a total of five years between 1991 and now. I lived VERY frugally and managed to save quite a bit of money. Now I am back here to stay.

The point being is that we have no idea what inflation or currency rates are going to do. At this point Thailand is sitting on a powder keg and hopefully no one will light the fuse. If this government problem explodes what will happen to the baht? I expect it would once more go into free fall. As far as my personal finances, I planned around a 25 to a dollar exchange rate so I am still in a healthy surplus situation. I try not to be a gloom and doom type but you have to be aware of what is happening on our small globe and try to be conservative. A young man may be able to take some chances because he can work and make it up. It's only money. My working days are finished and what little I have is all I will ever have. I guard my nest egg carefully.

[Losangels]

My prediction based upon current political situation, interest rates, economic growth:-short-term USD/Bath 1:39 to 40.50, medium-term 1:39.45 to 41.90, and long-term( 1 yr. and longer) 1:41.75 to 42.95. I'm going long in US dollars and shorting the Baht.

Lets say I want to hedge $100,000.00 US dollars and lock in a rate of 40 Bht to the dollar and I want to do this every 6 months. The purpose being that I want to make sure my dollars stay worth at least 40 Bht. So, I go long on Bht in a currency contract or short in dollars. How much would this cost me?

Unfortunately we(as individual vs juristic entity) cannot legally trade foreign future contracts here in Thailand. My guess is the cost will vary as well as the risks if you want to trade unoffically.

I'm not sure if you can do it off-shore in the Sigapore market however the liquidity of the Baht there may be limited.

[ChiefBEM]

The USD to Baht exchange rate remained at

1 USD = 22.00 B - 25.00 B

from the mid 1960s up until around 1997.

As many posters have already pointed out, the factors that influence monetary exchange rates are a list of conditions in the two countries that are exchanging their currency. The list includes their current and projected economic conditions (things like: unemployment rate, debt ratios, trade deficits, individual and corporate savings vs spending ratios, new housing starts, corporate profits, new business starts vs business closures, GNP, and etc.) and political stability along with numerous other factors.

Therefore, for those that do not understanding anything that I have said so far in this posting, my guess is:

"The USD will experience increased strength by the end of 2006 which when coupled with the decline in value of the Thai Baht will result in an exchange rate of 1 USD = 46.295 Thai Baht."

[ray23]

It seems in a way a catch 22 for those of us who live and have assests in Thailand, bad things happening to the economy isn't a really a good thing. On the other hand I have a retirement that goes into my American Bank Account until I die. I hoping for a long term return, but I do enjoy riding motorcyces

At this juncture my only plan is to watch the baht when it's like it is now or worse, I just bring over my required cash. When it goes up I bring over more.

Inflation does effect us all in one way or another, what I pay for fuel each day is much hihger then what I paid for it three years ago. Other things are more expensive as well, many thing are currently being held down by government price controls. Eventually if people can not make a profit they will stop producing the items. The will opt for items that will give them the mopney for the that tank of gas. So government price control will work for a short period off time but not in th long run, without bing proped up by the government.

You want to be very rich move to Lao's a lot more kip to the dollar, but I remember paying 78K for a dinner for two as well.

My hope would be for both countries to stay helthy, not likely though.

[Korat Correct]

I have money in pounds/sterling,and need to transfer it. Currency rates are of concern. Its expensive transferring from one currency to another but..

see my entry in "state of emergency" in the "Issan" forum section. I don't know how to transfer it other than rewriting it.

Its about the state of the petrodollar,the euro and what other Asian countries are doing.

I note that in reducing their dependency on the dollar that China has now amassed 600 tons of gold bullion.

When things get hairy people do run for Gold and look at theprice increase in the last year.

Edited March 26, 2006 by Korat Correct

[ngeean]

If you live in Thailand, what does it matter? If the US dollar is 38/39 and then strengthens to 44/45 what is the big deal? Unless you are very heavy in Thai Baht and you should not be because over the long term you lose with holding cash as an asset.

The average Joe on holiday won't notice Thailand suddenly much cheaper if he gets a few thousand extra baht in his pocket.

For those on pensions from abroad, praying for a 45 to the dollar, it is foolish. fuel and utilities will rise in price.

The best way to stay rich in this world is to invest wisely (not in currency) and spend carefully.

Anyway, I reckon the baht might well hit 35 by year end; but that is because I expect more US dollar weakness, the U.S.A. might well suffer a meltdown financially; a big crash. So think Swiss Francs and Gold.

You're a wise man and the only one from this blog to hit the mark. I am a former diplomatic mission employee and, until recently, a resident of the Kingdom for 9 years. My wife (Thai) and I have been looking for land near her home in Chiang Mai and I am losing buying power on a daily basis due to Baht strength.

In 97 the expectation was that the Baht will eventually stabilize at 36 to the US dollar. I cannot see the Baht keeping this pace of strengthening for much longer without Thai Gov intervention.

What are your thoughts on future trend over FY07?

[wasabi]

If you live in Thailand, what does it matter? If the US dollar is 38/39 and then strengthens to 44/45 what is the big deal? Unless you are very heavy in Thai Baht and you should not be because over the long term you lose with holding cash as an asset.

The average Joe on holiday won't notice Thailand suddenly much cheaper if he gets a few thousand extra baht in his pocket.

For those on pensions from abroad, praying for a 45 to the dollar, it is foolish. fuel and utilities will rise in price.

The best way to stay rich in this world is to invest wisely (not in currency) and spend carefully.

Anyway, I reckon the baht might well hit 35 by year end; but that is because I expect more US dollar weakness, the U.S.A. might well suffer a meltdown financially; a big crash. So think Swiss Francs and Gold.

You're a wise man and the only one from this blog to hit the mark. I am a former diplomatic mission employee and, until recently, a resident of the Kingdom for 9 years. My wife (Thai) and I have been looking for land near her home in Chiang Mai and I am losing buying power on a daily basis due to Baht strength.

In 97 the expectation was that the Baht will eventually stabilize at 36 to the US dollar. I cannot see the Baht keeping this pace of strengthening for much longer without Thai Gov intervention.

What are your thoughts on future trend over FY07?

While I agree one should invest their disposable income the problem is many have that invested in US denominated assets or have future earnings/income which are in USD and they are powerless to change that short of moving overseas. The 20% drop Year to date in USD:BHT means you now must spend 20% more than you did last year, while it's not enough to stop me from going to Thailand I do consider it a big deal. When you are thinking about buying Thai real estate or some kind of budget planning those differences quickly add up.

As far as the USD rising to old highs, why should it? The fundamentals have worsened. Larger trade deficit, housing slump and a general change in sentiment towards the USA. I don't see it sliding much lower nor do I pretend to see years into the future but I don't see it going right back to old highs anytime soon. There are sideways trends where movements aren't meaningful and strong trends which are. Right now the USD is in a strong downtrend and no matter what article you read in The Economist or WSJ speculating as to why is like reading tea leaves, you can see what you want to see. The trend and economic forces creating it have spoken, and it says the USD is overvalued. Down trends like this don't just turn on a dime. I don't know the exact problem but I know we have some big problems but it hasn't gotten bad enough yet for most to take notice and take action. By the time it is the worst will be over. I'm fairly unhappy about this but don't see what option I have to fix it.

[Gary A]

I am a very conservative person. Years ago when I planned for my retirement in Thailand, I originally planned on a 25 baht to the dollar exchange rate. When the Thai economy collapsed, I had no reason to doubt that the baht would eventually gain back strength. HOWEVER, I got used to 40 baht to a dollar and even though it isn't a big surprise, it still is an unpleasant feeling to lose that much purchasing power. If the baht stabilizes at 35 to a dollar, I am still comfortable but do feel the loss. It now appears that we had better get used to 35 baht to a dollar and it would be best to prepare for an even stronger baht.

The only bright side is that I did buy my condo with strong dollars.