Thai Banks Cheating Again This Weekend

[topfield]

Friday evening the pound (and euro) rose in New York by a full one percent against the baht.

The Thai banks always issue new rates on a Saturday morning if the baht has risen.

As the baht has fallen Bangkok Bank, Siam Commercial Bank & Krung Thai Bank all "forgot' to issue revised rates !

From Friday and over the whole weekend these 'banks'are grabbing an extra one percent profit for themselves from needy tourists and expats..

Only one bank had altered the rates to reflect the true rate of exchange and was giving the extra one percent to customers namely the Bank of Ayudhya.

NOTE TO ALL THAIVISA READERS : Before changing cash or travellers cheques over a weekend check the true exchange rate with Bloomberg.com

If poor, change at Bank of Ayudya or wait until Monday

[backflip]

Thanks for the info, Topper. Obviously you've discovered the latest Thai conspiracy to cheat us farangs. Good for you.

[Meerkat]

Topfield, you seem to have a fundamental misunderstanding of how FX markets operate. There is no "official" exchange rate in FX and a company is under no obligation to set any given rate. It is totally demand/supply driven as to how a bank wants to set its rates. If BKK Bank wants to only offer 20 THB per USD then it can do so; obviously it wouldn't get much business though. Banks are there to make profits for their owners ie the shareholders. It's exactly the same situation with interest rates. The overnight interbank rate for THB is 4.75%, but do you get that on your at-sight (ie overnight) bank account? No, of course not.

In the interbank market, trades are being done simultaneously at different rates too. You reckon it should be any different for the retail market? Of course not.

You make it sound like the banks are being "unfair" by setting the price of their goods as they see fit. They're not - get over it.

[The Dan Sai Kid]

Friday evening the pound (and euro) rose in New York by a full one percent against the baht.

The Thai banks always issue new rates on a Saturday morning if the baht has risen.

As the baht has fallen Bangkok Bank, Siam Commercial Bank & Krung Thai Bank all "forgot' to issue revised rates !

From Friday and over the whole weekend these 'banks'are grabbing an extra one percent profit for themselves from needy tourists and expats..

Only one bank had altered the rates to reflect the true rate of exchange and was giving the extra one percent to customers namely the Bank of Ayudhya.

NOTE TO ALL THAIVISA READERS : Before changing cash or travellers cheques over a weekend check the true exchange rate with Bloomberg.com

If poor, change at Bank of Ayudya or wait until Monday

I don't think that self-serving banks are strictly limited to LOS. I'm from Scotland and the banks there have no qualms squeezing every last penny from customers.

[topfield]

Topfield, you seem to have a fundamental misunderstanding of how FX markets operate. There is no "official" exchange rate in FX and a company is under no obligation to set any given rate. It is totally demand/supply driven as to how a bank wants to set its rates. If BKK Bank wants to only offer 20 THB per USD then it can do so; obviously it wouldn't get much business though. Banks are there to make profits for their owners ie the shareholders. It's exactly the same situation with interest rates. The overnight interbank rate for THB is 4.75%, but do you get that on your at-sight (ie overnight) bank account? No, of course not.

In the interbank market, trades are being done simultaneously at different rates too. You reckon it should be any different for the retail market? Of course not.

You make it sound like the banks are being "unfair" by setting the price of their goods as they see fit. They're not - get over it.

You dear friend have a fundamental lack of knowledge on the practical use of cash and tc's fx in Bangok this weekend.... to which this posting relates..it is not , I repeat not a general statement on FX which you refer to and are right about , hence the reason we are at cross purposes.

The rate of exchange is that at which you can buy/sell large quantities on the market. That rate is followed in Thailand closely by ALL change offices and banks. This weekend is an exception.

GO TO THE WEBSITES OF THE BANKS ABOVE AND SEE THEIR RATES and you will see that my posting is 100 percent correct namely that the Thai banks other than one listed above.are not updating their rates. Do you prefer thaivisa readers are left in the dark and not be informed on the FACTS ?

[Meerkat]

You still maintain that there is a "correct" rate which the banks conveniently ignore. I say tosh, there isn't. The idea that a bank is being unfair by not updating their rates online or otherwise is nonsense; as I already stated, it is up to the banks what rates they offer.

The rate which for instance you find on Bloomberg is not some gospel rate. It is a spread around a mid derived from the average of the bid/offer spreads of various brokers and banks in the interbank market. Trust me on this one - I've been doing it for over 15 years and the company I work for is one of the ones that provide that data for Bloomberg

Next, and arguably most important even if you continue to insist on believeing that there is a "fair" rate, is the concept of "spot". The prices for THB/USD on Bloomberg (ie the price at which the banks themselves deal), or any other currency pair are value "spot" - this means two valid business days following the execution of the deal. For THB/USD, that means that that if for instance SCB bought USD50m worth of THB from Citibank on Friday, neither counterparty actually receives the respective funds until Tuesday; inspite of Saturday being a valid business day in THB, it isn't in USD. That's just the way the market works I'm afraid.

So, you want to pop down to your bank to exchange cash for delivery now, or tell them you're happy to wait until spot before you get your money, same as they have to?

[topfield]

Dear Meerkat,

I am sure you understand the forex market well and what you say is correct !

My posting concerned ONLY :

1. THIS WEEKEND

2 CHANGING CASH AND TRAVELLERS CHEQUES

3. THAI BANKS IN BKK WITH CHANGE OFFICES OPEN SAT AND SUN

4. LIMITED AMOUNTS

5. EUROS & POUNDS TO BAHT

6. EXCLUDES DON MUANG AIRPORT

On the above basis, what is written is 100 percent correct and the advice if followed would have saved any thaivisa reader a full one percent on the amount he exchanged or put the other way round, the thaivisa reader would have lost approx 1 percent on the pounds or euros he exchanged at a bank which had not revised its rates Saturday morning.

Yes Dear Meerkat...you are correct !! Sometimes Bloomberg .com has an incorrect rate. [..once a week ?] and also it uses a mid rate so quote is never totally accurate.

To be 99.99 percent accurate use the following rates which you can actually trade.

http://www.fxstreet.com/nou/graph/liverealtimequotes.asp

[Thaipwriter]

Dear Topfield, your like a brok.....click................ your like a brok....click................ your like a brok.....click

[peterjackson]

Hey

I know this is a little off topic, but nevertheless, in the general area.

Many years ago (15) I used to travel to Thailand a considerable amount and always brough USD to exchange into BAHT on the 'black/grey' market and always received a better rate than using TC's.

Fast Forwards to 2006, what is the best way to get a good exchange rate.

1) Transfer USD into a Thai Bank Account

2) Use USD TC's and exchange them at a bank/other outlet ?

3) Use USD physical currency and exchange it bank/other outlet ?

4) Use a US Bank Issued ATM card to withdraw Cash. What charges to the Thai ATM's make for this service ?

Any info. would be greatly appreciated.

Regards

Peter

[Totster]

Topfield.. your bloody obsessed...

Careful.. you may give yourself a heart attack with all this extra stress you give yourself...

totster

[Totster]

oops.. duplicate post

Edited June 4, 2006 by Totster

[topfield]

Dear Topfield, your like a brok.....click................ your like a brok....click................ your like a brok.....click

Thanks so much Thaipwriter It's always nice to have bright people like yourself add to the discussion and bring up fresh ideas Hope we will have the benefit of many more of your postings.

[topfield]

Topfield.. your bloody obsessed...

Careful.. you may give yourself a heart attack with all this extra stress you give yourself...

totster

Dear Friend Totster ....say no more , personal comments are uncalled for on this site/ thread concerned with foreign exchange and say everything we need to know about you.

[Totster]

Topfield.. your bloody obsessed...

Careful.. you may give yourself a heart attack with all this extra stress you give yourself...

totster

Dear Friend Totster ....say no more , personal comments are uncalled for on this site/ thread concerned with foreign exchange and say everything we need to know about you.

No need for you to take my comment so personally... I was just pointing out that IMHO you seem to be obsessed with this topic... stress for no apparent reason.

totster

[topfield]

OK friends..it is now 8.40 AM on Monday.

Go to the Bangkok Bank fx website and compare the weekend rate to this morning's.

BY TAKING MY ADVISE YOU WOULD HAVE SAVED YOURSELF 60 SATANG OR NEARLY A FULL ONE PERCENT.

A TENNER SAVED HAD YOU CHANGED A THOUSAND QUID THIS WEEKEND AT BANGKOK BANK.

[The Dan Sai Kid]

OK friends..it is now 8.40 AM on Monday.

Go to the Bangkok Bank fx website and compare the weekend rate to this morning's.

BY TAKING MY ADVISE YOU WOULD HAVE SAVED YOURSELF 60 SATANG OR NEARLY A FULL ONE PERCENT.

A TENNER SAVED HAD YOU CHANGED A THOUSAND QUID THIS WEEKEND AT BANGKOK BANK.

Pity I'm skint and can't change any quids

[Meerkat]

Ah, Topfield. The point I was trying to make was that the title of your thread was...er...100% wrong. Thai banks were not cheating as you surmise...

[Momenthai]

Putting to one side the 1% issue it seems to me that the tourist rates offered by Banks in Thailand are a lot more competitive than other countries I have changed money in (well Europe and HK in any case).

In England they have a large spread between buying and selling and then have the cheek to charge you 1.5% commision on top!!

[bendix]

This is outrageous.

Totally outrageous.

I'm appalled and shocked but thank topfield sincerely for revealing the latest attempt by these pesky thais to rip us god-fearing farang out of our last few pennies.

I think I might leave this god-forsaken place and go home.

Does anyone know a good FX place where i can go and sell these stupid baht and get some real money?

[Meerkat]

Putting to one side the 1% issue it seems to me that the tourist rates offered by Banks in Thailand are a lot more competitive than other countries I have changed money in (well Europe and HK in any case).

In England they have a large spread between buying and selling and then have the cheek to charge you 1.5% commision on top!!

Agreed - Travelex for instance shows such ridiculously wide spreads I'm surprised they do any business at all. But, as I pointed out to Topfield above, it's a free market.

HK offers great rates if you bank there. I remember a few years ago a friend from the UK was buying a house in Spain. It was cheaper for him to wire GBP to me in HK, me to switch GBP into ECU (pre EUR days) then ECU into ESP all through my multicurrency account at HSBC, then wire it to the vendor's bank in Spain, rather than him do a straight GBP/ESP switch and wire from his bank in the UK. He saved over GBP 10k!

What with money-laundering regulations being tightened up now, it would be harder to do (but still totally legit of course).

[topfield]

HI Meerkat,

Perhaps you have not been in Thailand long and perhaps you are not familiar with the relationship between Thai banks and the Thai government.

The position here is that Thai banks are strictly controlled by the BOT. The interest they charge and all their fx dealings unlike in the EU are strictly regulated. In addition they must be licenced and follow the rules and regulations . There is no free market here in fx . The Thai government is aware of the huge importance of the tourist industry. One facet thereof is the exchange of money that tourists bring to Thailand. The government decided a long time ago that tourists were to receive a fair and honest rate of exchange from the banks and the banks pledged they would follow this principle.

If you have any doubt ring the directors of the major banks, the finance ministry , the tourism ministry or the BOT.

Well this rule is followed and we generally get a good deal here as contrasted with previous postings indicating a different policy from uk banks that do operate a free market policy towards fx. I am old enough to remember a similar policy after the war. Until the 1970's in the UK banks were not permitted to charge a commission on the purchase of fx only the sale.

The UK was in desperate need of fx in those days

Well banks being banks and wanting to improve their bottom line , some have found a loophole enabling them to double and treble their margins on fx by the simple expedient of speeding up the updating of rates when the baht is rising and delaying or stopping updates when the rate is falling.

THIS POLICY IS NOT APPROVED BY THE BANK OF THAILAND who probably are unaware of what is going on. So yes they are cheating vis a vis the BOT breaking the rules under which they are licenced to operate and yes they are cheating vis a vis the tourists by concealing the fact that they are offering out of date rates. They are assisted in this by the BOT rules allowing purchase of fx but not the sale thereof as were deals permitted both ways the banks could not get away with such a policy easily as the spread would give the game away.

[samran]

It was getting a bit personal, so I've had to delete some flames.

However, I must warn the OP that as far as possible for him to use factual information. One of my pet hates on this site is people sprouting stuff that is not based on fact. And as someone who HAS been in Thailand for many years, and as someone who DOES know many many people at the various government agencies the OP cites (see previous post), including the guy who passed up the BOT governorship, many of the things you say simply just don't ring true.

Additionally, as anyone with even a modicum of common economic sense knows, Thailand has one of, if not the most, competitive levels of FX exchange rates available to travellers through the humble exchange booths.

Anyone with a brain knows that competitive prices are due to...wait for it....competition. A competitive environment means that cartel behavior does not survive. Margins are tight by any standards here.

Now while I and many here are happy to sit back and watch you slowly drive yourself bonkers over this, please please please make sure that you have your economic fundamentals straight.

[libya 115]

HI Meerkat,

Perhaps you have not been in Thailand long and perhaps you are not familiar with the relationship between Thai banks and the Thai government.

The position here is that Thai banks are strictly controlled by the BOT. The interest they charge and all their fx dealings unlike in the EU are strictly regulated. In addition they must be licenced and follow the rules and regulations . There is no free market here in fx . The Thai government is aware of the huge importance of the tourist industry. One facet thereof is the exchange of money that tourists bring to Thailand. The government decided a long time ago that tourists were to receive a fair and honest rate of exchange from the banks and the banks pledged they would follow this principle.

If you have any doubt ring the directors of the major banks, the finance ministry , the tourism ministry or the BOT.

Well this rule is followed and we generally get a good deal here as contrasted with previous postings indicating a different policy from uk banks that do operate a free market policy towards fx. I am old enough to remember a similar policy after the war. Until the 1970's in the UK banks were not permitted to charge a commission on the purchase of fx only the sale.

The UK was in desperate need of fx in those days

Well banks being banks and wanting to improve their bottom line , some have found a loophole enabling them to double and treble their margins on fx by the simple expedient of speeding up the updating of rates when the baht is rising and delaying or stopping updates when the rate is falling.

THIS POLICY IS NOT APPROVED BY THE BANK OF THAILAND who probably are unaware of what is going on. So yes they are cheating vis a vis the BOT breaking the rules under which they are licenced to operate and yes they are cheating vis a vis the tourists by concealing the fact that they are offering out of date rates. They are assisted in this by the BOT rules allowing purchase of fx but not the sale thereof as were deals permitted both ways the banks could not get away with such a policy easily as the spread would give the game away.

I agree Topfield: a total rip-off: If I had changed GBP 1000 I would have lost GBP 10 and that is 20% of a good night out in Pattaya.

Maybe you could look into this nasty rip-off: A bus from Pattaya North Bus Station-Bangkok Ekamai costs 113 baht; yet the reverse journey Ekamai-Pattaya costs 117 baht. I make that a total rip-off of 3.54%, so if you travelled the Pattaya-Ekamai route return, one hundred times you would lose a total of 800 Baht! That is just over another GBP 10 : another 20% of a night out in Pattaya.

No wonder I can't sleep at night!