Baht likely to fall to 36.75 baht per US dollar at year-end

[sandyf]

Thailand is living on a giant soap bubble. It is what I already said in 2010 !!!

Somebody has it wrong.

"Thailand's large current account surplus (equaling 5% of GDP this year) and sizeable foreign

reserves provide ample buffers to minimize the likelihood that such unexpected events could

undermine the resilience of the Thai economy,"

[maidee]

and the euro stays at the same low level...go figure out ...

is it because of first GREECE and now the thousands of muslims invading europe ?

[NeverSure]

One problem with making predictions is that if you're right, many people still can't see it. I was predicting a crash in the Thai stock and real estate markets before it happened but then people will just tell me to look back five years or three years and...

But when things are accelerating so fast that there is bound to be a major correction people tend to get euphoric about it. There is a major correction in the Thai real estate market in that things won't sell at what sellers ask but then Thais don't sell if they can't get their price. That's cultural. That doesn't mean that the values are still up or perhaps even that they ever were as far up as the asking prices. A sale once in a while that's an outlier doesn't make a market.

The value of the baht has dropped a ton in the past year as a percentage. I don't see Thailand doing the free market things that it would need to do to get allow the economy to take off. I see people talking as if they think the government makes an economy when in fact the government just sucks off the economy that the private sector provides.

I have money in Thailand but only enough for provisions for my next trip. If the baht keeps falling I'd have to bolster that amount just before I arrived or use my Visa and Mastercard more.

Cheers.

[spidermike007]

The general is single handedly making Malaysia and Vietnam look like very secure and stable places to invest. He is also making their governments look very good, by comparison. Congrats little P.

[slipperylobster]

Let's aim for 46 baht/$, shall we. I have my fingers crossed.

problem is....prices will go up too.

nature of the beast.

and what happens when the baht eventually goes back to 33?

Beware of greeks (or thais) bearing gifts... it will not be all perfume and roses.

Edited September 10, 2015 by slipperylobster

[Naam]

The general is single handedly making Malaysia and Vietnam look like very secure and stable places to invest. He is also making their governments look very good, by comparison. Congrats little P.

instead of presenting most irrelevant comments you should check Malaysia's currency Ringgit

which depreciated 23% vs. USD in one year and compare that with the Baht's weakening of 12% during the same period.

then take a look at Baht appreciation vs. Ringgit +21%!

case "secure and stable places" closed

[Stevemercer]

The above post by Naam is interesting. I'm happy for all you Americans, but for us Aussies the Baht has effectively appreciated 20% against the Aus dollar over the last 18 months. There are no signs of this trend changing. Setting aside the Baht's slide against the US dollar, I can't understand why it is still so high when compared with other Asian currencies. Surely this makes Thailand non-competitive against other ASEAN countries?

There must be political, and other factors, keeping the Baht artificially high. I suspect that the Chinese are big buyers of the Baht and they will continue to do so while it is in that countries interests to maintain a high Baht. I've no evidence for this, but there must be some factors keeping the currency artifically high.

[Naam]

The above post by Naam is interesting. I'm happy for all you Americans, but for us Aussies the Baht has effectively appreciated 20% against the Aus dollar over the last 18 months. There are no signs of this trend changing. Setting aside the Baht's slide against the US dollar, I can't understand why it is still so high when compared with other Asian currencies. Surely this makes Thailand non-competitive against other ASEAN countries?

There must be political, and other factors, keeping the Baht artificially high. I suspect that the Chinese are big buyers of the Baht and they will continue to do so while it is in that countries interests to maintain a high Baht. I've no evidence for this, but there must be some factors keeping the currency artifically high.

that's a misconception Steve. other Asian currencies have lost considerably vs. US-Dollar too though percentages differ. but take a look how closely parallel the rates for IDR, INR, THB, TWD, KRW, SGD vs. USD ran for the last 6 months:

[edwardflory]

It's been widely reported many currencies will weaken once the fed raises interest rates. A lot the "hot" money that flowed here during the QE programs will flow back. Nobody has a crystal ball, but with things the way they are now, I wouldn't be surprised to see the rate go to over 37.

Naam: where's your crystal ball??? LOL

"US FED RAISES INTEREST RATE"....when this hapens, IF IT HAPPENS _{under the present US administration} , I expect to see 40-42+Baht against the US Dollar.

On the other side of the coin....

There has been international talk about the US Dollar being trashed as the worlds "reserve currency ( has been since the end of WWII )". ...due to the QE programs of the FED ( 6+ times???), IF this happens, many economies would probably shut down

[Thai at Heart]

In reality, this is exactly what the thai economy needed anyway. Better this, than desperately trying to defend the value postponing the fall and causing mayhem in the longer run. Let it devalue with the market, and it will come back in a short while.

[Naam]

It's been widely reported many currencies will weaken once the fed raises interest rates. A lot the "hot" money that flowed here during the QE programs will flow back. Nobody has a crystal ball, but with things the way they are now, I wouldn't be surprised to see the rate go to over 37.

Naam: where's your crystal ball??? LOL

"US FED RAISES INTEREST RATE"....when this hapens, IF IT HAPPENS _{under the present US administration} , I expect to see 40-42+Baht against the US Dollar.

On the other side of the coin....

There has been international talk about the US Dollar being trashed as the worlds "reserve currency ( has been since the end of WWII )". ...due to the QE programs of the FED ( 6+ times???), IF this happens, many economies would probably shut down

there also has been international talk since decades that the world will end, that planet Earth is flat and the skies will fall.

[Shiver]

I don't know the detail, but was under the impression that Thailand was *intentionally* going to devalue the baht.

Fed doing rate rise, I don't know how they can. I think they'd like to, but the system is in such a state that I'm not sure it could accommodate it.

How would Thailand intentionally devalue the baht?

Very tough question. How about ... print more?

[waldroj]

I don't know the detail, but was under the impression that Thailand was *intentionally* going to devalue the baht.

Fed doing rate rise, I don't know how they can. I think they'd like to, but the system is in such a state that I'm not sure it could accommodate it.

How would Thailand intentionally devalue the baht?

Very tough question. How about ... print more?

[lostoday]

I don't know the detail, but was under the impression that Thailand was *intentionally* going to devalue the baht.

Fed doing rate rise, I don't know how they can. I think they'd like to, but the system is in such a state that I'm not sure it could accommodate it.

How would Thailand intentionally devalue the baht?

Very tough question. How about ... print more?

I don't think Thailand has increased the money supply of Thai baht. I've not heard of them doing so. I don't know the Thai rules and laws for regulating the money supply perhaps someone does.

[chiang mai]

You guys crack me up!

[BuaBS]

I don't know the detail, but was under the impression that Thailand was *intentionally* going to devalue the baht.

Fed doing rate rise, I don't know how they can. I think they'd like to, but the system is in such a state that I'm not sure it could accommodate it.

How would Thailand intentionally devalue the baht?

Very tough question. How about ... print more?

Lower interest rates (again ) , sell THB for other currencies , buy more gold and shout it out in the media > US will attack your currency.

[Jon Wetherall]

Sorry but no, that's not a viable answer.

You start off by taking a shot at how poorly some Thai banks have forecast recovery in the Thai economy, a sin not suffered by banks in other economies of course, ahem! And then you talk about the World Bank having a different answer, whatever that might be! Reminds me somewhat of Christine Laggard forecasting that the economy of UK Plc would hit the skids, only to offer a grovelling apology two months later.

But then to the probable crux of what you've written, the reason the Thai economy is in the doldrums is because of the coup and this has been proven by studies of the economies of other countries post coup. Oh really!

History has shown that "political agitation" has had no lasting impact whatsoever on the Thai economy, even when there were tanks in the streets and snipers shooting people in temples, the economy remained robust, and as a bi-product, so did the currency.

I'm afraid matey that you've missed it all by a wide margin here, but I understand that it's just so easy to blame the coup or indeed, bash Thailand. Had you said a combination of capital outflows resulting from the US rate picture and a slow down in the Chinese (and global) economy were to blame I could have agreed with you and given you a like, as it stands I I'm headed in the opposite direction.

What do you mean not a viable answer? Get a stable government to stop the economic slide. Doesn't take a brain trust to figure that one. History has shown An empirical analysis of the impact of coups on other national economies shows that growth slows, on average, by 2.1 percentage points in the year of a coup, 1.3 and 0.2 in the first and second year after the coup."

Thailand is not different (except in economic expertise) than any other country. I'm right. The numbers reflect I'm right and you are wrong.

Things haven't gone as hoped. Eight months later, capital is fleeing the country ($1.58 billion out of equities alone in the last 12 months). The economy is flirting with deflation and a possible recession; both consumer prices and the economy are growing at a meager 0.6 percent pace. Unless the government gets moving on long-postponed structural reforms, the economy could well slip into its own lost decade.

http://www.bloombergview.com/articles/2015-01-22/thailand-coup-leaders-need-to-revamp-economy-faster

We do not agree, I do not accept the quality of the government is the sole root cause as you posted earlier, not a chance. And your empirical analysis is nonsense from an unreliable source that quotes averages and is contrary to recent history in Thailand. A useful quote here says much:

"While Thailand's military-led government is clearly aware of the need to avoid scaring off foreign investment, it remains to be seen whether the junta will be any better than its elected predecessors at attracting it".

http://asia.nikkei.com/Politics-Economy/Economy/Junta-sends-clear-message-More-foreign-investment-a-must.

But I am pleased to see that you've amended your reasoning a little bit to include capital outflows, keep going, you're getting there, slowly.

Capital is not running away from Thailand because of the USA or any other foreign influence. It is running out of Thailand because of historical experience with similar situations in other countries the same as Thailand. BTW last response to you as you are being patronizing and impolite.

Not an expert but what you say seems likely. The government won't agree of course, but what they know is already on display.

[watcharacters]

Blablablablablabla..

The reality is that Thai economy is going down the drain. It is not because of the rise of the dollar.

Today I heard from suppliers that the reason that prices went up (exanple from 18 THB to 45 THB /pc) were due to the rise of the Chinese Dollar... Now we start to import supplies for ourselves and don't give a $#!t about our lying supplier.

Thailand is living on a giant soap bubble. It is what I already said in 2010 !!!

I predict a dollar rate of at least 39 THB on the dollar before this year ends... Prove me that I am wrong !!!

if your suppliers are telling you the price increase is because of the 18/45% rise in the Chinese Dollar you're a mug, China doesn't use a currency by that name and its actual currency hasn't increased in value by anything like that amount. http://www.tradingeconomics.com/china/currency

As for your soap bubble theory: You were wrong in 2010 and five years later you're wrong yet again, I'd give up if I were you.

To check back at the end of the year..

[lifeincnx]

Geesh, who writes this stuff?

. "He anticipated the baht to weaken to 36.75 baht per US dollar at the end of this year as it was speculated that the US Federal Reserves would increase the interst rate by 0.25 basis points during a meeting on September 16-17."

The Fed may raise rates by 25 basis points (0.25% percentage points), not 0.25 basis points. If 0.25 BP could negatively impact the baht there are far bigger problems.

[Naam]

Geesh, who writes this stuff?

. "He anticipated the baht to weaken to 36.75 baht per US dollar at the end of this year as it was speculated that the US Federal Reserves would increase the interst rate by 0.25 basis points during a meeting on September 16-17."

The Fed may raise rates by 25 basis points (0.25% percentage points), not 0.25 basis points. If 0.25 BP could negatively impact the baht there are far bigger problems.

the writer was referring to Thai basis points, a unique method for financial calculations which can only be carried out by experienced eggsburts.

reason: the difficulty to arrive at the correct multiplication factor which takes into consideration USDTHB exchange rate, delta t of max/min temperatures in Nakhon Nowhere and the square root of prevailing relative humidity.

[Robbie Dye]

I predict 40 to USD and 62 to GBP in time for Xmas!! Come on Santa!!

[Naam]

I predict 40 to USD and 62 to GBP in time for Xmas!! Come on Santa!!

but first "36" has to be conquered again because presently the TT rate is between 35.75 and 35.88

http://bankexchangerates.daytodaydata.net/default.aspx

[Skeptic7]

Certainly will not raise this month. Come back in a few weeks and admit you were wrong.

No problem admitting when wrong, but since you're the one making the positive claim...TV members following this thread will expect full admittance of your error if you prove to be incorrect. Looking forward to it...

You wrote, "Almost certainly will raise this month. 25 basis points, from nearly zero for years now, won't even be noticed and is long overdue." I only replied to your uneducated guess. Really like taking candy from a baby. Not much of a challenge. I'd me more than happy to come back and say I was wrong in the event that proves to be true.

WOW...really?

FYI...I know what I wrote...I WROTE IT! Silly of me to assume such undeserved credit, so I'll spell it out. When someone says or writes "almost certainly"...there has been no positive claim made, only an opinion given. Intentionally leaving some room for error. The word almost is the qualifier which sees to that. When someone (YOU) states, "certainly will not"...a definite positive claim of knowledge has been declared authoritatively. NO wiggle room...NO room for error. You have pronounced a claim with absolute certainty. I have only shared my opinion. Got it now?

You think they will raise the rate I think they will not. Simple isn't it? Got it now?

[IMA_FARANG]

Update:

Just on the news today (18 September 2015)

The Fed did not raise interest rate.....left it unchanged.

Still [possibility for October rate hike.

Unsure what this latest news will do

Dollar/baht rate back down below 36 to a Dollar.

Still early morning here in Thailand...... will have to see what , if anything, happens to rate today.

[lostoday]

Jury still out there. USA economy improving but not great. The employment gains really not up to expectation. There really no inflation at the moment and a strong dollar is bad for the exporters at time when other competing countries have a weak currency and global demand is still very soft. Doubt September and possibly kick the can to next year.

Almost certainly will raise this month. 25 basis points, from nearly zero for years now, won't even be noticed and is long overdue. Even if they raised it 50 basis points, which they won't...it would still be historically very low. A hike will bring some stability back to the markets and also prepare for further rate hikes next year. Then watch the baht crumble!

[chiang mai]

Blablablablablabla..

The reality is that Thai economy is going down the drain. It is not because of the rise of the dollar.

Today I heard from suppliers that the reason that prices went up (exanple from 18 THB to 45 THB /pc) were due to the rise of the Chinese Dollar... Now we start to import supplies for ourselves and don't give a $#!t about our lying supplier.

Thailand is living on a giant soap bubble. It is what I already said in 2010 !!!

I predict a dollar rate of at least 39 THB on the dollar before this year ends... Prove me that I am wrong !!!

if your suppliers are telling you the price increase is because of the 18/45% rise in the Chinese Dollar you're a mug, China doesn't use a currency by that name and its actual currency hasn't increased in value by anything like that amount. http://www.tradingeconomics.com/china/currency

As for your soap bubble theory: You were wrong in 2010 and five years later you're wrong yet again, I'd give up if I were you.

To check back at the end of the year..

No need really, the jury came in last night!

[waldroj]

Forum members,

See report from BBC

US central bank leaves interest rates unchanged - http://www.bbc.co.uk/news/business-34286230

And, ABC (Australia)

US stocks slide after Fed keeps rates on hold http://ab.co/1Ql4fhO #abcnews

[2fishin2]

From sliding to falling what is next [emoji3]

[Heng]

Sweet Jesus. Slide baby slide.

[Skeptic7]

Certainly will not raise this month. Come back in a few weeks and admit you were wrong.

No problem admitting when wrong, but since you're the one making the positive claim...TV members following this thread will expect full admittance of your error if you prove to be incorrect. Looking forward to it...

You wrote, "Almost certainly will raise this month. 25 basis points, from nearly zero for years now, won't even be noticed and is long overdue." I only replied to your uneducated guess. Really like taking candy from a baby. Not much of a challenge. I'd me more than happy to come back and say I was wrong in the event that proves to be true.

WOW...really?

FYI...I know what I wrote...I WROTE IT! Silly of me to assume such undeserved credit, so I'll spell it out. When someone says or writes "almost certainly"...there has been no positive claim made, only an opinion given. Intentionally leaving some room for error. The word almost is the qualifier which sees to that. When someone (YOU) states, "certainly will not"...a definite positive claim of knowledge has been declared authoritatively. NO wiggle room...NO room for error. You have pronounced a claim with absolute certainty. I have only shared my opinion. Got it now?

You think they will raise the rate I think they will not. Simple isn't it? Got it now?

Good call