The Baht At 6-year High Against The Us Dollar

[llothar]

The real problem with the strong Baht is that Thai goods will cost much more in the export market, making them less attractive, and other countries will not buy them. I am sure that the US is one of Thailands biggest trading partner. So if the Thai bankers were smart, they should be buying US Dollars to try to stabilize the dollar/baht rate. They did say once that 37 was much to strong and at that point they would intervene. So where are they ?????

Yes the export rates for rice already are very low compared to other years, but this is a problem of the poor (Isaan for example) not the problem of bankers.

But the money flow into thailand is still really strange, too much chinese and other asian countries are buying as crazy in thailand at the moment. I still believe all this is a bubble but we will all see. Still have 100000 Baht in my bank account from the day it was 51 against the Euro , this should be enough for the next 4 month i hope and then this peak is history.

[llothar]

from this side of the pond, we see the decline in tourism and influx of money from over here.

daily news warns tourists about the floods and fires and the unstablility in the region. How it can go up now is an indication of manipulation. Everyone is saying "what the heck, lets do tijuana"

This flux in the economy is another red flag for tourists over here. Just my opinion based on the local talk here in california.

From a european point of view: it's the Bush's, the Homeland Security, the transfer of my personal data when i enter an airplane that is going to your country, the overall mood in your country, Guantanamo Camp, and the fear that you can't make a joke about bombs at an airport anymore without going to the former.

You should care about this more then about flodding and fires.

[sanook mai?]

Why are they saying the baht is the 'strongest' in 6 years? I thought it took a dump. In my experience I never saw it go under 38.

[george]

Update:

Baht strengthens too quickly, says BOT

BANGKOK: -- The baht has strengthened too quickly in the past couple of days mainly because there was a short-term foreign capital inflow into the Stock Exchange of Thailand, according to the Bank of Thailand.

BOT’s newly-appointed Assistant Governor Suchada Kirakul said the baht appreciated and broke through a level of 37 to the US dollar in a morning trading session on Thursday. It strengthened to touch 36.98 to the dollar before weakening to stay at 37.22.

The sharp appreciation stemmed from a continued foreign capital inflow into the Thai bourse as could be witnessed by net buys of foreign investors and a rally in the SET index.

She conceded the strengthening of the baht for this moment was too quick and felt worried that most of the foreign capital flown into the stock market would be short-term funds for speculation.

She said the central bank was closely monitoring the foreign capital inflow at current.

Mrs. Suchada suggested it is a good opportunity for importers to buy the greenback and exports to hedge against currency exchange risks now that the baht has strengthened.

BOT’s Director Nonthapol Nimsombun said the central bank had kept a watch on the capital inflow since the baht had appreciated too quickly as a result of clarity on political situation and a continued increase in exports.

He said the Monetary Policy Committee projected the Thai economy this year would expand in a range of 4.5-4.6 per cent.

--TNA 2005-10-27

[autonomous_unit]

Why are they saying the baht is the 'strongest' in 6 years? I thought it took a dump. In my experience I never saw it go under 38.

The baht is stronger at 37 than at 38 per dollar. Stronger means you can buy more dollars with the same baht. As someone pointed out above, if you look at the reciprocal value of dollars per baht, then the number goes "up" when the baht is stronger and "down" when the baht is weaker. (1/37 of a dollar is more than 1/38 of a dollar.)

[Pattaya_Fox]

Nice to see the British Pound rising against the US Dollar and standing at over $1.89 this morning.

[jumbo]

Lets not forget that a weak dollar makes export usually better for the US which infuances the trade deficit in a positive way....just to make you yanks happy.....a bit...that's the main reason why the US doesnot interrupt the market

What is really funny is that despite a lower dollar adn teh US being the main trade partner export has continued to increase.......and that is why the Thai governement doesnot interrupt (yet)

J

[xbusman]

Sorry, but the export market is all but dead in Thailand. Its hard enough to compete with the Chinese at 41 baht/dollar but below 39 and I am watching my manufacturers close doors across the country. The Japanese are still in good shape with their in house producers. Lots of auto parts and such. Overall though there are some serious structural faultlines showing in this export economy.

The thing I dont get is that if there are massive capital inflows into the stock market, why is it only 25 points up for the year? The P/E ratios are still strong so there is neither long term fundamental investing nor short term speculation in the equities market. If that money is indeed coming in, where is it all going? No new major manufacturers are coming, in fact, we have lost the last few to Malaysia and Vietnam.

[jumbo]

Update:

Baht strengthens too quickly, says BOT

Mrs. Suchada suggested it is a good opportunity for importers to buy the greenback and exports to hedge against currency exchange risks now that the baht has strengthened.

--TNA 2005-10-27

Funny remark, as an exporter one ususally hedges when the dollar is expected to become even more weak (or the thb stronger)

Does she expect the thb to become even more stronger?????SO why talk about intervention

And what happens if the BOT does, the Chinese are sitting on 1 trillion!!! dollars.......If they want they can blow any intervention our of the water....

J

[LoveDaBlues]

Highest in 6 years? Is this correct? I thought it was over 40 just a year or two ago?

Why are they saying the baht is the 'strongest' in 6 years? I thought it took a dump. In my experience I never saw it go under 38.

They walk among us.

[jumbo]

Sorry, but the export market is all but dead in Thailand. Its hard enough to compete with the Chinese at 41 baht/dollar but below 39 and I am watching my manufacturers close doors across the country. The Japanese are still in good shape with their in house producers. Lots of auto parts and such. Overall though there are some serious structural faultlines showing in this export economy.

The thing I dont get is that if there are massive capital inflows into the stock market, why is it only 25 points up for the year? The P/E ratios are still strong so there is neither long term fundamental investing nor short term speculation in the equities market. If that money is indeed coming in, where is it all going? No new major manufacturers are coming, in fact, we have lost the last few to Malaysia and Vietnam.

I am not sure you are reacting on my message....but, who said the export market is dead.....I surely didnot...

The inflow in capital also means an outflow of invidual and insitutional capital from Thailand, because shares are going back and forth doesnot neccisarily mean that the index has to go up.

J

[Nemo.]

I dont think P/E ratios mean much in asia since accounting is rather "wild west" and its normal practice to bribe auditors (seen it happen) so "profits" are often make believe.

Capital flows to emerging markets/(like Thailand) are really "theme investing" (a.k.a. stupid fashions!) and the money would leave just as quickly as it came. Even quicker actually in a "panic" (a.k.a. "when the water buffaloes in big investment managers realise they were had")

The US is massively in debt to the world, especially Japan. If they own anymore Sushi will become as American as apple pie! You cant keep borrowing abroad to fund consumer debt that is spent on imported goods and expect a strong currency.

Sorry, but the export market is all but dead in Thailand. Its hard enough to compete with the Chinese at 41 baht/dollar but below 39 and I am watching my manufacturers close doors across the country. The Japanese are still in good shape with their in house producers. Lots of auto parts and such. Overall though there are some serious structural faultlines showing in this export economy.

The thing I dont get is that if there are massive capital inflows into the stock market, why is it only 25 points up for the year? The P/E ratios are still strong so there is neither long term fundamental investing nor short term speculation in the equities market. If that money is indeed coming in, where is it all going? No new major manufacturers are coming, in fact, we have lost the last few to Malaysia and Vietnam.

[mitrapaap]

Exactly... the baht has only gained most over the US dollar, just as the USD dropped over other major currencies.

The US DOLLAR REALLY HAS NOT DROPPED AGAINST OTHER CURRENCIES.

1$ = NOW about 119Yen ..........1$= NOW about 1.26 Euro 1$ = ...........37BAHT RIGHT NOW

1$= 1 1/2 Years ago...100Yen...... 1$ was about then 1.33 Euro 1$..was about then ..40BAHT

Ever since the CHINESE YUAN took the Thai Baht into it basket

the Thai Bath has been moving with the CHINESE YUAN

ALL OTHER EXPLANITIONS ARE HOG WASH

All I really know about money is how much of it is in my bank account. But if one and a half year ago 1$ was worth 1.33 Euro and today the same $ is only worth 1.26 Euro then that sounds to me like the dollar has dropped against the Euro, unless in modern arithmetics 1.26 is more than 1.33. So how can you say The US DOLLAR REALLY HAS NOT DROPPED.... ?

[mitrapaap]

from this side of the pond, we see the decline in tourism and influx of money from over here.

daily news warns tourists about the floods and fires and the unstablility in the region. How it can go up now is an indication of manipulation. Everyone is saying "what the heck, lets do tijuana"

This flux in the economy is another red flag for tourists over here. Just my opinion based on the local talk here in california.

From a european point of view: it's the Bush's, the Homeland Security, the transfer of my personal data when i enter an airplane that is going to your country, the overall mood in your country, Guantanamo Camp, and the fear that you can't make a joke about bombs at an airport anymore without going to the former.

You should care about this more then about flodding and fires.

doubled and trippled from by another European

[ding]

Exactly... the baht has only gained most over the US dollar, just as the USD dropped over other major currencies.

The US DOLLAR REALLY HAS NOT DROPPED AGAINST OTHER CURRENCIES.

1$ = NOW about 119Yen ..........1$= NOW about 1.26 Euro 1$ = ...........37BAHT RIGHT NOW

1$= 1 1/2 Years ago...100Yen...... 1$ was about then 1.33 Euro 1$..was about then ..40BAHT

Ever since the CHINESE YUAN took the Thai Baht into it basket

the Thai Bath has been moving with the CHINESE YUAN

ALL OTHER EXPLANITIONS ARE HOG WASH

All I really know about money is how much of it is in my bank account. But if one and a half year ago 1$ was worth 1.33 Euro and today the same $ is only worth 1.26 Euro then that sounds to me like the dollar has dropped against the Euro, unless in modern arithmetics 1.26 is more than 1.33. So how can you say The US DOLLAR REALLY HAS NOT DROPPED.... ?

7 basis stronger

[Happy Jack]

From my perspective the US dollar has definitely dropped. A few years back 1$US roughly equalled one Euro and against the $NZ (my home currency) we were running at around 45c to the dollar. In the last 6 months despite the NZ dollar has dropping significantly my recent transactions still show it buying in the 67-69 US cent range (based on purchases of product ex US via internet).

However the Thai baht is still strong against the NZ dollar and the money we are sending home to our Thai family is not producing anywhere near the number of Baht it used to. (Say 2 years ago 35 baht to the NZ dollar - now about 25 baht).

This can only be bad for anyone who relies on rice exports for their income (Oh hey - that's say 90% of the population) or on the tourist dollar (the other 10%).

For the uninitiated (excuse me if I'm teaching grandmothers to suck eggs)- a high exchange rate only helps countries which import more than they export. So lets hope some of this (possibly engineered) value falls out of the baht soon for the sake of the country.

[moodang]

I seem to remember the dollor going down to just over 35 baht for a couple weeks about four years ago. I am sure of it. Does anybody else remember that?

[Old Man River]

I seem to remember the dollor going down to just over 35 baht for a couple weeks about four years ago. I am sure of it. Does anybody else remember that?

A quick check at the BOT's website shows it strengthened back to the mid 36 range in 1999, after hitting a high in the low 50's following the deval.

[george]

Update:

Baht appreciates sharply on higher exports, says SCB chief

BANGKOK: -- The baht has appreciated sharply for this moment because of increased exports in September and a continued foreign capital inflow into the country, according to a top banker.

Khunying Jada Wattanasiritham, President of Siam Commercial Bank, said the foreign capital inflow into the Stock Exchange of Thailand in large amount had made the local currency strengthened quickly.

To protect themselves from impacts of the sharp appreciation of the baht, she suggested, exporters make a short-term forward contract to hedge against currency exchange risks.

However, the SCB chief said she believed the Bank of Thailand would attempt to supervise the baht to ensure it would not strengthen too quickly.

On how munch the stronger baht would have an impact on exporters, she said, it depended on a currency movement of rivals.

Should the baht appreciate in the same direction with rival’s currencies, the country’s export competitiveness would not be affected, she added.

--TNA 2006-10-24

[sting01]

Well the Khunyin is great advisor :

Should the price expressed in $ of the shrimp kilo from China and thailand stay equal, the export of shrimp will be not hurt. I am impress indeed by so much wise and science.

One problem stay still, does SEA is the only place in the world who export (or try to export) rice? For how much in the Thai economy account tourism and support money send by the in-law from US and UK? 10 years ago it was feast in La Camargue when rice producers signed their first export contract, maybe soon it will be a new one!

[richard10365]

I think things will start to change after the elections in November. First the democrats will bring the soldiers home, then impeach George Bush, and then stop spending money in Iraq.

The money they save that was going to be spent in Iraq will be spent in the USA on important things and thus help return the American economy back to normal.

Thus, bringing the dollar back to where it should be.

Or,.....am I just dreaming???

[Naam]

"I seem to remember the dollor going down to just over 35 baht"

*****

correct!

[chownah]

One problem stay still, does SEA is the only place in the world who export (or try to export) rice?

I think that Vietnam and Thailand are neck and neck going for first and second in world exports of rice and I think that the US is third.

Chownah

[harpman88]

But, remember when it was 25 to the dollar!!

You beat me to it Cork! 37B/$ a low number?? (as was stated above) ?? Relative to what?

I also put in many hours of overtime for several years before I retired to add to my savings /investments so I wouldnt only have to depend only on my pension(also with yearly COLA)

and hence not be so much at the mercy of the fluctuating currencies. As for being able to predict the long term future of world currencies,economies,etc. IN ADVANCE, It just cannot be done.

[simcity]

did the newpaper said today the central bank plan to drop the interest rates in thailand !

that must weaken the baht .

[DFCarlson]

Ahhhhhhh... 36.715 at last look. Well, the best I can do is keep my several Excel spreadsheets up to date. So far I'm OK, but I hope this trend reverses soon. The wife wants to go back to work, so that's a good thing!

[Estrada]

But, remember when it was 25 to the dollar!!

I prefer to remember when it was B54 to $1!

My salary has dropped from B360,000 a month to B250,000!

[HenryB]

Soon it will be 1dollar to 10 baht.

That is the reason to buy houses.

You made fun of my 28 houses in GF name and 6 in her brothers name

But remember the houseing prices are in Baht.

Buy many houses and be rich.

[bkkandrew]

Soon it will be 1dollar to 10 baht.

That is the reason to buy houses.

You made fun of my 28 houses in GF name and 6 in her brothers name

But remember the houseing prices are in Baht.

Buy many houses and be rich.

Minor correction: your present GF and her "brother" will be rich

[Naam]

Soon it will be 1dollar to 10 baht.

That is the reason to buy houses.

You made fun of my 28 houses in GF name and 6 in her brothers name

But remember the houseing prices are in Baht.

Buy many houses and be rich.

Minor correction: your present GF and her "brother" will be rich