GBP/THB, Your Plan Now?

[chiang mai]

As many British expats will be painfully aware the Pound is sinking into the sunset and all the forecasts are for it to go further. Against USD it's currently around 1.29 and SCB is showing 44.50 against the Baht, it's being suggested that 1.20 and 40 (respectively) are likely and that those numbers could remain for quite some time, years rather than months.

 

The impact of the above is that UK based pensions and investments now translate into fewer baht and this will probably cause pain for some. On the upside, those with substantial Baht assets, houses, investments or cash have seen their Pound equivalent assets increase quite substantially.

 

So my question is, what are you going to do now, will you stay in Thailand, cut back on your expenses and/or try to find new ways of earning money, OR, will you cash in your Thai assets and convert them into Pounds (or another currency) and leave?

 

FWIW I'm planning on staying here, although I can imagine there  could come a point when cashing in makes sense. 

 

I'm loathe to post anything from the Daily Mail but this article does pretty much tell in simple terms, what the position is and reflects what others are saying:

 

http://www.dailymail.co.uk/money/markets/article-3701788/What-sterling-s-slump-means-UK-s-economy-businesses-households.html

Edited August 11, 2016 by chiang mai
to add link

[taotoo]

I plan to continue to never check the exchange rate and carry on as ever.

[chiang mai]

Here's one piece of half way good news on this subject that I'd missed, just to cheer folks up:

 

"It contrasts with a median forecast by economists surveyed by Bloomberg for $1.33 at the end of 2017 and $1.42 in 2018. While no one sees it above $1.50 by the end of next year, Barclays Plc, ING Financial Markets, Prestige Economics LLC and BNP Paribas SA also see it above $1.50 by the end of 2018".

 

http://www.bloomberg.com/news/articles/2016-08-10/rare-brexit-optimist-calls-for-pound-to-climb-back-toward-1-50

[autanic]

A big issue is that few Tourists will visit LOS.

Fewer tourists mean the economy will eventually hit the reverse button, mean the baht will drop again causing more tourist to come. in time.

 

I think what I am trying to articulate, is don't panic. Fluctuations in the exchange rate should never factor into long term decisions 

[Berty100]

On 8/12/2016 at 7:39 AM, chiang mai said:

Here's one piece of half way good news on this subject that I'd missed, just to cheer folks up:

 

"It contrasts with a median forecast by economists surveyed by Bloomberg for $1.33 at the end of 2017 and $1.42 in 2018. While no one sees it above $1.50 by the end of next year, Barclays Plc, ING Financial Markets, Prestige Economics LLC and BNP Paribas SA also see it above $1.50 by the end of 2018".

 

http://www.bloomberg.com/news/articles/2016-08-10/rare-brexit-optimist-calls-for-pound-to-climb-back-toward-1-50

 

The only problem with that prediction is that Thailand doesn't use the USD as currency, so if the the exchange rate GBP/USD gets better for the GBP for some reason, doesn't necessarily mean they will also get more Thai Baht for their Pounds.

[chiang mai]

37 minutes ago, Berty100 said:

 

The only problem with that prediction is that Thailand doesn't use the USD as currency, so if the the exchange rate GBP/USD gets better for the GBP for some reason, doesn't necessarily mean they will also get more Thai Baht for their Pounds.

 

Indeed, except THB largely tracks USD under BOT's managed float system.

[THAIJAMES]

If you can hold off for a year or two  the pound is likely to be back above  US1.50
GBP seems to be tracking similar but milder performance to 1984-1985 when it went down to $1.05 and stayed under $1.50 for 2 years.

Edited August 14, 2016 by THAIJAMES

[cmsally]

One thing here is that the "situation" in Thailand really has almost no effect on the Baht level.

So as above better to watch the Dollar and ignore the Baht. Unless UK interests rates improve I don't see a great rise in the GBP

[Ricardo]

The dailymail-link is of course blocked, for those of us here in Thailand, by the MICT.

 

I wish they would get-over-it !

[happy Joe]

On 14/08/2016 at 1:12 AM, autanic said:

A big issue is that few Tourists will visit LOS.

Fewer tourists mean the economy will eventually hit the reverse button, mean the baht will drop again causing more tourist to come. in time.

 

 

It's by reading fine analysis such as this that we understand the genius of Brexit vote 

[chiang mai]

On 14/08/2016 at 1:12 AM, autanic said:

A big issue is that few Tourists will visit LOS.

Fewer tourists mean the economy will eventually hit the reverse button, mean the baht will drop again causing more tourist to come. in time.

 

I think what I am trying to articulate, is don't panic. Fluctuations in the exchange rate should never factor into long term decisions 

 

Historically you would be wrong, even when there were tanks on the streets in Bangkok ans snipers were culling the crowd, tourist numbers were barely impacted.

[chiang mai]

18 hours ago, cmsally said:

One thing here is that the "situation" in Thailand really has almost no effect on the Baht level.

So as above better to watch the Dollar and ignore the Baht. Unless UK interests rates improve I don't see a great rise in the GBP

 

Agreed, although my take is that the surge in THB strength last week was as a result of increased confidence following the referendum outcome, it will be interesting to see this week if the bombings cause a reversal of that confidence and if that is reflected in THB value.

[chiang mai]

1 hour ago, Ricardo said:

The dailymail-link is of course blocked, for those of us here in Thailand, by the MICT.

 

I wish they would get-over-it !

 

Oddly it is OK for me in Mae Rim on TOT fibre.

[chiang mai]

22 hours ago, THAIJAMES said:

If you can hold off for a year or two  the pound is likely to be back above  US1.50
GBP seems to be tracking similar but milder performance to 1984-1985 when it went down to $1.05 and stayed under $1.50 for 2 years.

 

It's a bit of a coin toss isn't it, the US Fed. will increase interest rates at some point and unless the UK's trade position is looking strong by then, GBP will fall against USD hence GBP/THB will fall also.

[Henryford]

Before the referendum i transferred enough over here to last 1-2 years. The Pound is only down 10% and i am sure will rebound to at least 50 within that time. I expect that being out of the EUSSR the Pound will be much stronger in 3-5 years. I would be more worried if i relied on Euros.

[chiang mai]

Looking at the GBP/THB rates this morning, all the onshore Thai banks have changed their rates by up to 50 satang against the Pound, this despite the fact that GBP/has fallen against USD over that time. Thursday last GBP/THB was pushing 44.10 onshore, today it's circe 44.60. So domestc affairs are impacting exchange rate currently, albeit to a lesser degree.

 

As for the Pound having lost only ten per cent: in June last year I was using 54.50 for my monthly book keeping purposes, today I'm using 44.50, that's closer to 20%.

[Henryford]

Right again CM but i am looking at the average rate over the last 8 years which for me was 50. The rate obviously varies a lot even without BREXIT and we have been down to 44 before. For budgeting purposes i think 50 is a good figure.

[sandyf]

25 minutes ago, chiang mai said:

Looking at the GBP/THB rates this morning, all the onshore Thai banks have changed their rates by up to 50 satang against the Pound, this despite the fact that GBP/has fallen against USD over that time. Thursday last GBP/THB was pushing 44.10 onshore, today it's circe 44.60. So domestc affairs are impacting exchange rate currently, albeit to a lesser degree.

 

As for the Pound having lost only ten per cent: in June last year I was using 54.50 for my monthly book keeping purposes, today I'm using 44.50, that's closer to 20%.

The pound has risen slightly this morning against the USD. Hit a low of 1.29 about 6am but is now at 1.2937. The pound is also increasing against the Euro so just have to see what the day brings.

I think you are right about the US, now the dust has settled I can't see them putting a rate hike off much longer which would be another setback for the pound.

 

PS. Sods law. Now going south again.

Edited August 15, 2016 by sandyf

[sandyf]

19 minutes ago, Henryford said:

Before the referendum i transferred enough over here to last 1-2 years. The Pound is only down 10% and i am sure will rebound to at least 50 within that time. I expect that being out of the EUSSR the Pound will be much stronger in 3-5 years. I would be more worried if i relied on Euros.

A year ago the Euro was worth about 70p, today it is worth 86p.

[Huayrat]

The pound is Dead.. Won't recover for years.. If you think pattaya is quiet now wait til the busy season it won't be Busy.. The Ppl on a pension  must be barely surviving.. That's a 15% loss since the vote.. It's crippling.. Mark carney the  Bank of England Governor makes it worse..  I'm losing 15k Baht per month and it's not good..

[Huayrat]

On 14 สิงหาคม 2016 at 2:19 AM, chiang mai said:

 

Indeed, except THB largely tracks USD under BOT's managed float system.

 

 

No no it Doesn't .. That's a myth that everyone keeps saying

[MJP]

The plan now is to open up a street of go-go bars in Southend catering to rich, retired fat old Asian men.

[chiang mai]

4 minutes ago, Huayrat said:

 

 

No no it Doesn't .. That's a myth that everyone keeps saying

 

Oh, OK then!

[chiang mai]

10 hours ago, Henryford said:

Right again CM but i am looking at the average rate over the last 8 years which for me was 50. The rate obviously varies a lot even without BREXIT and we have been down to 44 before. For budgeting purposes i think 50 is a good figure.

 

I'm not sure 50 is going to be the standard going forward, FWIW I've adjusted my accounting to 42 (and not just because that's the answer to everything). On the plus side it means that I've now gained quite a lot in terms of Pounds Sterling, the question is whether to realise that gain or not.

[awayego]

12 hours ago, Huayrat said:

The pound is Dead.. Won't recover for years.. If you think pattaya is quiet now wait til the busy season it won't be Busy.. The Ppl on a pension  must be barely surviving.. That's a 15% loss since the vote.. It's crippling.. Mark carney the  Bank of England Governor makes it worse..  I'm losing 15k Baht per month and it's not good..

 

I'm in the same boat but with no health cover and now barely able to cover school fees, we're off back to UK next May.

[gandalf12]

When I first came to Thailand the rate was around 35 to the pound. You just have to work on a worst case scenario which obviously many people here have not done

[stephenterry]

If the exchange rate falls below 39 baht to £1,  I will not meet the retirement criteria as I rely solely on income, not having a bank deposit anywhere near 800k.

 

I will have to reside out of Thailand, perhaps resorting to tourist visa entries (if possible). Any suggestions where best to live?  

[little mary sunshine]

The pound is predicted, by Bloomberg International, to decrease

in value another 9-12%. Recovery to take 12-24 month to recoup 

this 9-12% loss.   After that it's anyone's guess!!

[chiang mai]

1 minute ago, stephenterry said:

If the exchange rate falls below 39 baht to £1,  I will not meet the retirement criteria as I rely solely on income, not having a bank deposit anywhere near 800k.

 

I will have to reside out of Thailand, perhaps resorting to tourist visa entries (if possible). Any suggestions where best to live?  

 

Cambodia is the cheaper option, Sianoukville (sp) is on the water and supposed to be very pleasant - the PI is a second choice although too many guns there for my liking.

[AlexRich]

My personal view on this is that it will take a few years for the GBP to recover as it looks like Article 50 will not be triggered anytime soon and the two year negotiation period will start some time in late 2017. The uncertainty and leaks to the press that will ensue once the process gets going will not help matters either. As everything is relative the only real hope is that other currencies falter, so perhaps issues coming out of China, political issues in Thailand or a strengthening dollar (should they raise rates) could dampen down Far East currencies - i.e. weaken the Baht.

 

Plan? Cut back on spending and look for investments with better yields and/or less exposure to sterling weakness.