Baht Likely To Strengthen To 35 To Dollar

[Old Man River]

Well..Lets put this into perspective.

Japan is the biggest importer of Thailands goods And good old great britain is the biggest investor (yes I can give you links...but why should I since you are too lazy to google).

Currently..the Yen is doing very well against the dollar and so is the pound. so untill further evidence that the dollar is making an impact (apart from cheaper petroleum) then Thailand is doing OK.

The big impact will be if/when japan actually raises it's interest rates above 0%.

Let's put this into perspective. During the 1st Quarter of 2006, Thai exports went as follows: ASEAN 21.1%, USA 15.2%, EU 14.1%, Japan 13.1%, China 8.7%, HK 5.6%, Middle East 4.5%, Australia 2.8%, Taiwan 2.5%, South Korea 2.0% and Others 10.4%. My source is the US government. At present, I can't put my finger on what currencies were used in these exports, but am comfortable to say that there is a reason why the Thai government and Thai exporters are more concerned with the USD/THB exchange rate than Yen/THB exchange rate. I would be interested to look at the links you have that show that the majority of these exports were Yen dominated and not USD denominated.

[chiang mai]

My good old New Zealand dollar is also strengthening against the US dollar (the later being arrogantly referred to as THE dollar as if no other part of the world has a monetary system) but staying about the same against the Baht. If one had no faith in America one might think this was a sign that the US dollar is collapsing.

Same thing is happening with the UK Pound (strengthening) but historically this kind of imbalance is fairly short lived. I would guess we'll see the Pound slide against the dollar to a more sustainable level inside of two months.

[Jai Dee]

Tarisa warns baht could grow stronger

Bank of Thailand (BOT)'s governor Tarisa Wattanagase warned Thursday that Thai baht is likely to be further stronger from external factors but current account deficit next year would help slowing down the appreciation.

Tarisa Watanagase said optimistically that the appreciating baht would benefit Thailand's mega-project investment because the amount of imported goods would be cheaper in terms of the baht currency.

She said the degree that the baht value would climb up depended largely on the US economic adjustment, Asian currencies, and changes in oil prices. The BOT said it would continue closely "oversee" the baht value to reduce volatility.

Source: The Nation - 7 December 2006

[cclub75]

Tarisa Watanagase said optimistically that the appreciating baht would benefit Thailand's mega-project investment because the amount of imported goods would be cheaper in terms of the baht currency.

Last week, bath appreciation was a very bad news, was instigated by vilains speculators (farangs of course), and it was necessary for the BOT to take strong mesures to "solve the problem at its roots".

And now, it's an opportunity

We love you Tarisa !

The paper in BKK Post is more detailed. "Still, she conceded, the bank could not intervene in the baht movement for good because more than US$ 1 trillion had circulated worldwide on a daily basis."

http://www.bangkokpost.com/breaking_news/b...s.php?id=114836

[chiang mai]

Ah, the splendid sound of silence.

[tropo]

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

Yes, it already has. I got 35 using my international ATM card (Citibank) today.

[swain]

Its over guys... no more free lunch...

[chownah]

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

Yes, it already has. I got 35 using my international ATM card (Citibank) today.

NO no no no no....it has already hit 34. My mother in law will change money for you and her rate is 34 baht per dollar.....the line forms on the right.....better hurry though 'cause she says that maybe tomorrow the rate will be 30.

Chownah

[jumnien]

Of course, our Thai assets (cars, condos, etc.) have been increasing in value dramatically in dollar terms this year. But everything has a cycle and I wouldn't count on these increases in vale forever. The baht will cycle back up at some point and our assets value will decrease in dollar terms. Ride the waves, don't try to stop the tide!

[Martin]

The money changers out here (from the big banks, right through to 'chownah's' mother-in-law) provide a great service.

I assume that accepting 34 from 'chownah's' mother-in-law saves the cost in time and gasoline of driving to one of the big banks to get 35.

When I was a periodic economic migrant to England from Isaan, I used to come back with my earnings (withdrawn fom my UK bank account) in twenty-pound notes and change them to bahts in the bank here.

What matters is how many bahts you end up with, not the nominal rate.

I looked at all the ways of changing and transferring and that gave me most bahts.

Some of the other ways, via 'plastic' etc, were very expensive.

[Old Man River]

But the mainstay of thailand exports is still Rice and rubber and we all know the current government reduced rice export prices recently because of this.

What? You say rice and rubber are Thailand's main exports? Are you joking?

In 2005, on a % of total basis (100%), Thailand's exports were Agriculture 7.2%, Fisheries 1.8%, Mining 1.8% and Manufacturing 89.2%. Hi-Tech Products led the way in the Manufacturing segment.

Indifferent, while the majority of the population is involved in agriculture, Thailand's main exports, by far, is manufactured products. What do you think they do on all those industrial estates?

[ColPyat]

But the mainstay of thailand exports is still Rice and rubber and we all know the current government reduced rice export prices recently because of this.

What? You say rice and rubber are Thailand's main exports? Are you joking?

In 2005, on a % of total basis (100%), Thailand's exports were Agriculture 7.2%, Fisheries 1.8%, Mining 1.8% and Manufacturing 89.2%. Hi-Tech Products led the way in the Manufacturing segment.

Indifferent, while the majority of the population is involved in agriculture, Thailand's main exports, by far, is manufactured products. What do you think they do on all those industrial estates?

How many percent of the exported manufactured products are from joint ventures, or foreign owned comapanies, especially companies who fall under the nominee structure issue?

I have difficulties to see "exports" such as BMW, Benz etc. who just use Thailand as a convenient location as real Thai exports.

How much of the manufacturing industry in Thailand is actually real Thai industry?

Sorry if my questions sounds naive, i really would like to know what more knowledgable people think.

[Martin]

"......while the majority of the population is involved in agriculture, Thailand's main exports, by far, is manufactured products."

A lot of those who form that 'majority involved in agriculture' are also providing that major social security system for those who work in manufacturing-for-export, which is summed up as: "If times turn bad, we will still be able to return to the village".

The statistics of exports of 'agriculture' and 'fisheries' are in themselves conglomerates of the outputs of intensive farming (in agribusinesses, akin to manufacturing) and surplus from families after they have put aside enough for their own use. I would be very interested to see some deeper analysis of Thailand economics, if anyone can point me in the right direction to find it.

It does seem to me that there is something wrong with the way 'homo sapiens' is conducting its affairs when the exchange-value of a currency fluctuates so much in reflection of the 'frothy' bits of the economy (such as interest rates and property speculation) and ignores the big parts of the economy.

I suppose it is a reflection of our willingness to be dependent on fiat money, which is the weakness of capitalism. All '-isms' seem to have a flip side.

But how strong is that faith? Does the proliferation of gold shops here reflect a degree of scepticism in it?

[Old Man River]

How many percent of the exported manufactured products are from joint ventures, or foreign owned comapanies, especially companies who fall under the nominee structure issue?

I have difficulties to see "exports" such as BMW, Benz etc. who just use Thailand as a convenient location as real Thai exports.

How much of the manufacturing industry in Thailand is actually real Thai industry?

Sorry if my questions sounds naive, i really would like to know what more knowledgable people think.

Flattery won't get you far, because I don't know the answers. Perhaps the Federation of Thai Industries may have estimates, or TDRI. Nobody really knows the amount of companies under nominee basis either, as it isn't a topic to be openly discussed. Hence, estimates I have seen range from a few hundred to the more recent estimate used of over 3,000.

It is easy to see foreign owned exporters of manufactured goods as mere assembly operations that do not add value to the country, but that simply is not the case. There is a reason why countries fight between themselves to attract foreign direct investment (FDI). These companies invest a great deal of long term capital in Thailand (and continually reinvest), purchase local parts, hire people (see thread on Thailand's low unemployment rate), provide training that gives previously unskilled people marketable skills (helping build a middle class), use local services and once BOI tax incentives expire, will pay a lot of taxes. Thai companies can do what they do, but it would take huge investments and difficulties accessing global markets. The Thai's are smart. Better to use other people's money.

I hope your dogs are doing well. I keep mine separated, otherwise it is world war three.

[ColPyat]

I hope your dogs are doing well. I keep mine separated, otherwise it is world war three.

So far they doin' alright, lets see. Don't want WW3 here, one chunk out of my hand and daily pain session in the hospital is already enough. Not talking of the unbearable boredom for not being able to do much

My question was more aimed at the condition of Thai knowledge base. I understand that FDI is very important, and adds a lot to education etc.

What i am interested to know is how would you see the rate between FDI companies, and purely Thai industry, especially regarding exports. Well, if that makes sense, somehow. Or, if in the present more globalised world economy that is an irrelevant issue?

[Old Man River]

I hope your dogs are doing well. I keep mine separated, otherwise it is world war three.

So far they doin' alright, lets see. Don't want WW3 here, one chunk out of my hand and daily pain session in the hospital is already enough. Not talking of the unbearable boredom for not being able to do much

My question was more aimed at the condition of Thai knowledge base. I understand that FDI is very important, and adds a lot to education etc.

What i am interested to know is how would you see the rate between FDI companies, and purely Thai industry, especially regarding exports. Well, if that makes sense, somehow. Or, if in the present more globalised world economy that is an irrelevant issue?

Specifically, I haven't a clue, although given the large proportion of capital intensive hi-tech items in exports, I would expect exports would be heavily skewed towards JV's. However, as you mention, outside of the academic world it is irrelevant unless way down the road some government gets in power that starts nationalizing things. That should never happen.

[ColPyat]

However, as you mention, outside of the academic world it is irrelevant unless way down the road some government gets in power that starts nationalizing things. That should never happen.

In a country like Thailand, where completely outlandish ideological based theories are often debated by the mainstream this is though a bit of a worry.

Anyhow, thanks.

[khunbill]

The US is a self sustaining economy. Who told you that, Bush?

Nope simple economics, history. USA is the largest exporter and importer...one state California is the 4th or 5th largest economy in the world....

But, for those of you that are able to read...not many I guess...a simple review of history and GDP of the USA would elighten...but I suppose that would be too much trouble...

most likely a thousand or more third worlders sitting around trying to read and comprehend..too much work, effort, intelligence... oh well