Why is Thai baht strengthening?

[chiang mai]

2 minutes ago, GMajor said:

 

Please specify your timeline.

 

1997 to today. Actually only 2013 to today.

 

But BOT's managed float has been in place since 1997.

Edited January 12, 2017 by chiang mai

[Roger Lee]

 

You're missing something, probably more than just one thing.

 

If it takes more baht to buy one dollar that means the dollar is stronger. Right now it takes circa 35.5 baht to buy one dollar, when Baht strengthened against USD it took only 29 baht to buy one dollar.

I agree so hence my question. If the dollar is strong against the baht now why the "Why is Thai baht strengthening?" In the op's post?

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[BuaBS]

1 hour ago, Peterw42 said:

Isnt the Baht strong because oil price is down, Thailand imports 100% of it oil and everything runs on oil. oil down = Baht up

Oil down , THB up ?? Not at the pump :

http://www.pttplc.com/en/Media-Center/Oil-Price/pages/Bangkok-Oil-Price.aspx?s=1

[chiang mai]

Just now, Roger Lee said:

 

I agree and hence my question. If the dollar is strong against the baht now why the "Why is Thai baht strengthening?" In the op's post?


Sent from my iPad using Thaivisa Connect

 

 

THB is not strengthening against USD, it's weakened. But GBP has lost against USD which means it has also weakened against THB which some people translate as being the Baht is getting stronger which it isn't.

[elgordo38]

3 hours ago, Chicog said:

Because they're weakening?

Tourism is up and they must buy bahts to come 30% I think by TAT reckoning. The set is setting new highs and money is flowing in there. Foreigners are plowing in money to support their Thai families build houses that they cannot own, buy condo's. Not a lot of outflow but lots of inflow. 

[chiang mai]

1 minute ago, BuaBS said:

Oil down , THB up ?? Not at the pump :

http://www.pttplc.com/en/Media-Center/Oil-Price/pages/Bangkok-Oil-Price.aspx?s=1

 

Um, oil is increasing not going down.

[chiang mai]

Just now, elgordo38 said:

Tourism is up and they must buy bahts to come 30% I think by TAT reckoning. The set is setting new highs and money is flowing in there. Foreigners are plowing in money to support their Thai families build houses that they cannot own, buy condo's. Not a lot of outflow but lots of inflow. 

 

And just to make 3 out of 3 ....... tourism is down, because of the cut to zero dollar tours.

[elgordo38]

Just now, chiang mai said:

 

And just to make 3 out of 3 ....... tourism is down, because of the cut to zero dollar tours.

Incredible you want me to take your word over the figures that TAT pumps out almost daily?? Are you saying they would lie. Incredible. Who can one believe anymore. 

[chiang mai]

Just now, elgordo38 said:

Incredible you want me to take your word over the figures that TAT pumps out almost daily?? Are you saying they would lie. Incredible. Who can one believe anymore. 

 

Arf arf arf.

[BuaBS]

2 minutes ago, chiang mai said:

 

Um, oil is increasing not going down.

Peterw42   said :  Isnt the Baht strong because oil price is down, Thailand imports 100% of it oil and everything runs on oil. oil down = Baht up

 

That's why I questionned it. I know too well diesel is up,up, UP !

[CGW]

Thailand does Not import 100% of its oil, its only about 90%, they do have lots of gas.......... Maybe thats the reason?

[chiang mai]

6 minutes ago, CGW said:

Thailand does Not import 100% of its oil, its only about 90%, they do have lots of gas.......... Maybe thats the reason?

 

Once again, THB is not strengthening, it's falling against USD (90 MA) and GBP has fallen against USD also (which means GBP has weakened against THB).

[carstenp]

https://www.investing.com/news/forex-news/dollar-lower-as-trump-disappoints-on-policy-details-452652

[Peterw42]

1 hour ago, SOUTHERNSTAR said:

Oil imports is reflected in the trade balance and that's been positive for many years. With the lower oil price the trade balance didn't turn more positive as it was off set by lower exports. The Baht is too small to play a leading role in FX and rather flows the decrease or increase in the value of major currencies. That means that normal things happening in the country don't influence the value of the Baht as much as things happening in the US for example.

 

I get what you are saying, but if less baht is leaving thailand (supply) to buy foreign currency, to then buy oil. If another country then wants to buy some rice, shoes, ball bearings from thailand, they want thai baht (demand). Less thai baht for sale, the price goes up. If you convert a chunk of thai baht into a barrel of oil, and convert some US dollars into a barrel of oil, then trade the oil. 

Edited January 12, 2017 by Peterw42

[IAMHERE]

More Thai baht are wanted/needed than dollars. The rate goes up and down according to how many people want to own baht or dollars. I'm guessing it is just too many dollars left lying around Thailand from the xmas visitor tourist so nobody really needs more dollars right now.

[Familyaffairs]

1 hour ago, Peterw42 said:

Isnt the Baht strong because oil price is down, Thailand imports 100% of it oil and everything runs on oil. oil down = Baht up

Actually, oil prices have risen a few percent. Also, Thailand has its own oil production fields, and does not import 100% of its needs

[chiang mai]

6 minutes ago, Peterw42 said:

 

I get what you are saying, but if less baht is leaving thailand (supply) to buy foreign currency, to then buy oil. If another country then wants to buy some rice, shoes, ball bearings from thailand, they want thai baht (demand). Less thai baht for sale, the price goes up. If you convert a chunk of thai baht into a barrel of oil, and convert some US dollars into a barrel of oil, then trade the oil. 

 

THB doesn't leave Thailand, oil imports are paid for in USD and BOT holds large amounts of foreign currency reserves.

 

Exports to those people wanting to buy rice shoes and ballbearings are also paid for (65% at last count) in USD.

[SOUTHERNSTAR]

10 minutes ago, Peterw42 said:

 

I get what you are saying, but if less baht is leaving thailand (supply) to buy foreign currency, to then buy oil. If another country then wants to buy some rice, shoes, ball bearings from thailand, they want thai baht (demand). Less thai baht for sale, the price goes up. If you convert a chunk of thai baht into a barrel of oil, and convert some US dollars into a barrel of oil, then trade the oil. 

Yes but we selled less rice at they same time we bought money wise less oil. The two off sets each other as the supply and demand decreased at the same time. But unfortunately what we talk about is theory as in the 21st century perception and manipulation is stronger than market forces.

[SOUTHERNSTAR]

45 minutes ago, chiang mai said:

 

It seems the total value of bonds held in Thailand by foreigners is around baht 700 billion so the article you read may have transposed numbers or whatever, capital outflows of THB 700 bill. would be an earthquake moment since outflows of around 12 billion baht are considered quite high.

http://www.nationmultimedia.com/news/business/EconomyAndTourism/30253476

 

All the news I was able to find on this subject starts around 2015 with inflows as a result of Brexit and then muted outflows as the Ringgit crashes, otherwise it's business as usual out there.

 

 

Hi I found the article and it was in the BKK post in the business section and published on 2 January 2017 titled Central Bank: Heavy outflows unlikely to hurt (sorry not Bloomberg). The B 700 bn was for the first 11 months of the year, sorry for the incorrect timeframe. I can't place a link due to TV rule for BKK Post.

[chiang mai]

3 minutes ago, SOUTHERNSTAR said:

Hi I found the article and it was in the BKK post in the business section and published on 2 January 2017 titled Central Bank: Heavy outflows unlikely to hurt (sorry not Bloomberg). The B 700 bn was for the first 11 months of the year, sorry for the incorrect timeframe. I can't place a link due to TV rule for BKK Post.

 

700 billion for the year doesn't seem unrealistic. The problem is that inflows and outflows are at work every day hence without knowing what the other side of the equation looks like it's hard to get too excited although I suspect the net position is strongly minus.

[elgenon]

To the poster who said Western money has no value: What money do you feel has value and why?

 

Yes, Thai Baht is pegged to the dollar. The range it is allowed to trade in is influenced by the relative values. For example, if there is too much pressure on the baht it is allowed to fall to a lower range. The Thai economy is doing a bit poorly so the government is doing large infrastructure projects to raise growth.

 

The Chinese gov't is limiting access to bitcoins to help stem the capital outflows. Even the Chinese don't believe in the gov't so they are moving as much money out of the country as they can. Chinese debt is 3x their GDP. Much worse than America. They also have huge bank debt problems.

 

To the poster who said oil is down. It is actually up over last year.

 

So much bad info.

[chiang mai]

2 minutes ago, elgenon said:

To the poster who said Western money has no value: What money do you feel has value and why?

 

Yes, Thai Baht is pegged to the dollar. The range it is allowed to trade in is influenced by the relative values. For example, if there is too much pressure on the baht it is allowed to fall to a lower range. The Thai economy is doing a bit poorly so the government is doing large infrastructure projects to raise growth.

 

The Chinese gov't is limiting access to bitcoins to help stem the capital outflows. Even the Chinese don't believe in the gov't so they are moving as much money out of the country as they can. Chinese debt is 3x their GDP. Much worse than America. They also have huge bank debt problems.

 

To the poster who said oil is down. It is actually up over last year.

 

So much bad info.

 

No the Baht is not pegged to the Dollar, BOT operates a managed float.

[KarenBravo]

2 hours ago, Peterw42 said:

Isnt the Baht strong because oil price is down, Thailand imports 100% of it oil and everything runs on oil. oil down = Baht up

 

They are a net importer, but, they do not import 100% of their oil. How do you explain all the PTT production platforms in the Gulf of Thailand?

[helloagain]

4 hours ago, abrahamzvi said:

Simply because investors are gaining confidence in the economic development of Thailand and its political stability.

Where it gets stronger who will buy expensive rice and coconuts

[Dellboy218]

So no one think it has anything to do with bank interest rates then?  0.1% interest in UK 3% roughly  here. 

[chiang mai]

Just now, Dellboy218 said:

So no one think it has anything to do with bank interest rates then?  0.1% interest in UK 3% roughly  here. 

 

Not in the least. BTW the rates are:

 

UK = 0.25%

Thailand = 1.50%

 

 

[Dellboy218]

1 minute ago, chiang mai said:

 

Not in the least. BTW the rates are:

 

UK = 0.25%

Thailand = 1.50%

 

 

By the way UK  bank rates are about to  change to 0.1% and I am getting 3% here.

[chiang mai]

Just now, Dellboy218 said:

By the way UK  bank rates are about to  change to 0.1% and I am getting 3% here.

 

I also am getting over 3% here currently but that's on deposits I bought three years ago,. You didn't buy any fixed rate bank deposit nor any base rate linked banking product in the past six months at least at over 1.9%, insurance linked or equities linked maybe, bank rate linked never.

 

On the subject of UK base rates being reduced to 0.1%, I bow to your crystal ball and am in awe, really I am!

[Dante99]

5 hours ago, Dante99 said:

Everybody knows that a nobody knows.

3 pages of posts should be enough

 

you folks proved it, nobody knows

 

but you also proved I was wrong thinking everybody knows that, sorry

[chiang mai]

1 minute ago, Dante99 said:

3 pages of posts should be enough

 

you folks proved it, nobody knows

 

but you also proved I was wrong thinking everybody knows that, sorry

 

I think what this thread has proved in the massive gap between posters perception and reality.