European tourists decline against strong baht, competition

[Moo 2 349]

It's obvious that tourists who would like to visit Thailand are from "low-middle-class and every penny

count. So first thing they look at is value for money at the exchange rate, and i am sorry, but I have to

tell the Minister for tourism, your Baht is in a disastrous shape. Vietnamese and Cambodian Tourism

Departments are laughing all the way to the bank. 

[mogandave 7,245]

It's obvious that tourists who would like to visit Thailand are from "low-middle-class and every penny
count. So first thing they look at is value for money at the exchange rate, and i am sorry, but I have to
tell the Minister for tourism, your Baht is in a disastrous shape. Vietnamese and Cambodian Tourism
Departments are laughing all the way to the bank. 

I doubt very much that if every penny counted, they would be going on international holidays.

In any event, do you really think the Ministry of Tourism or even Finance fo that matter control the value of the Baht?

[dimitriv 2,080]

10 hours ago, mogandave said:

In any event, do you really think the Ministry of Tourism or even Finance fo that matter control the value of the Baht?

 

 

The government has a very big influence on the value, yes...  Thailand has many laws in place to prevent money going out of the country. They could change that. The interest in Thailand is high compared to other countries. They could change that too.  But for some reason they do nothing.

 

 

[mogandave 7,245]

 
The government has a very big influence on the value, yes...  Thailand has many laws in place to prevent money going out of the country. They could change that. The interest in Thailand is high compared to other countries. They could change that too.  But for some reason they do nothing.
 
 

Do you think they should try to manipulate their currency to devalue it?

How would allowing people to take money out of the county devalue the currency? In any event, they allow money to be taken out, just not currency.

The interest is high compared to what countries?

[Orton Rd 16,601]

On 10/11/2019 at 3:20 PM, Partenavia said:

If you walk past a Travel Agent shop in the UK, look at the exchange rates, currently £1 = 33 Baht!!

My mate got 35 in Feb in a Bkk hotel, took him to super rich where at least he got 39. Right he said lets buy a drink, can't mate it's 2.30, he thought I was joking. This was after he got ripped off as soon as he landed for the unpaid 'tax' on a tour and pick up he had already paid for which came to a mysterious 1k. Not impressed with Bkk he moved on to Kho Samui where he was last in 1988, it was somehow not quite the same, he's never coming back!

[CLS 1,540]

 
The government has a very big influence on the value, yes...  Thailand has many laws in place to prevent money going out of the country. They could change that. The interest in Thailand is high compared to other countries. They could change that too.  But for some reason they do nothing.
 
 

BoT interest is 1.5%.
Thai banks mortgages are 7%.
Civilized countries banks‘ margin is less than 1%. Go figure.

[brucec64 4,349]

Do you think they should try to manipulate their currency to devalue it?

How would allowing people to take money out of the county devalue the currency? In any event, they allow money to be taken out, just not currency.

The interest is high compared to what countries?

It's basic supply and demand. Thai currency is strong for many reasons, but the fact that Thailand is an export economy and a tourist economy means a very strong demand for thai currency. Relaxing currency controls would mean selling thai baht as the currency leaves the country, thus putting downward pressure on the thai exchange rate.

Sent from my SM-N950F using Thailand Forum - Thaivisa mobile app

[greeneking 1,142]

Just now, CLS said:

 

BoT interest is 1.5%.
Thai banks mortgages are 7%.
Civilized countries banks‘ margin is less than 1%. Go figure.

 

Siam Commercial Bank is big. And owned by? The others are also well connected with 'good' people.

[dimitriv 2,080]

5 hours ago, mogandave said:

 

Do you think they should try to manipulate their currency to devalue it?

How would allowing people to take money out of the county devalue the currency? In any event, they allow money to be taken out, just not currency.

The interest is high compared to what countries?

 

 

-Yes

-Thailand has many laws restricting money going out. Restrictions about investing abroad etc

-In the EU we have a negative interest at the moment. It is not strange that a lot of people convert their money to TBH and put it in a Thai bank.

 

I don't like the negative interest in the EU. I think it is wrong. But Thailand can better adapt. There is too much money going to Thailand, increasing the value of the Baht.

 

 

[dimitriv 2,080]

4 hours ago, CLS said:

BoT interest is 1.5%.
Thai banks mortgages are 7%.
Civilized countries banks‘ margin is less than 1%. Go figure.

 

 

Maybe there is a bigger risk lending people money?  More bad loans?

 

 

[saengd 2,977]

6 hours ago, brucec64 said:

It's basic supply and demand. Thai currency is strong for many reasons, but the fact that Thailand is an export economy and a tourist economy means a very strong demand for thai currency. Relaxing currency controls would mean selling thai baht as the currency leaves the country, thus putting downward pressure on the thai exchange rate.

Sent from my SM-N950F using Thailand Forum - Thaivisa mobile app
 

I agree with the first part but the second part is not quite right. At present, currency controls mean that Thai Baht must already be sold before it is exported so I'm not sure what you have in mind. The part of the  BOT currency controls that is relevant is that exporters must exchange money earned from exports, typically USD in 60% of cases, into THB within one year, plus that USD (or other foreign currency must be repatriated within twelve months). I have seen recently that BOT is currently extending those time frames to relieve upwards pressure on THB.

 

And currency controls also means that overseas banks cannot hold more than a predefined limit of THB, if they do, BOT will not allow Thai banks to transact with them. The fact the Baht is not fully convertible means there is a captive market for its value, if that market was extended or increased overseas the value of THB would fall. But that possibility opens up the risk of speculative attacks on the currency and a repeat of 1997 which is something most people want to avoid of course. Because THB is such a small currency it doesn't take much to move it in one direction or another, at least today Thai exporters have exchange rate stability albeit it remains too high on the scale.

 

One area where BOT could do more is to stem the inflows of hot money into government bonds which are seen globally as a very safe proposition. A few years ago BOT implemented capital controls whereby anyone who exported funds within one year incurred a 15% (?) tax, that was a harsh and crude measure but it was effective.