Thailand fights against its own currency's success

[Angry Dragon]

4 hours ago, keith101 said:

If Thailand's fiscal policy is to reduce the value of the baht it can only benefit US importers of Thai goods . It would also see a benefit here in larger exports and increased tourism so they should tell the US Treasury to go f themselves imo .

I hope they don't do that, as it would in theory make imports more expensive and make the portion of my salary in THB worth less.  I enjoy goods imported to Thailand and rely on a generous THB income.

[david555]

49 minutes ago, trainman34014 said:

That didn't happen in the case of Malaysia as far as i recall !

Malaysia  just lowered the bank guarantee …. same as Thailand is doing already ….10 AUG.2020….only 1 million and look from how high they came

[david555]

30 minutes ago, Angry Dragon said:

I hope they don't do that, as it would in theory make imports more expensive and make the portion of my salary in THB worth less.  I enjoy goods imported to Thailand and rely on a generous THB income.

Same for me ,as each person has his own interests in this ….

 

Personally   I don't mind they give lower rate for the € …., as I changed because the general policy from Thailand , and let me change condo buying plan , to use so condo money already 3 years (and going on...), so exchange rate don't make me cry , and May 2020 I plan return home country …, and so hoping to exchange remaining baht account  money to cheap Euro 's , and then I thank Thailand and give them a " Farang Smile " as giving "the finger" not nice.... lol

[colinsmallman]

Been to Thanachart Bank today to send money back to UK. No change in the rules, still require full paper trail of where the money originated from outside Thailand before you can send it back. Does any body know how to send 1.5million baht back to UK without tor tor 3 paperwork?

[david555]

1 minute ago, colinsmallman said:

Been to Thanachart Bank today to send money back to UK. No change in the rules, still require full paper trail of where the money originated from outside Thailand before you can send it back. Does any body know how to send 1.5million baht back to UK without tor tor 3 paperwork?

I suggest you talk to Super Rich exchangers BKK ….

[BestB]

5 hours ago, trainman34014 said:

If they were serious they would devalue the Baht by around 20% in the same way Malaysia did two or three years ago.  Truth is they are not interested and just give Lip Service to the matter !

If they just devalue currency they go on a currency manipulator black list

[IsaanAussie]

Interesting topic this. Today is pension day in Oz and I have been watching the rates most of the day. Jumping Jimmy Jesus! Thai baht going up quicker against the USD than for ages. Naturally the "OZ Dudder" heading the other way. Not transferwise action today.

[StayinThailand2much]

5 hours ago, trainman34014 said:

If they were serious they would devalue the Baht by around 20% in the same way Malaysia did two or three years ago.  Truth is they are not interested and just give Lip Service to the matter !

On one side, 50 families at the top of Thai society, who want to buy up property overseas cheaply with the help of an overvalued currency.

 

On the other, 69 million farmers, factory workers, hotel staff, exporters, and others, who want to make a living.

 

Guess, who will be taken seriously by government and BOT...

[whitfield]

35 minutes ago, colinsmallman said:

Been to Thanachart Bank today to send money back to UK. No change in the rules, still require full paper trail of where the money originated from outside Thailand before you can send it back. Does any body know how to send 1.5million baht back to UK without tor tor 3 paperwork?

Just find 2 retired expats from your country who live here and sell them your baht.  They will transfer money from their bank to yours in home country.  It's a win win as you use spot rate for the exchange.  They all need to show 800,000 Baht at some point.

[david555]

2 minutes ago, whitfield said:

Just find 2 retired expats from your country who live here and sell them your baht.  They will transfer money from their bank to yours in home country.  It's a win win as you use spot rate for the exchange.  They all need to show 800,000 Baht at some point.

And same time those two expatts are in breach with their visa as half of 800K is average what kept this rule over a year on bank !  IFF already you find such 2

 

=A theoretically suggestion as I may suggest you are not under that option 

[IsaanAussie]

Earlier this week I read an article saying over 1300 factories had either closed or were for sale. Others have closed down for months, including major players in the auto component supply chain. Being out of the automotive industry I decided to have a poke around to see if the exports are showing signs of stress. It seems that the hammer has just fallen and inventory levels are high as the car companies can allow. Production export orders were usually placed about 3 months ahead. The industry association reported 65K pickups were built for export in Sept, customs shows 35,000 were actually exported. Ooops!

A friend tells me that repos are growing and getting hard to shift. Oooops domestically too?

The last quarter of this year could well see some action of the unemployment numbers...

[passon]

You can speculate, regurgitate and quote economic theories until the next financial crisis breaks down economic doors, and some can pretend the existence of Trump's perceived economic prowess who in reality exhibits a perplexity towards international trade; all he's accomplished is destabilizing international economies with a shotgun approach of bluster and bravado.  Keynesian got it wrong, Robert Lucas got it wrong, and Paul Krugman got it wrong, just to name a few.  

 

Thailand has a consumer confidence problem [19 consecutive months], it has a consumer debt problem, it has a wage disparity problem with a rising cost of living, it has an unemployment problem, it has an export problem, it has a manufacturing problem with factories that either are up for sale or out of business [1,300 according to recent reports].  I don't see anything there that resembles sound fundamentals.  So theories mean absolutely nothing when compared to reality.  Managing a war is noting like fighting one.  Success is measured in results, not theories.  A strong baht is a theory not a success story.

 

People make less, so they spend less, and they save less.  They avoid buying houses, cars, appliances and many other big ticket items that drive an economy; that's not a theory, and it's certainly not a success story. 

[Stevemercer]

5 hours ago, keith101 said:

Should the central bank move too strongly to cool down the baht, it risks triggering U.S. sanctions against Thailand as a currency manipulator. In a May semiannual foreign exchange report, the U.S. Treasury Department placed neighboring Singapore, Malaysia and Vietnam on its "monitoring list" of trading partners whose currency practices were deemed to merit attention.

 

If Thailand's fiscal policy is to reduce the value of the baht it can only benefit US importers of Thai goods . It would also see a benefit here in larger exports and increased tourism so they should tell the US Treasury to go f themselves imo .

 

Exactly. Thailand must do what benefits the economy of Thailand. I reckon this fear about invoking US currency manipulation charges is just an excuse the government is using. 

 

Thailand relies on exports for over 75% of its income. The Government's policy (and therefore the central bank) in pushing the Baht up over the last 5 years is now harming the economy.

 

If the government is serious about reigning in the Baht (and I don't believe it is) all it has to do is announce that they believe the currency is too high and overvalued by 10 - 20%. Such a simple announcement feeds uncertainty into the market and becomes a self-fulfilling prophecy.

 

They won't do it because unspoken government policy is to keep the Baht high (and blame everyone else and/or make excuses). 

 

Thailand isn't fighting against its own currency - Thailand can control its own destiny well enough - and the government is in full control of the currency.

[passon]

2 minutes ago, passon said:

You can speculate, regurgitate and quote economic theories until the next financial crisis breaks down economic doors, and some can pretend the existence of Trump's perceived economic prowess who in reality exhibits a perplexity towards international trade; all he's accomplished is destabilizing international economies with a shotgun approach of bluster and bravado.  Keynesian got it wrong, Robert Lucas got it wrong, and Paul Krugman got it wrong, just to name a few.  

 

Thailand has a consumer confidence problem [19 consecutive months], it has a consumer debt problem, it has a wage disparity problem with a rising cost of living, it has an unemployment problem, it has an export problem, it has a manufacturing problem with factories that either are up for sale or out of business [1,300 according to recent reports].  I don't see anything there that resembles sound fundamentals.  So theories mean absolutely nothing when compared to reality.  Managing a war is noting like fighting one.  Success is measured in results, not theories.  A strong baht is a theory not a success story.

 

People make less, so they spend less, and they save less.  They avoid buying houses, cars, appliances and many other big ticket items that drive an economy; that's not a theory, and it's certainly not a success story. 

The bank is something more than men, I tell you.  It's the monster.  Men made it, but they can't control it.  John Steinbeck

[hotchilli]

6 hours ago, RotBenz8888 said:

Sure, but the condo bubble hasn't bust yet.

Only because rich Chinese are moving in by stealth.

[Lacessit]

Isaac Newton said it first. What goes up must come down. He was talking about gravity. He was also Master of the Royal Mint.

[ThaiWai]

4 hours ago, JimGant said:

And US exporters? Well, whatever it is that Thailand buys from the US is, because of the cheaper dollar, more competitive with other suppliers of exports to Thailand.

https://www.reuters.com/article/us-thailand-military/thai-army-to-acquire-eight-u-s-light-attack-helicopters-idUSKBN1WB161

[geisha]

Compared to many other countries, especially tourist destinations, Thailand invests zero in its infrastructure, planning, and ecology questions  of which they have enormous problems. And this since many years. Compared also to many other countries, there is no government help, social services, pensions for the millions of poor people. I’m sure we have  all seen the way the lower classes live.

This is why Thailand considers itself rich , all the tourist dollars etc 

disappears into the governments coffers , and their pockets. I spent many years in Phuket, and years back , when there was the chicken flu and egg scare, THAksin came down to Patong ,a huge organised show was put on in Bangla Road, and all the hotels, supermarkets gave away free food , chickens,  eggs etc. THere, looking on, i saw the poorest of Phuket people , , people tourists never see in normal life, queuing up for free chickens and food, amazed faces looking on at this “Amazing Thailand” . It made me cry. 

[SiSePuede419]

Thailand's currency is a bowl of noodles.

 

Still stable at around 30 Baht. ????

[IsaanAussie]

I dont believe the baht is a safe haven. The baht is simply not traded, who wants it outside Thailand? Have a look at the volume on any Forex exchange. Monitor your currency against the International reserve USD, compare it to your currency to the baht, see some similarity in trend? The baht trading volumes is only 1% of that between any of the majors. Happy to graph it for anyone

The Baht has gained ground against the USD over the last two years simply because no-one cares.

[todlad]

4 hours ago, miamiman123 said:

Cognitive dissonance ....I can’t and won’t sell that 13 year Mitsubishi Pajero for 400,000 baht. It’s like new and I bought it for 1.3 million just 13 years ago. 
ddduh? 

Every two or three years or so, I analyse the price of one or two second hand/pre owned vehicles. I started a long time ago with UK cars, Roller and Range Rover. Since then, Bangkok, Melbourne and a few others. So far, cars outside Thailand depreciate at expected rates and in a straight line and some along a curve.

 

7 years ago, I did my first Thai car. Straight line depreciation. Very low rate of depreciation. This suggested cars hold their value here very well: stickily!

 

If memory serves me, depreciation rates were sticky and predictable until last year when the rate increased albeit still straight line. So, older cars no longer holding their value as they used to?

 

I imagine many old stagers here know all this but when I first saw my data, I was surprised.

[Isaan sailor]

Here’s really happened today.  Thai Baht vaulted ahead of USD, the Euro, the Pound and most western currencies.  Conversely the Chinese Yuan also vaulted ahead to a two-month high today.

It doesn’t take a rocket scientist to see what’s happening.  Hot money inflows from Prayut’s best buddy ChiComs are sinking the USD and adding to Thailand’s USD reserves.

[IsaanAussie]

Just now, todlad said:

I imagine many old stagers here know all this but when I first saw my data, I was surprised.

Dont be surprised it has nothing to do with "normal" analysis. Here it has always been more cultural than economic. It is changing as the younger generations become more financially literate. 

The best I can offer in explanation is, I own something, it has value that I paid for it, if I drop the price I devalue myself. Sorry but hope that helps.

Common thread, no loss if not sold.

[Jen65]

One needs to remember the massive wealth gap between those who have and the have nots !!  It is staggering to watch the news where they show people living in tin shacks ( like you find in a shanty town !) and this is supposed to be a prosperous leading asian country (or so they would have one believe)  As the wealth gaps deepens and the economy slides with more businesses going under then we are already seeing an increase in drug smuggling as as people look for alternative income !  Poverty breeds crime and unrest !!  For me, when I see how some people live , the pollution, the driving - it is still 3rd world !!  

[IsaanAussie]

Just now, Jen65 said:

Poverty breeds crime and unrest !!  For me, when I see how some people live , the pollution, the driving - it is still 3rd world !!

Jen, come to our village and live for a day or so among the have nots. You will change your viewpoint.

[Number 6]

A nation surely doesn't want to tank it's currency. Must be half dozen tools left in the kit. I don't think lowering interest rates is sound. Expand money supply, spend foreign reserves on infrastructure.

 

Definitely need to sort out the condo disaster but that should not come at a cost to taxpayers.

 

Overhaul Education. Bring in Technology and STEM innovators. Secure water supply. New power infrastructure. Fix poverty in farming.

 

Never happen. It's a failed state. Only China's guiding hand can save this country now.

[Bastos60]

 

5 hours ago, CNXexpat said:

I read since years that it will burst soon, but nothing happened. 

Several of those projects went belly up, others aren't being finished, those that are finished are already financed/sold.

On the other hand, trying to get rid of those condo's will be a lot harder imo.

[Bastos60]

5 hours ago, CNXexpat said:

Not so easy as you think. They can´t say: "Today the value of our currency is 20% less". The US would like to do it also, but they can´t. If one country starts with it, a currency war will come soon, because other countries will do the same.

Pre-Euro times this was common practice in Europe. Some countries ended that practice in light of the common market, pegging their currency to the Deutsch Mark (this also meant easier access to the German market). 

 

But there is an adverse effect to depreciating your currency, making it vulnerable for speculation against it. 

 

 

[StayinThailand2much]

1 hour ago, IsaanAussie said:

I dont believe the baht is a safe haven. The baht is simply not traded, who wants it outside Thailand? Have a look at the volume on any Forex exchange. Monitor your currency against the International reserve USD, compare it to your currency to the baht, see some similarity in trend? The baht trading volumes is only 1% of that between any of the majors. Happy to graph it for anyone

The Baht has gained ground against the USD over the last two years simply because no-one cares.

Also, with so much trouble repatriating one's money out of Thailand, do the Chinese who deposit all the hot money in Thailand, know, that transferring the money out of Thailand again, eventually, might be a challenge? 

[StayinThailand2much]

31 minutes ago, Bastos60 said:

 

Several of those projects went belly up, others aren't being finished, those that are finished are already financed/sold.

On the other hand, trying to get rid of those condo's will be a lot harder imo.

Thailand is just lucky. The condo market is already a big bubble. Then there's rubber, palm oil, etc. - Does the BOT currently sit on vast foreign currency reserves? Hell, yeah! But what, if, for some reason, a high percentage of investors, depositors, or Thailand bond holders suddenly wanted their money back? The reason might be a world recession, or just a liquidity crunch in China...