Baht weakens against dollar after tough talk by central bank

[Mayhem11]

Central banks step into the currency market and either buy or sell their currency. It is how the Reserve Bank of Australia has artificially lowered the AUD-USD exchange rate for years.

[WalkingOrders]

Showing 30.5 a significant change from the 29.65 I had not to long ago. Welcomed by me. I'm not making any bets on longterm, but I will hope for the best. Too many unknowns involved with both economies.

[WalkingOrders]

On 1/21/2020 at 4:54 PM, Isaan sailor said:

If you consider the Baht vs USD 10-year average at 32.40—today’s action is chicken feed.

Bank of Thailand is guilty of selling short term bonds (to whom remains a mystery), which brought the USD from 36 three years ago down to 30.17 today.  And it’s irrelevant that BoT has held off on bond sales.  Damage already done.

Before the China cheerleaders and Baht apologists hammer me—i’d just like to remind them that no other currency has behaved in this way vs USD.  

Go ahead and refute this, guys...

I am in neither category, but as a long time forex trader I am interested in where you are sourcing this information that baht strength is the result of short term baht bond sales.

[WalkingOrders]

On 1/21/2020 at 11:12 AM, bronzedude said:

Do these quotes represent "buying" or "selling" price? I check the on street exchange everyday, once in the morning and once in the evening and last week the "buying rate never went to 30.53. The bank rates were .20 to .30 lower. Why does Thai Visa bother to tell this to the public? It's an insignificant report. 

They quote the interbank rate of the pair. The buy sell rate is what the retail establishment you are buying or selling from is quoting. They make money on the spread which is the difference between the interbank rate and what the establishment is charging you. Each retail outlet has a different spread, although they should all be similiar. Which is why you gotta be careful and know the rates if you are standing at Thornbai's money stand, which isn't to say you wouldn't get a better rate there then at the Airport, which always sucks

 But most banks away from the airport are on the same page.

 

[WalkingOrders]

On 1/21/2020 at 9:16 PM, EricTh said:

I just read an article that claimed Bank of Thailand did manipulate the currency. It is dated 16 Jan and titled

Bank of Thailand lands in hot water

 

I am not allowed to link the Bangkok Post article as the forum bans linking.

You are misinderstanding the fundamentals discussed in this article. The interventions discussed have been to prevent the baht from climbing higher. This is normal under the circumstances. And something we should be happy about if trading foreign currency for baht. Especially dollars. The point of the article is that the central bank is running out of bullets. But with respect to the author, while all central banks play a role, they cannot simply wave a magic wand and change the exchange rate between currencies. Economic fundamentals are strongly in play here, both in Thailand and the United States. Primarily the balance of payments with regard to Thailand and the United States. Perhaps a good time for Government/industry to sell baht and buy a load of farm equipment,  and engage in long term programs to effectly incintivize the sugar cane industry to end slash and burn methods. Air pollution and baht problem tackled in one go. Or they could sit on their hands and expect the Thai central bank to somehow control the entire Thai economy.

Edited January 26, 2020 by WalkingOrders
Clarity

[Chivas]

18 hours ago, WalkingOrders said:

Showing 30.5 a significant change from the 29.65 I had not to long ago. Welcomed by me. I'm not making any bets on longterm, but I will hope for the best. Too many unknowns involved with both economies.

Now 30.68 this Monday morning