The Mighty Strength Of Thai Baht?! Explain

[jumnien]

Can someone post the export income from Thailand by year for the last ten years. I think a lot would become self-evident to most here.

Thai Exports

Lot's of people should spend some time looking at the various reports there, might give them some insight they don't get from a barstool on Suk or a English classroom.

TH

Good post and useful data, I looked for something similar a few days ago but couldn't find anything easily, obviously didn't look hard enough.

It's interesting to see how little Thai exports to the USA have grown over the last 8 years compared to Thai exports to other countries. Perhaps with the USA economy in the tank Americans will increase their buying of cheap Asian exports over European goods.

[chiang mai]

Can someone post the export income from Thailand by year for the last ten years. I think a lot would become self-evident to most here.

Thai Exports

Lot's of people should spend some time looking at the various reports there, might give them some insight they don't get from a barstool on Suk or a English classroom.

TH

Good post and useful data, I looked for something similar a few days ago but couldn't find anything easily, obviously didn't look hard enough.

It's interesting to see how little Thai exports to the USA have grown over the last 8 years compared to Thai exports to other countries. Perhaps with the USA economy in the tank Americans will increase their buying of cheap Asian exports over European goods.

I believe that the US is already doing more than its fair share of buying cheap Asian exports from China and that in itself is a part of the overall problem. But I also was surprised at the makeup of Thai exports and the destination countries, don't know why I should have been so because it only makes sense that Thailand would conduct significant trade with its regional and near neighbors.

[flying]

Well one export, Rice should continue to do fine.

And chicken

And don't forget the latex production. As nobody will be able to afford kids, the demand for condoms must rise....

I will continue to do my best and increase my consumption of beer.

When I asked my wife what would you say is Thailands biggest exports textiles or rice? She said Thai ladies

I was then going to say yeah but that doesn't help............Then I thought hmmmm & just nodded my head

[bobble]

I have been living in Thailand for past 5 years and now i am beyond puzzled.

Can anyone please explain how thai baht remain sooooo strong?

I understand that Thai baht is measured compared to USD, Fine, so AUD, POUND, EURO, YEN and all other currency's have lost against USD-but not the Thai baht.

What is keeping it strong? Sex tourism-NO, Tourism-NO, Investment-NO,Manufacturing-NO, Exports-NO

Even funnier, during the airport closure thai baht got stronger.

I have studied business, and consider myself a fairly smart man, but i am just unable to wrap my head around the stength of Thai Baht

Any ideas?

[bobble]

how can you say the Thai Bht is strong I measure the THB against the UK pound. I put a deposit on a house in Hua Hin in June 2008 at 65bht to the pound now its 47.84 that means my payments in uk pounds has gone up from £2000 a month to £2800. that is another £800. extra that I have to find each month.

[Naam]

how can you say the Thai Bht is strong I measure the THB against the UK pound. I put a deposit on a house in Hua Hin in June 2008 at 65bht to the pound now its 47.84 that means my payments in uk pounds has gone up from £2000 a month to £2800. that is another £800. extra that I have to find each month.

does that mean you consider the Baht weak??

[BeauKarl]

how can you say the Thai Bht is strong I measure the THB against the UK pound. I put a deposit on a house in Hua Hin in June 2008 at 65bht to the pound now its 47.84 that means my payments in uk pounds has gone up from £2000 a month to £2800. that is another £800. extra that I have to find each month.

Have you actually read your post?

[Naam]

how can you say the Thai Bht is strong I measure the THB against the UK pound. I put a deposit on a house in Hua Hin in June 2008 at 65bht to the pound now its 47.84 that means my payments in uk pounds has gone up from £2000 a month to £2800. that is another £800. extra that I have to find each month.

Have you actually read your post?

a newbie late at night. let us be lenient

[jdrake72]

I too have been surprised by the strength of THB. Sitting here, the problems that should cause some weakening, seem so real. However, I think there are a few reasons why THB has failed to fall against most currencies and in particular USD.

Firstly, Thailand, along with several (not all) Asian countries has not suffered a huge deterioration in the health of it's banks. I am sure there is some deterioration in credit quality of the Thai bank loan books, but not to the extent of the US, UK, Icelandic, Eurozone banks. So prima facie, there is no need for a huge devaluation to take place.

Secondly, yes growth rates have slowed, will slow more, may be negative, but in comparison to some major developed economies, the Thai economy is doing OK in relative terms. Also compare to S Korea and Singapore, Thailand is doing ok in relative terms, for example.

Thirdly, the political issues that I personally thought would cause some weakness, did not do so. In hind sight, I think most long term investors in the Thai economy are used to such issues and looked past them.

Fourthly, I do not know, but suspect that there must be some small supporting action by BOT for THB, as and when it might be needed. My assumption is the BOT does not want THB to be weak otherwise hedge funds might smell blood and start to try and force THB much lower.

Fithly, The previous action by BOT to introduce exchange controls, drove away a lot of THB holders who have not come back. Those that remain are in THB for the longer term and short term speculators are scared of exchange controls being tightened again. So THB is not in play.

Summery, whether THB does eventually start to fall depends on how well the economy does against other economies. For sure Thailand's economy will deteriorate, but so will others. Just look at S Korea and Singapore. So if Thailands economy slows, but at a lower rate than others, the currency may well not lose much ground, if any.

To add a couple of other pieces to the picture: The amounts that BOT are spending on selling USD to keep the Baht high(er) appear to be negligible and the rate of spend appears to suggest they want a managed (slow) devaluation of their currency and that is sensible - as others have pointed out recently it doesn't cost the BOT very much to manipulate a currency such as the Baht. Also, over 50% of Thai exports are to countries in the region thus their export markets are not as "at risk" from the current economic woes of the West.

please explain WEHICH SLOW DEVALUATION ??

Thai Baht is rising like crazy against almost all the currencies in the world, it has risen more than 3% against teh USD dollar since early December, it is rising like crazy against the euro,pounds, almost all asian currencies (Except the yen) and all african and south american currencies.

Of about 150 world currencies, tha Baht is up between 2% and 30% against all but 2 (japanese yen and swiss franc).

Thai economy is going to crush, virtually all of the companies based on exports are going to bankrupcy and I can tell you in the sectors where I work (jewelry, textile) many companies have closed already and virtually 100% of them ared closing to bankrupcy, global slow demand is already a problem, but the real cause is the Baht. You will see in few months if Baht keeps rising like crazy like in the past 2 months, the 1997 crisis will be a joke compared to what will come...unemployment will skyrocket.

[jdrake72]

Anyway, can anybody explain me why every week there is a new thread regarding the Thai Baht ?

Naam is right, it seems a real obsession, anyway, ONE thread is enough, there is no need to open multiple threads regarding the same topic.

Today

http://www.scb.co.th/html/exchange/bk-txtexchange.htm

34.44 per $

44.41 per euro

December 1st 2008

http://www.scb.co.th/html/exchange/01122008_153500.htm

35.35 per $

44.55 per euro

So if the THB is following the USD, anybody can explain me why when USD is weak versus the euro, is plunging against the Baht too, but while the USD is strongst against the euro, the THB doesn t move and the euro is plunging against the baht.

So, at the end, the baht is always rising like crazy, if you put a basket of currencies including major currencies, developing countries currencies, the THB is rising at a monstruos pace. Measured Devaluation ??? May I laugh ? Which devaluation ?

3% rise in 6 weeks against the USD and you talk about devaluation...somebody has to study mathematics :-)

Edited January 23, 2009 by jdrake72

[jdrake72]

actually the THB IS RISISNG AGAINST THE YEN TOO !

1 December 2008: 36.98 yen for 1 Baht

http://www.scb.co.th/html/exchange/01122008_153500.htm

Today (7 weeks later):38.43 yen for 1 THB

Yes, there is one currency in the world which is rising even against a an amazing rising yen: that's the THB, which is rising brutally against all the world currencies except just one: the swiss franc.

All this despite dire economy, exports nosediving, political turmoils, a judicialry copu d etate, investment stalled, very low interest rates, twin deficits,

downgrading of Standard and Poors and Moody's for the country risk, etc etc...

If anybody thinks that s makes sense... the day THB will fall ,it is more and more likely it will be a crush.

Today, no doubts it is by far the most overvalued currency in the world. Just look at the facts, look at the links, look at the statistics.

[bravingbangkok]

If they think the reserves will out last the storm then they are so so so so wrong, Devalue it now and get the British and European tourists back.

By waiving tourist visa fees and cutting flights by 50% they are trying to swing tourists back, at 47 baht to the pound good luck !

[Lite Beer]

insensitive post deleted.

[Naam]

actually the THB IS RISISNG AGAINST THE YEN TOO !

Yes, there is one currency in the world which is rising even against a an amazing rising yen: that's the THB, which is rising brutally against all the world currencies except just one: the swiss franc.

i don't consider an appreciation of 4% over a period of two years "brutal".

january 23, 2007 / 1 EUR = 46.37 Baht

january 23, 2009 / 1 EUR = 44.52 Baht

and the claim "rising vs. ¥EN" does not apply at all.

jan 23, 2008 / 100 ¥EN = 30.99 Baht

jan 23, 2009 / 100 ¥EN = 39.11 Baht = Baht depreciation of >30% respectively ~25% depending which reference value is taken for the percentage calculation.

looking at a short period nearly always distorts the picture.

[Naam]

"Look at the exports data for december...Thailand -12,5 %..." for the entire year, there are up almost 16% year-over-year

german and japanese exporters would jump with joy if they had achieved thai results in 2008!

[GuestHouse]

Right now the BBC is giving the GBP?Bht rate as 47.53 a Bht1 to the pound drop in the past couple of hours.

[chiang mai]

If they think the reserves will out last the storm then they are so so so so wrong, Devalue it now and get the British and European tourists back.

By waiving tourist visa fees and cutting flights by 50% they are trying to swing tourists back, at 47 baht to the pound good luck !

With reserves of over USD 110 bill, greater than those of the UK (USD65 bill), why do you think they will not last a while?

Also, tourism only represents around 7% of GDP and European and British tourism a fraction of that, why would Thailand really care?

[spuey]

hi

well i have just bit the bullet and trasferred enough cash to last me for 3 months, transferred it 1 hour ago, got 45.75 to the pound...

had no option..its all bad news from the uk...i dont claim to know alot about the economy, but if its gone to 45-46...then it could go below 40 and so on...

maybe the wrong move, sterling may recover all more likely the baht might crash...who knows...? you can only make your desicions and live by them.

[chiang mai]

If they think the reserves will out last the storm then they are so so so so wrong, Devalue it now and get the British and European tourists back.

By waiving tourist visa fees and cutting flights by 50% they are trying to swing tourists back, at 47 baht to the pound good luck !

With reserves of over USD 110 bill, greater than those of the UK (USD65 bill), why do you think they will not last a while?

Also, tourism only represents around 7% of GDP and European and British tourism a fraction of that, why would Thailand really care?

Oopps, seems that it's much less than that if you factor out the liabilities, only USD28 billion in the Bank, makes Thailand look pretty good.

http://www.bankofengland.co.uk/statistics/...ves/summary.htm

[bravingbangkok]

If they think the reserves will out last the storm then they are so so so so wrong, Devalue it now and get the British and European tourists back.

By waiving tourist visa fees and cutting flights by 50% they are trying to swing tourists back, at 47 baht to the pound good luck !

With reserves of over USD 110 bill, greater than those of the UK (USD65 bill), why do you think they will not last a while?

Also, tourism only represents around 7% of GDP and European and British tourism a fraction of that, why would Thailand really care?

Oopps, seems that it's much less than that if you factor out the liabilities, only USD28 billion in the Bank, makes Thailand look pretty good.

http://www.bankofengland.co.uk/statistics/...ves/summary.htm

Does Thailand have any Foreign debt ?

Last time I cheked it was around 59 000 mil$, That was a couple of years ago though so they might of cut it by quite a lot.

Edited January 26, 2009 by bravingbangkok

[12DrinkMore]

I get the feeling that the Baht is right at the level the market thinks it should be, and not what TV members would like it to be! :jerk:

- Strong banking system

- Trading surplus

- Huge foreign reserves

- Flexible workforce

- A modern manufacturing industry producing goods to western standards at Asian prices

- Great scenery, from mountains to islands

- Lots of food

- Great climate

- Happy smiling people

- But above all an economy run by the Chinese.

Wherever they go the Chinese make money and invest for the long term future.

With all these assets here in Thailand and compare them to what you have in the UK run by Brown and the City for short term gain, it seems pretty obvious which way things will go.

IT'S A NON CONTEST!

:D

Just wait until the GBP hits 6 Baht and then the Thais will be off to wonder at the once great Almighty Blighty, look a Brighton, Manchester, complain about the beggars on the streets and in the underground, oogle at the Houses of Parliament and make donations to Westminster Abbey, sample the great British cuisine, fish&chips, drink the warm beer.

And then come back to the SUVs in the rice fields and ask themselves, "why did we go, should have stayed at home"!

:D

And really, maybe it could all come true? Give me a reason why not.

Edited January 26, 2009 by 12DrinkMore

[cclub75]

- Trading surplus

No, you're wrong :

http://thaicrisis.wordpress.com/2008/11/03...arter-until-q3/

http://thaicrisis.wordpress.com/2009/01/25...-trade-deficit/

However I agree with the rest of your list.

I would like to add other items : "informal economy" or "grey" or "black economy"... It's certainly a HUGE cushion for Thailand.

So overall, yes Thailand has very good cards in its hands.

But... but... do not underestimate the biggest liability actually... the political risks...

Everything is possible. Philippines were one of the richest countries in SEA... 40 years ago...

[DJGREEN1980]

hi

well i have just bit the bullet and trasferred enough cash to last me for 3 months, transferred it 1 hour ago, got 45.75 to the pound...

had no option..its all bad news from the uk...i dont claim to know alot about the economy, but if its gone to 45-46...then it could go below 40 and so on...

maybe the wrong move, sterling may recover all more likely the baht might crash...who knows...? you can only make your desicions and live by them.

At 21:30 its currently hovering just under 49 Bht - 1 GBP. I'm expecting it to hit 51, possibly 52 by the end of the week. Alot of the bad news has been from the UK this last week and I think the attention will start to turn towards Europe or the US now. The media certainly do not help situations and make things alot worse by scaring people!!

[12DrinkMore]

No, you're wrong :

http://thaicrisis.wordpress.com/2008/11/03...arter-until-q3/

http://thaicrisis.wordpress.com/2009/01/25...-trade-deficit/

That guy running "thaicrisis" has been on a mission for a long time. I think he spends too much time looking for bad news and no time at all looking for positive stories. Maybe it is true, but a massive swing "(in september) a surplus of 142 millions USD, after a deficit of 675 millions in august" is very strange. He bases a lot on the official Thai figures, and I wonder just how accurate they are and based on whose input?

I would like to add other items : "informal economy" or "grey" or "black economy"... It's certainly a HUGE cushion for Thailand.

Thanks I missed that one entirely.

But... but... do not underestimate the biggest liability actually... the political risks...

Yes, but the thirty odd families who own most of Thailand's economy are all very keen not to upset the nice little earner that they are on. Sure there will be a bit of bickering and arguments, but at the end, NONE of them are going to allow what happened in the West, where the bankers and governments through selfish greed and using nebulous financial instruments have made the banks and the country insolvent.

It is all very well organised in Thailand, who gets what and how it works. They are not stupid and now that they have seen what has happened in the west, do you think they are not analysing and learning from it?

The Philippines is a totally different kettle of fish.

[cclub75]

That guy running "thaicrisis" has been on a mission for a long time. I think he spends too much time looking for bad news and no time at all looking for positive stories. Maybe it is true, but a massive swing "(in september) a surplus of 142 millions USD, after a deficit of 675 millions in august" is very strange. He bases a lot on the official Thai figures, and I wonder just how accurate they are and based on whose input?

Well okay... but it's easy to check.

By the way, trade is one thing... but what about net services, income ?

And a quick look on the Bank Of Thailand website (document EC_XT_011) shows that since april we are in negative territory...

Anyway, as I said, the official figures are one thing (and are good for international comparisons) but they don't show the informal economy. Which must be... large in Thailand. And that point could be a life-saving jacket for the country during harsh times.

Edited January 26, 2009 by cclub75