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Strong Baht Weak Baht


pdogg

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  • 2 weeks later...
3 hours ago, duke007 said:

Just wandering if pre 2016 Thai bank notes are still egible? :unsure:

Hopefully they don't try this in Thailand. It was done in India in 2016 and caused huge problems, as the BJP (current) government gave a 45 day notice that circulating 500 and 1000 Rupee notes were going to be invalidated. People had to exchange the old notes for the new ones by the deadline or those would be worthless. Unfortunately those notes were 80% of the money in circulation. There were shortages of the new bills with long queues of people wanting to change their notes. The aim of this was to eliminate or reduce "black" money that was earned without taxation, counterfeit bills, and other illegal activities. Unfortunately that goal was not achieved as 99.3% of old notes were deposited/exchanged in the banking system.

Also as the new boss is not so popular, there would likely be a lot of resistance from the population to totally eliminate the old notes suddenly, rather than use the regular process where banks will pick out notes too damaged for ongoing circulation and send them for destruction.

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  • 3 weeks later...

If you are an American reporting your Thai bank interest to the IRS, the exchange rate to use for 2019 is 31.032 baht to the dollar.  Here is a list for other countries if you are an American and earned interest in other foreign accounts and also a list for years prior to 2019.

https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates

  

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  • 2 weeks later...
1 hour ago, Quietguy said:

From the above article:   This is a big move:

Quote

The current account surplus in March dropped sharply to $700 million compared to surplus of $5.4 billion in February

How about this number

Quote

Tourism is usually the largest source of current account surplus.  However, the number of tourists dropped 76.4 percent in March and is expected to drop down to 99 percent in April,

 

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55 minutes ago, ronery said:

will a minimum wage of $15 affect exchange rate?

All other things being equal, I think a higher minimum wage is a bit inflationary which would weaken the dollar ever so slightly.  However, a stimulus package or the weapons in the Fed toolbox have a much more pronounced effect on the dollar than minimum wage legislation. 

 

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  • 1 month later...
  • 4 weeks later...
Quote

BANGKOK -- The Thai baht was the worst performer among commonly traded Southeast Asian currencies during the first quarter, as its fundamentals were eroded due to lack of tourist spending.

The baht depreciated 4% against the U.S. dollar to 31.24, according to Refinitiv data. The fall stood out from regional peers, which also were in decline.

On Wednesday, the baht reached the cheapest level in roughly half a year.

The kingdom's weakening fundamentals led to the drop. Thailand's current account turned to a deficit of $1.4 billion in the fourth quarter of 2020 from a surplus of $6.6 billion in the third quarter and $11.5 billion in the same period in the previous year. It was the first time Southeast Asia's second largest economy has recorded a deficit since the third quarter of 2014, according to the Bank of Thailand.

Service receipts from tourists plunged to $742 million, only 5% of the same period a year ago, because of border closures in response to the coronavirus pandemic.

Previously, Thailand's stable current account surplus, backed by steady tourist inflow, supported the currency.

Starting April, Thailand will shorten its mandatory quarantine from 14 days to 10 days to revive tourist inflow and spending. The government also will conduct a "sandbox experiment" at Phuket island to welcome tourists without any isolation period.

However, uncertainties remain. "Exporters and importers, as well as investors, are still unsure if the government's effort will salvage the economy," said a sales trader from a commercial bank.

https://asia.nikkei.com/Business/Markets/Thai-baht-is-worst-performing-currency-in-Southeast-Asia

 

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10 hours ago, Pdoggg said:

BANGKOK -- The Thai baht was the worst performer among commonly traded Southeast Asian currencies during the first quarter, as its fundamentals were eroded due to lack of tourist spending.

The £ has also enjoyed the best part of a 10% rise in exchange against the Baht since the beginning of the year. I can't say I'll be shedding any tears for Thailand for the depletion of their substantial surplus. I find it quite heart-warming to read there's now a deficit as it may assist in bringing their flip-flops back down to earth.

Reducing quarantine from 14 to 10 days is barely a feeble hobble in the right direction. Any length of mandatory quarantine is too much for the majority, I would suspect. The biggest impact will come when it is reduced to zero, assuming people still have the desire to travel internationally and to travel to Thailand.

I can't help but think the income from tourism is vastly underestimated in Thailand. So much money changes hands between foreigners and Thais which never gets detected.

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  • 2 months later...

Baht is at a 9 month low against the USD.  Bank of Thailand meets Wednesday and if as expected there is no rate hike then the baht should continue to depreciate.  Given how weak the Thai economy is right now, it is doubtful that the BOT will raise interest rates.

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On 4/3/2021 at 2:17 AM, dixon cox said:

I can't help but think the income from tourism is vastly underestimated in Thailand. So much money changes hands between foreigners and Thais which never gets detected.

I agree.

The baht continues to depreciate and next week the 32 baht/USD threshold should be breached.

In the analysis below all scenarios show GDP growth in both 2021 and 2022.  But boots on the ground see the economy contracting.  Perhaps the chart below is Garbage In Garbage Out.   

thaigdp.jpeg

Furthermore international tourist arrivals must have an enormous impact on demand for the baht.  Even the Base Case scenario shows just slightly more than 1 million 2021 arrivals (there were 40 million in 2019).

I think it is apparent than the economy is in the shitter and the demand for baht anemic.

Note that sometimes when you look at the baht vs your home currency it's not clear without further research if the movement is due to the baht or your home currency.   But recently the baht has been depreciating against all major currencies.

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Suspect the baht will continue to slide.  The economy is in the crapper and tourists are not coming back en masse anytime soon.  The head of FX trading at HSBC said that he Thai baht is very sensitive to current account flows and tourism flow.

baht69.png

 

 

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The baht keeps falling and at this writing one can get 32.34 baht per dollar.

I suspect this largely due to Covid. Recent talk revolves around lockdowns, lack of hospital beds, slow vaccine rollout, and the fast spreading delta variant. 

Fair chance someone you know in Thailand will die of Covid in the next few months.

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On 7/7/2021 at 10:29 PM, Pdoggg said:

Fair chance someone you know in Thailand will die of Covid in the next few months.

quite the most scaremongering post i've seen from you lockdown, closedown, shut down, watch the world starve adherents.

it's got me worried PD... i only know about 10 people.... and you're one of them.... grab one of QGs old hazmat suits... better be on the safe side...!

:drinks:

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It is PD's opinion - but I think there is a good chance he is right. Thailand is performing poorly in getting its population vaccinated, and what is worse is they will be using the Sinovac/Sinopharm vaccines for a significant % of that. If they were using Astra Zeneca/Pfizer/Moderna/Johnson & Johnson, etc I would think he would be overly pessimistic.

Since Thailand started late ordering vaccines due to their success in keeping numbers low in the earlier waves, the government became complacent probably feeling vaccinations might not be necessary. The delta variant is proving them wrong. One only has to read about what has happened in India, and what is happening in Indonesia, Malaysia and Myanmar to see what the worse case scenarios could be. Hospital ICUs overflowing, insufficient oxygen supplies, overflowing morgues - that is not being alarmist, that is reality in countries that could not flatten the curve.

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7 hours ago, blind boy grunt said:

it's got me worried PD... i only know about 10 people.... and you're one of them.... grab one of QGs old hazmat suits... better be on the safe side...!

:drinks:

On April 9th, the last night bars were open, I was at a gogo with sweet smelling girls grinding up against me.  Great fun!  Perhaps foolish but I took the risk and survived.  At that time there were less than 100 Covid deaths in Thailand.  I thought riding my motobike was riskier than Covid.  

Perhaps a good analogy is the little boy who cried wolf.   Throughout 2020 we were told that times were dangerous but lots of farang were drinking elbow to elbow with their mates and swapping spit with new sex partners.  And they too survived quite merrily!  

But when the facts change so does my opinion.

Despite being almost nonexistent on April 9th, there are now over 2500 Covid deaths in Thailand, about a 2500% increase in the last 3 months.  By the end of this month deaths could breach 5000.   But since the boy cried wolf too many times in 2020, many people in Thailand just ignore the boy's cry and the Covid Wolf might have a tasty dinner.  I don't want to be the wolf's dinner. 

So what I'm doing is looking for ways to modify my behaviour that work for me so that I'm a little bit safer than before.   

I'm lucky, there's not much I have to do so I can pretty easily avoid excessive contact with people.   No contact; no Covid.  Extremely limited contact; relatively low risk.

 

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3 minutes ago, Pdoggg said:

I'm lucky, there's not much I have to do so I can pretty easily avoid excessive contact with people.   No contact; no Covid.  Extremely limited contact; relatively low risk.

well yes. Same for me P.D... it's now 20 weeks since i've been immobile with this tendon rupture, other than a couple of coffees now and again with you [in the early days before you went into panic mode] and also quinn and soihound, until last weekend when the girlfriend picked me up outside my place and drove me to her house in Bangkok...i've never been out. Not i hasten to say because of fear of corona, but simply because i can't walk.

So, the moral of this story is..... if ya don't want to risk covid... rupture your achilles tendon !

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1 hour ago, Pdoggg said:

I'm lucky, there's not much I have to do so I can pretty easily avoid excessive contact with people.   No contact; no Covid.  Extremely limited contact; relatively low risk.

Here's the latest figures and updates for you Pdoggg

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