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Strong Baht Weak Baht


pdogg

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I don't get it. Could someone explain why it is that a country under sieges  currency hasn't changed 1 satang over the last week against my currency?  In fact the baht was a little weaker 6 months ago than today.

 

One possibility is that markets like certainty.  And martial law and the coup might be seen as stabilizing.

 

Another possibility is that the coup was expected by financial markets and already "priced in" months ago.  I remember near the end of last year some Thai market forecasters announced they thought there was a 50-50 chance of a coup.  To me, 50% seemed way too high but I guess those who were well versed in Thai politics could see the writing on the wall.

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  • 1 month later...

 

The Bank of Thailand is closely monitoring the strengthening of the baht, which has been caused by the return of foreign funds to the Kingdom's capital and bond markets due to improved economic and political conditions. "Thailand has had good news coming out lately, such as the forward movement of the economy, the expectation of a continuous economic recovery in the second half of the year, and the political development of the introduction of the provisional charter, along with clarity in the setting up of government agencies.

"These factors have been interpreted by foreign investors as positive news, which makes them increase their investment weighting on the country," Roong Mallikamas, spokeswoman of the central bank, said yesterday.

She said that beside the inflow of foreign funds, a reduction in the country's credit default swap (CDS) level - a measure of the risk of buying government bonds - also indicated that foreign investors were now gaining more confidence in Thailand's financial markets and economy.

The country's CDS level fell 28 basis points between May 22, when the military took power, and July 22.

Thailand's CDS level currently stands at 105.5 basis points, against 133.5 in May, while those of Malaysia and the Philippines stand at 85.3 and 88, down from 97.1 and 95.2 respectively in the same period.

Roong added while CDS levels had fallen across Asia because of increased foreign investor confidence in the region, Thailand's had reduced the most because of the improving internal situation.

She warned, however, that external factors such as markets' interpretation of major economies' fiscal and monetary policies and geopolitical risks could affect the value of the baht in either direction, or lead to an outflow of foreign funds. This makes it important for the central bank to monitor both internal and external factors closely, she explained.

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  • 3 months later...

Yes, Hefe that would be correct - only the very rich Russians will still be able to travel to Thailand for their holidays, and even they might start cutting back. With oil prices low, and Putin continuing to be aggressive, there will be no early relief for the Ruble and the Russian economy.

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I'm on my way to LOS soon and I just checked the exchange rate today for the first time in quite a while. The trip was booked in March so I'm coming regardless and just haven't bothered to check the exchange rate until there was a post in this thread today. I do feel sorry for the poor Russians. I will miss them so much... :yahoo:

 

FWIW I use to have a screen widget, that came with Windows 7, on my laptop that I set up to constatntly show the dollar/baht exchange rate. But Microsoft says their widgets are a security risk and reccomend they be removed.  

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The plunging ruble - which earlier hit all-time lows against the dollar, euro and other currencies - has forced Russians to stay at home. Year on year, Russian arrivals to Thailand tumbled 23.2 percent in November and 23.2 percent in October. For the year through Nov. 30, Russian arrivals are down 4.9 percent.

While Russians comprised just 6 percent of visitors to all of Thailand, they represent a much-larger share for Pattaya. Itthiphol indicated hotel bookings are off 40 percent due to the Russian decline.

http://www.pattayamail.com/localnews/cut-ties-with-bangkok-tours-mayor-tells-travel-agents-44145

 

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(Bloomberg) -- Thailand’s central bank may cap a rally in the baht, Southeast Asia’s best-performing currency this year, to protect exporters, according to Goldman Sachs Group Inc.

 

The baht has gained 1.6 percent against the greenback in 2015, heading for the biggest quarterly advance in two years, according to data compiled by Bloomberg. A Morgan Stanley trade-weighted index for the currency is near a 22-month high, while the balance of payments, a measure of international cash flows, moved to a surplus in January for the first time since July.

 

“The central bank is likely to be more attentive to the effect that the trade-weighted baht appreciation will have on export competitiveness,” Jonathan Sequeira, a Hong Kong-based analyst at Goldman Sachs, wrote in a report Tuesday. “Appreciation pressure will likely be mitigated by an increase in reserve accumulation over 2015.”

 

There’s a risk that the central bank will react to the currency’s strength as the nation’s exports are sensitive to movements in the trade-weighted index, with a time lag of between four to eight quarters, Sequeira said.

 

Thailand’s foreign-exchange reserves climbed to $157.3 billion last month, data compiled by Bloomberg show. Morgan Stanley’s trade-weighted baht index has risen 2.8 percent this year to 114.85 and reached 115 last month, the highest since April 2013.

Finance Minister Sommai Phasee said in February that no measures were needed on the baht and he wouldn’t put pressure on the central bank to lower borrowing costs.

 

Thailand’s balance of payments reverted to a $719 million surplus in January, from a $16 million deficit the previous month. The Bank of Thailand reported a $2.5 billion excess in the current account, part of the overall balance of payments and a fourth straight monthly surplus.

 

The balance of payments could remain in surplus by a range of $5 billion to $10 billion this year, which will likely be constructive for the baht, Sequeira said.

http://www.bloomberg.com/news/articles/2015-03-04/goldman-sachs-sees-baht-capped-by-intervention-to-shield-exports

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The BOT cut the policy rate by 0.25% today.

 

Ceteris paribus, this should weaken the baht vis a vis the major currencies. 

 

In afternoon trading, after the announcement, both the dollar and the pound strengthened against the baht.

 

The Euro continued to weaken vs the dollar.  The policy rate cut prevented the euro from weakening against the baht this afternoon.

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The BOT cut the policy rate by 0.25% today.

 

Ceteris paribus, this should weaken the baht vis a vis the major currencies. 

 

In afternoon trading, after the announcement, both the dollar and the pound strengthened against the baht.

 

The Euro continued to weaken vs the dollar.  The policy rate cut prevented the euro from weakening against the baht this afternoon.

 

Thanks for the BOT update PD. 

 

For some reason my Currency Meter on Windows 7 stopped working around a week ago, I re-installed it but no change.

 

I know I can look up rates elsewhere online but I became so used to my currency meter and going by that I'd never be no more than 0.1 away from the exchange price on the street based upon what it showed me. It's still down now, don't know why.

 

It doesn't change the fact we have to live here on more or less whatever the exchange rate is at the time, but it's always nice to see or hear of an upturn in our favour.

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  • 1 month later...

Great news for sex tourists as all major currencies advanced against the baht this afternoon after the BOT cut interest rates in a surprise announcement.

 

http://finance.yahoo.com/echarts?s=THB%3DX+Interactive#

 

 

 

BANGKOK--Thailand's central bank surprised the market with another interest-rate cut due to a slower-than-expected economic recovery.

 

The Bank of Thailand's monetary policy committee members voted 5-2 Wednesday to cut the one-day repurchase rate, the bank's benchmark interest rate, by 0.25 percentage point to 1.5%.

 

The decision comes after another surprise 0.25 percentage-point cut in March.

 

"The economic recovery appears to be recovering at a slower pace than estimated at the previous meeting," said Mathee Supapongse, the MPC secretary. "[This is] in spite of higher government budget disbursement and an improved outlook of the tourism industry which have been inadequate to offset much-weaker-than-expected exports and private consumption in the first quarter of 2015."

 

The central bank also noted that Thailand's exports face higher risks from an economic slowdown in China and lower imports by major trading partners, as well as pressure from the relatively strong Thai baht.

 

Mr. Mathee added that most members of the rate-setting committee believed policy should be relaxed further to support the economic recovery when downside risks are rising.

 

The latest rate cut was against a near-consensus call of an unchanged rate by 18 economists polled by The Wall Street Journal.

http://www.marketwatch.com/story/thailand-surprises-with-cut-in-interest-rate-2015-04-29

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Looks like pound is up to 50bth

 

 

A solid jump of around 2 Baht from 48.5 last week, almost overnight.

 

Seemingly on the back of this news which has just saved the EU a fortune:

 

Varoufakis has been sidelined after failing to reach a crucial agreement with the EU to secure billions in bail-out money.

Greece was hoping the Riga meeting would end in delivery of a €7.2 billion bail-out package. That never happened. Instead Athens is facing questions over a €2 billion wage and pensions bill and a €750 million loan repayment due in the coming weeks. The government has publicly acknowledged it may be forced to accept economic measures.

Source

 

 

Also, with any luck next week it will continue to become more favourable for the pound once the elections are over and investors have some idea which way the country is headed. Fingers crossed Labour get nowhere near.

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Wow our dollar keeps getting better was at 38(absolutely shit) when I there in March, April this year, was 36 only, a, few days ago and now at 35 (what it was last year when I was there) fuck why couldn't it have been this good when I was there

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  • 2 weeks later...

 

Kasikornbank takes the lead in cutting lending rates, being the first to do so since the Bank of Thailand slashed the policy rate by 25 basis points on April 29.After the policy rate cut in March to 1.75 per cent, only five banks acted in slashing their rates.

Before KBank, no bank took any action after the policy rate cut to 1.5 per cent in April.

http://www.nationmultimedia.com/business/KBank-helps-fulfil-central-banks-hopes-30260520.html

 

Lower interest rates in Thailand means a weaker baht. 

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if 38 is absolute shit to you maybe stay home? I've never really seen it over 33. I'd say 29 is absolute shit. I've done that. 38? I'd LOVE it. Was that a typo? I mean really. It's averaged maybe 32 from 2007 when I started going. XE.com graph can go back 10 yrs. Check it out.

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