Strong Baht Weak Baht

[seven]

15 minutes ago, Pdoggg said:

Consumer debt has increased dramatically in Thailand in the past 20 years.  It's much easier for Thais to finance cars and motorbikes nowadays than years ago. 

Sounds like the west. People are up to their necks with mortgages, interest rates increasing every month. Banks making record profits.

Are the thais still untaxed below 15 K/month?

[Pdoggg]

Just now, seven said:

 

Are the thais still untaxed below 15 K/month?

Tax rates

The tax rates in 2023 for employment income and hire of work are as follows:

Taxable income (Baht)	Tax rate %
1-150,000	Exempt
150,001-300,000	5%
300,001-500,000	10%
500,001-750,000	15%
750,001-1,000,000	20%
1,000,001-2,000,000	25%
2,000,001-5,000,000	30%
5,000,001 and over	35%

Allowances

The amount of assessable taxable income is net of allowances:

Type of Allowance	Amount
Deductible expenses for income	50% of income (capped at 100,000 baht)
Personal allowance	60,000 baht
Spouses (with no income)	60,000 baht
Child (with income not exceeding 30,000 baht) (Under 20 years of age, regardless of whether he is studying; or under 25 years of age, but he must be studying at a university, either in Thailand or abroad. There is no limit on the number of natural children that can be claimed, but there is a limit of three when claiming adopted children.)	30,000 baht per child
Second child born from 2018 onwards (Same criteria as for “Child Allowance” above)	60,000 baht per child
Health insurance premiums paid by the taxpayer*	Amount actually paid, but not exceeding 25,000 baht
Life insurance premiums paid by the taxpayer*	Amount actually paid, but not exceeding 100,000 baht
Provident Fund contributions (PVF) **	Up to a maximum of 500,000 baht, but not exceeding 15% of income
Retirement mutual fund (RMF) **	Up to a maximum of 500,000 baht, but not exceeding 30% of income
Super Saving Fund (SSF) **	Up to a maximum of 200,000 baht, but not exceeding 30% of income
Home mortgage interest	Amount actually paid, but not exceeding 100,000 baht
Charitable contributions	Amount actually donated, but not exceeding 10% of income after standard deductions and allowances. There is a double deduction allowed for donations to educational organizations, but not exceeding 10% of income.

 

[Pdoggg]

The newly elected president of Argentina wants to abolish their central bank and make the US Dollar the official currency.

[seven]

3 hours ago, Pdoggg said:

The newly elected president of Argentina wants to abolish their central bank and make the US Dollar the official currency.

And make organ trafficking legal. Its Donnie 2.0.

[Rom]

2 hours ago, Pdoggg said:

The newly elected president of Argentina wants to abolish their central bank and make the US Dollar the official currency.

Argentina can adopt the USD but cannot abolish most central bank functions such as reserves management, banking supervision, liquidity provision to banks, economic modeling and research.  Likely they will just rename the central bank "Monetary Authority" or something like that and are in for a brutal public finances shock if they adopt the USD cold turkey at a rate that guarantees full conversion of existing balances in national currency.

[Pdoggg]

Why the Thai Baht Is Defying Economic Gravity

On its current trajectory, the Thai baht is expected to record its biggest annual gain in six years against the US dollar, creating a headache for newly appointed Prime Minister Anutin Charnvirakul’s government.

The rally has already pushed the baht to a four-year high against the dollar in September — and at first glance, the surge is puzzling. Thailand’s economy is far from stellar, weighed down by a 19% US tariff, sluggish tourism, high household debt and, ironically, the strength of its own currency.

The currency has rallied some 5% against the dollar since US President Donald Trump’s so-called Liberation Day tariff announcement, outperforming most Southeast Asian peers, including the Singaporean dollar and Indonesian rupiah.

Why is the Thai baht so strong?
Thailand’s currency began to strengthen against the US dollar in mid-2024, around the same time the government launched an economic stimulus plan, tourism rebounded, and traders started selling the dollar ahead of the US Federal Reserve’s cycle of interest rate cuts.

Recent gains, however, are more reflective of the current weakness in the US dollar, spurred by concerns over President Trump’s trade war and its pressure on the US economy, as well as fiscal largesse. That, in turn, has prompted investors to dump US assets as questions arose over the dollar’s traditional role as a reserve currency.

Trump’s tariffs have also, more directly, aided the baht’s gains. Thailand’s current account surplus — a measure of how much its exports and foreign income exceed what it sends overseas — had already reached $13 billion as of August, well above the Bank of Thailand’s full-year forecast of $11 billion. Much of this was driven by stronger-than-expected exports, such as cars, shipped early in the year ahead of impending US tariffs.

The baht has also benefited in another way: while the US imposed a 19% duty on imported goods from Thailand, the country has attracted manufacturers seeking to sidestep the even steeper 30% levy placed on many Chinese products by building factories there. Foreign and domestic investment proposals — including new plans in digital, electrical and rail infrastructure projects — for Thailand reached $32.5 billion in the first half of 2025, up 139% from a year earlier.

Most intriguing, perhaps, is that the value of the baht has been influenced by the price of gold, which has surged nearly 50% this year as investors offloaded US assets in favor of alternatives, including the safe-haven metal. The 30-day correlation between gold and the baht climbed to 0.88 in June, the highest in almost three years. A near 70% surge in Thailand’s gold exports to 254 billion baht in the first seven months of the year also led to a surge in dollar inflows, boosting the local currency further.

What do gold prices have to do with the baht?
Gold holds deep cultural and financial significance in Thailand, where it’s widely used as a savings vehicle, a religious offering, and a store of wealth passed down through generations. Thai households and investors play an outsized role in bullion trading, making the country one of the top 10 gold markets in the world. When gold prices rise — as they have this year — traders sell holdings and convert the proceeds into the local currency, which in turn strengthens the baht. In 2024, demand for gold rose 13% in Thailand, the only country to notch four straight years of growth during the Covid-19 pandemic, according to YLG Bullion International, citing World Gold Council data.

What’s the problem with a strong baht?
Exporters were already feeling the pinch from new US tariffs, and now the strength of the baht — which makes Thai goods more expensive abroad — is putting more pressure on the sector. In August, the country’s exports grew at the slowest pace in almost a year, according to data from the Commerce Ministry.

Tourism is also suffering, as Thailand loses its appeal as a value-for-money destination. Between Jan. 1 and Sept. 28, foreign tourist arrivals dropped 7.5% compared with the same period in 2024. Chinese tourists in particular are shunning Thailand in favor of cheaper alternatives such as Vietnam and Malaysia — a trend also driven by safety concerns following a high-profile kidnapping earlier this year.

For Thai households, a stronger baht can make imported goods — such as fuel and consumer electronics — cheaper, helping to ease inflation. But for an economy that relies heavily on selling goods abroad and tourism, the downsides outweigh the benefits.

Is the Thai government concerned?
After meeting with industry leaders in early September, Anutin said his administration would urgently address concerns over the baht’s rise.

In late September, Fitch Ratings cut Thailand’s credit outlook to negative, citing mounting fiscal risks from prolonged political uncertainty and weak growth prospects. That followed a similar move from Moody’s, adding to the urgency for Anutin to act on the baht and revive a sluggish economy.

What measures are being considered?
The government faces a delicate balancing act: preventing the baht’s gains from derailing an already fragile recovery while avoiding actions that could be interpreted as deliberate weakening.

For now, officials have limited direct intervention in the currency market to ease what they say is excessive volatility. The Bank of Thailand has signaled that it prefers to let the baht be driven by fundamentals — such as the current account balance, interest-rate differentials and economic growth — while retaining the option to step in if volatility becomes excessive.

They haven’t been entirely hands-off. Thailand’s attempts to push back against the baht’s surge have been enough to help push foreign exchange reserves to a record of $272.3 billion as of Sept. 19, equivalent to around half of gross domestic product.

But more aggressive intervention would risk drawing the ire of US Treasury officials, who could in turn designate Thailand a currency manipulator — a label that carries the threat of trade sanctions and would deal another blow to the country’s export sector.

Thailand’s central bank is also in talks with gold traders to explore ways to curb the metal’s outsized influence on the baht. One option is to promote more gold transactions settled in US dollars through online platforms, which could reduce the direct link between bullion flows and the Thai currency.

Another measure under consideration is a tax on physical gold trading. However, officials caution that such a step would take time and require detailed studies and consultations with industry stakeholders.

Even just the government’s jawboning, however, appears to be having an impact. After officials announced in mid-September the establishment of a working group to address the strong baht, the currency weakened over the subsequent two weeks by 2% against the dollar to underperform most Asian peers. Meanwhile, the 30-day correlation between gold and the baht slipped to 0.5 in September, its lowest level since July.

https://www.bloomberg.com/news/articles/2025-10-03/thb-usd-how-are-trump-s-tariffs-gold-affecting-the-thai-baht

 

 

[Woodie]

On 10/4/2025 at 4:44 AM, Pdoggg said:

its lowest level since July.

My upcoming trip in mid November has shown up some trends. 

I booked flights room etc when I first planned the trip about 6 weeks ago. Since then I have revised some dates and extended it by a few days. The costs of the rooms and flights have doubled!

Six weeks out and I had to bite the bullet and forgo my return flight. No refund. Am I mad? Probably, but I cant see me making another trip for some time, so on we go.

To give you an example, my homeward flight, BKK to Aussie, went from $460 AUD to $860. Both with Singapore which is my preferred airline. There was no way I wanted to pay $860 so booked on my favorite,( my attempt at a joke),  airline, Jetstar. The condo in BKK has gone up by 100%!. The extra days are being taken up in Chiangmai.(hopefully worth it)! Even the flight from BKK to Chiangmai has gone up from $70.00 to $105.00! I realize that even at the increased price it is a good deal. But if they could make a profit at $70.00 they are doing well at $105.00. Aren't airfares one of the mysteries of life, along with the value of the Thai baht.

Just by chance I watched a video this morning where a Thai gov guy was giving a rundown on the countries economy. He was not exactly jumping for joy about it!