Russian tourists and the value of the baht
It is a curious, almost naive attitude to look abroad at how exchange rates will shift there. If there is movement in relation to the exchange rate of the baht, hopefully more tourists will come to Thailand. What people themselves could do about the exchange rate of the baht, apparently does not occur to this government.
They mainly look at the British pound as well as the Russian ruble. The pound is reported to have fallen 4,9 per cent against the baht following Conservative Prime Minister Boris Johnson's landslide victory in the Brexit vote. However, this euphoria did not last long and returned to the currency market with a small difference. Currency traders hope and expect the pound to strengthen now that uncertainty over the UK's exit from the European Union has dissipated.
What about the ruble? Although a number of Russians return to Thailand after five years, it is not because of a stronger ruble. Because the ruble is still 12 percent lower since 2014. However, this month it has only risen by 1,9 percent, which cannot immediately count on a party atmosphere.
Thailand will also have to make an effort to continue to perform as a holiday destination and not only in terms of the exchange rate of the baht!
Lodewijk, the Thai central bank is indeed taking measures to dampen the exchange rate of the Baht. However, the United States sees to it that countries do not artificially lower their exchange rates because they can thus create an advantage when it comes to world trade. When Thailand goes too far, they run the risk that the US will reprimand them. So your statement that the government doesn't understand it is not entirely correct. The course of currency exchange rates is a fairly complicated matter that you cannot draw conclusions from too quickly.
Not understanding it is too hasty a conclusion, which I do not endorse!
ok, i was too fast then, sorry. But can you explain to me what one (government) can do about the exchange rate of the baht?
Presumably, the baht is artificially kept at this rate in order to obtain foreign currency relatively cheaply.
With a changing exchange rate, it will be easier to repay the various investments or loans to foreign countries because they now have more foreign currency at their disposal.
But this remains speculation as the foreign currency may also show a change.
For various foreign currency traders, the wind will be taken out of their sails if they earn less at the current baht rate.
The Thai population would have a little more to spend if the baht rate rose only 1 point to 34.5, regardless of the psychological effect.
The Thai government does not have much room for maneuver!
The rate of a currency (including the Baht) is determined on the basis of supply and demand. Any intervention by a central bank is therefore unheard of.