Thai Baht depreciation, good news for expats!
The Thai Baht is falling and that is good news for many expats. The decline has started because the Central Bank of Thailand no longer supports the currency, the exchange rate of the Baht has been kept artificially high for some time, partly by limiting capital flows from abroad.
The Bank of Thailand (BOT) surprised financial markets last week by cutting its key interest rate by 25 basis points to 1,5 percent. The main reason for this was the persistently high exchange rate of the Baht. The BOT also hopes to boost Thailand's ailing economy with this. The disappointing growth in the number of foreign tourists, disinflation and lagging exports call for a number of firm measures. The weakening of the rate of the Baht is a logical consequence of this.
According to Deputy Prime Minister Pridiyathorn Devakula, the depreciation of the Baht may continue for a while. Partly because the Bank of Thailand now allows more capital flows to Thailand. “The measures create more balance between buying and selling. We are already seeing the Baht fall, but that can continue because the measures that were recently announced will have an effect for a while,” the deputy prime minister said.
Source: CNBC www.cnbc.com/id/102647724
In my opinion, the recovery of the euro in the last 3 weeks has had a much greater impact on the euro/baht ratio than the intervention of the BOT. We'll see how far it goes. Only a large one
lower baht can still save Thailand….
It is called a low-wage country and benefits from an increase in exports. More expensive imports affect the middle and upper classes and they will manage. Whether the tourists return as 'big spenders' remains to be seen.
The dollar/baht ratio was recently around 32.5 and is now 33.5. Things are going in the right direction!
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Politics' (..)
They saw their income from export pass them by.
Buyers fled to neighboring countries, leaving expensive Thailand as it was.
Holidaymakers avoided the land of smiles, and Thailand soon lost its smile.
Yes', the Bath was kept artificially high, by a handful of Elite'
My expectations are that he will be back to 45 soon.”
Pieter
As a tourist I only know one thing and that was that for every 1 euros I get 100 euros less than last year at this time. Should I be happy about that??? Beer is now 25 cents more expensive (at 70 bht). Hotel is also considerably more expensive pppffffffff bad for tourism I would say.
I don't know how you calculate, Ton, but 25 euros less on every 100 euros compared to a year ago seems rather exaggerated. The price on May 10 last year averaged 44,90, while yesterday - one year later - it was 37,48.
It is good for Thailand and its visitors that the rate of Thai Bath has changed, but in my opinion it is not enough because Thailand remains expensive if you compare it with surrounding countries. You see that large companies are increasingly moving to other countries, such as Vietnam. The large private debts also limit the ability of the average Thai to make the economy run faster and I think that if the ASEAN market (including labor) ) opens, it may also become more difficult for Thailand. I think that is why the price is coming under even more pressure and of course it is also important how strong the Euro remains.
Richard is right the dollar 1,06 baht 34,9 now dollar 1,12 is almost + 6% the baht now 37,6 is almost 6% so no impact from lower interest rates or large capital flows. As always, the authorities justify everything with exaggerated expectations or estimates that never materialize. See also the latest reports about the 3 highways that would be built, including the one from Pattaya to Rayong, again postponed due to lack of money. No one wants to invest or lend to the government. Planning enough but realizing it? Now look what is happening in the south: Human trafficking is called it with mainly government officials at the helm. And that is only now being discovered? Corruption everywhere. That is also why everyone benefits from a high exchange rate; after all, it keeps the poor poor. I think it is false hope for now that depreciation until the real estate market really collapses, but that will take another 2 years I estimate.
For the time being I only see that the THB is still neatly following the footsteps of the dollar. Was also a bit more expensive today, just like the dollar. I think they should use a bit more heavy artillery, raising the minimum wage to 360 (!) baht p / d is not going to help either.
Thailand is way too expensive and not competitive to its neighbours. They cannot sell the rice and the rubber on the paving stones on the world market.
I will not take another deep breath until the THB is above 40 for 1 euro, and preferably even more. Fortunately, I made a large change last year, we can continue for a few years, but it is not really attractive for newcomer retirees.
Today – on Sunday – a bit more expensive again? More expensive than when?
Idd but Vietnam has also devalued its currency twice in recent months, today China also "China central bank cuts benchmark interest rates" probably the next step for Thailand (between 2 and 5 %) but I'm not a "guru", wait and see
Who all knows about it and makes predictions about the economy and about the value of a currency. Almost nobody. Then I would have been rich just like all those people who know it all so well..
Look forward to the bank of Thailand with excitement on Monday morning. Then what is the rate.
The holiday money of the poor people who live in Thailand is coming.
Could easily save thousands of Bht.
I don't care what people in the Netherlands think of it, we have the good years in Thailand
had and enjoyed it. Perhaps the brave among us who dared to move to Thailand with their pension with more than 45 years of work in the Netherlands will get a little more
to be lucky.
Cor van Kampen.
Nice story from CNBC But they forget to tell you that Seagate is going to build a new factory in Nakhon Ratchasima for which they need 2500 extra people
I have been following the exchange rates of the euro in relation to the dollar and the bath for some time now.
Have only one conclusion, the thai bath follows almost the same fluctuation as the dollar despite the decoupling from the dollar.
Still a quick answer for Jasper. Today is May 10. that's Sunday.
Banks are closed in Thailand. The last price was around 37 after closing time on Friday.
Do you also have special information about the exchange rate on May 10 in Thailand?
Would like to know.
Cor van Kampen.
XE Currency:37,4927 on May 10, 18.00:37,6981 PM 8 on May 18.00, XNUMX:XNUMX PM
38,1842 incidentally on 7 May 12.00
Visit http://fx-rate.net/EUR/ Also on Sunday the exchange rates.
It is that time again!!! First, the Thai Baht fell against. Euro and all kinds of forecasters came to report that the fall would go VEEEELLLLL further. With all kinds of lamentations and calls to the NL embassy to do something about pathetic Dutch people.
And now we have gurus again who report that the increase will continue much further. Ever heard of casinos????
So no one really seems to be able to predict what the price will do (it was already known for a long time). Are those same figures now going to call on the NL embassy to do NOTHING.
In short: a pointless discussion! Success with it!!!!
The point is not whether the baht will rise or fall as if it were a casino game. It's all about the strength of the underlying economy and this normally results in an appropriate valuation of the currency.
And it is precisely that agreement that has been hard to find lately. If the surrounding countries also devalue their currencies, Thailand will have to follow suit. I think Thailand would benefit more from an exchange rate of 40 or higher compared to the euro (and so will we as guests, of course). Thailand will have to take measures and has
this was wisely complied with!
As many have indicated, forecasting is difficult
The baht roughly follows the dollar.
Thailand's economy has rice as its largest export product
The price of rice is calculated in dollars
Rice price now $10 was $15 this time last year
The price of rice is the lowest in years, same price as the lowest price in 2007
Just look at the stock of barns with rice to sell, at the high purchase price that the farmers have received. The same story applies to the second export product rubber.
predict what the baht will do? I had been rich long ago
But Thailand is now being overtaken left and right by other rice producing countries.
So I would put my money at 1 euro equal to 45 baht whoever offers more
Greetings Pete
Dear Pete,
Rice is not even in the top ten.
http://www.worldstopexports.com/thailands-top-10-exports/3066
In dollars, rice exports ($5 to $7 billion) will be about 1 percent of Thai exports.
Cbnc sends untruths into the air. The national bank of thailand has not let go of its support for the bath. Because then it would have been the first in the bangkok post. And it would have been extensively on TV. The link with the dollar is still maintained. If the dollar rises or falls against the euro, the bath does the same. Only the dollar does that against the euro by 0.2 and the bath against the euro by 0.1. But the link is still there. Look up http://www.wisselkoers.nl. There you can see all the graphs. The reason that people get more baht compared to the dollar is because they have lowered the interest rate twice by 2% and they will do so again in the coming weeks by 0.25%. The Vietnamese currency does the same. There was no devaluation, but two interest rate cuts. Vietnam has the same link, Myramar does not. The only thing that can help Thailand is a controlled devaluation, if this is not done, the crisis will strike, with all its consequences. All this value decline etc. is all created by money traders. Because who benefits? The money traders. Because if one looks at how values change just before the times when the exchange rates are set. See ing. Euro/bath. Then one sees enough. And it is nonsense that the hourly wage in Thailand is too high. Can it be lower than that? No. Vietnam is located by the sea. So no expensive domestic transport costs that Thailand has when, for example, products from Udon Thani have to be transported to container ports. So before posting anything, first make sure it is true. The problem in Thailand is that the banks lend almost everything to the people. It is incredible that you can already get a loan of 0.25 baths, without collateral and only 2 baths as a deposit. The whole of Thailand runs on borrowed money. On average, each household has 30.000 baht in debt, while 1000% earn 180000 to 90 baht. So today or tomorrow the bubble will burst.
Of course this is good news for most expats and tourists who earn their money in a normal way or receive their pension.
Spending amount goes up, this is also good for the Thai economy.
For people who got their money in an illegal way, it doesn't make that much difference.
These people generally have so much money that they do not worry whether 1 euro is worth 45 baths or whether one euro is worth 37 baths.
I myself hope that exports will flourish again as a result of this measure, and that the normal hard-working Thai can also benefit from this.
Been to Bangkok twice in the last four weeks, the first time with my family, the second time alone. Compared to the last time I was in Bangkok (end of 2012) I found everything to be incredibly expensive. With a normal spending pattern (I'm not a big drinker nor a big eater and don't set high standards for the hotel where I stay; nothing special done) we spent hundreds of dollars more than (broadly) budgeted. In Thailand they won't see me for a while.
The fact that the euro is rising somewhat compared to the thai baht has nothing to do with that baht, nor with the BoT's recent interest rate decision. It's too early for that. The baht is lagging behind the dollar, and Thailand's economy is still a long way off. There are many problems that need to be solved, such as the immense rice stocks, the sluggishness of SMEs, and the mountain of household debt.
The hesitant recovery of the euro stems from another source:
in the first place, the US Federal Reserve already announced in its interest rate decision in March that it will take a less aggressive approach to raising interest rates.
Second, US economic news has disappointed, while eurozone data continues to beat expectations.
Third: the fall of the euro had become very exaggerated and is being corrected. Or to speak with investors: the euro was heavily oversold. Which is not to say that an upward price bubbles up.
The sharp fall of the euro had come to fruition on 16 March. The euro was worth 34,09 ThB that day. Today you get about 36,86 ThB at a Thai bank.
The dollar:euro ratio was 16:1,00 on March 0,95, and today's 1:0,89, as was the case throughout 2014. So for now we are talking about a cosmetic correction, which is welcome, but does not promise anything else. For some, it remains to wait for better times.
Look, you can also look at it differently. If you sell your house in due course and go back to the small giveaway country, you will benefit from a strong baht. And those who have just transferred a considerable amount to a Thai account also do not like the fact that the euro value is melting away. Look, take a reasonably middle class house in Thailand, say 10 million baht or about 300.000 euros now. If the baht were to drop 10%, you would lose 30.000 euros when selling and returning the proceeds to Holland. So they are not always people on the seamy side, rent a studio, but can just get by with what is essentially an old-age pension or meager pension.
I transferred money to my Thai account at the beginning of April and at that time I received just over 33. For my cash money I received just under 34 in April this year and indeed after Songkran the baht has recovered slightly to around 36 on this moment. This is slightly lower than in recent years in my opinion.
So I don't understand why it's so good for me...
Everything is naturally more expensive while most prices in Thailand are the same.
The Bath is still pegged to the US Dollar. Today the Euro dropped slightly compared to the Dollar and immediately you see that you also get less Baths. So there is no question of depreciation as the BOT claims.