No measures yet to curb baht
The government is not yet taking any measures to dampen the appreciation of the baht. Measures have been prepared, but they will only be taken if the increase continues. Minister Kittiratt Na-Ranong (Finance) said this yesterday after a meeting with the central bank and the National Economic and Social Development Board (NESDB).
The Minister and the NESDB agree that the policy rate, set by the Bank of Thailand is too high. If it is not lowered, it attracts more foreign capital, causing the baht to rise further. Exporters have been calling for a reduction in the rate, on the basis of which banks set their interest rates, for some time now. At present, the policy rate 2,75 percent, the exporters and also Kittiratt want the bank to take 1 percentage point off.
Some economists warn that cutting the rate will fuel inflation. That is also why the central bank has so far refused to cut the rate. Lowering the rate causes long-term damage, as it is more difficult to curb inflation than to correct the hard baht. At yesterday's meeting, the central bank failed to convince Kittiratt and the NESDB of this.
De policy rate is set by the Central Bank's Monetary Policy Committee (MPC). The commission consists of four outside experts and the governor and two deputy governors of the central bank. The MPC will meet again at the end of next month. At the last meeting, the MPC decided to maintain the rate. It cited growth in credit, high household debt and rising real estate prices as reasons.
If the MPC decides again to leave the rate unchanged, the government will introduce measures to limit the inflow of foreign capital, says Kittiratt.
Kittiratt's comments late yesterday caused the baht to fall somewhat. "Investors are reassured because Kittiratt has said that the government and the central bank will not take any action as long as the baht does not rise above the 28-baht level [against the dollar]," said a trader.
(Source: Bangkok Post, Apr 27, 2013)
The exchange rate (for large denominations: 100-500 euros) is today in BKK:
SiamExchange.co.th. (near MBK) 38.10
SuperRich.1965.com (in Bangkok Bazaar, next to Big C, Rajdamri Road) 38.15
So slightly better.
actual exchange rate Kasikorn bank
5000 bath 136,97 € 9incl the 150 bath recording costs
ING does not charge any costs for withdrawal because I have the right package for abroad
i.e. the current rate;
1 thb is 0.0266
1 euro is 37,59 thb
Regarding Kasikorn in Siam
Hi Henk, do you perhaps have a link for me to the Kasikorn bank website where I can see the exchange rates? I assume that 37,59 is the amount you get for the euro you transfer from ING to Kasikorn. I'm always in trouble with purchasing and sales.
It seems reasonable to me that the government does not intervene “to dampen the rise in the rate of the Baht” ('mute', it is not a pit, is it? On the contrary). Of course there are interest groups (including exporters) who think otherwise. There are also major advantages for Thailand with a stronger Baht (including inflation control, costs of imported energy). The dowsing rod (who still believes in an exact economic science?) of mathematical common sense will have to determine where the tipping point of the advantages and disadvantages lies in the long term. The 'policy rate' is an indicator, but can only be called exact if you want to look away from its illusionistic character.
In the longer term, it must be inevitable that the difference in growth rates between the Thai economy and that of the Eurozone (whether or not amplified by the negligible euro interest rate) will lead to a stronger Baht. Currencies can go in any direction, but I think it would be wise for those who have to deal with the Baht-Euro exchange rate when spending, to assume 36 Baht or less for a Euro, rather than a more favorable rate. Then it may not be too bad. And windfalls are a shaky foundation for your basic budget.
@ Jan van Velthoven Mute is used in the message to mean tempering. See the unsurpassed fat Van Dale. I also notice that you are talking about the baht / euro exchange rate. I have never come across a message about that in Bangkok Post. All messages about the price increase are about the baht / dollar exchange rate. I have no idea what the relationship with the euro is like. So I won't venture to an explanation of the unfavorable baht / euro exchange rate. Maybe others can comment on that.
Dick,
my Dikke van Dale does not talk about dampening, but 1.about closing (a well), 2.making noise (or other vibrations) less loud,3.silencing (ending) a riot; and if 4 and 5 dampen the technical terms roof tiles and tarpaulins (respectively blue and pull along the yard). But to dampen an increase? No do not do that.
The Baht-Euro rate is actually derived from the Dollar-Euro rate; since the Euro hovers around 1.30 against the dollar, you get a Baht-Dollar at 28, for example, a Baht-Euro at 36.4. But this can wobble a bit. Positive (Euro above 1.30), but unfortunately also negative (Euro below 1.30).
Never believe that you can determine the right moment of exchange, unless you can manipulate the money market with billions of interventions…. Or you can speak of an unfavorable exchange rate now, you will only know later, for example in six months. If the exchange rate of the Euro is then lower, then we should call the current exchange rate favorable with nostalgia. I remember from the time of the guilder that the exchange rate (converted to Euro) was lower than the current one; and a few years ago it was higher.
Dick: Then you have a different fat Van Dale than me. But it's not that important now. You could also call it creative language use. I like that very much. Thank you for explaining the baht/euro exchange rate. Too bad Bangkok Post never writes about that.
@ Jan van Velthoven You write that the baht/euro exchange rate is derived from the dollar/euro exchange rate. The rise in the baht/dollar rate is attributed to the inflow of foreign capital. It cannot influence the dollar/euro exchange rate. So my question is: how can the drop in the exchange rate of the euro against the baht (in recent years) be explained? Years ago, 10.000 baht cost around 200 euros; now I pay something like 270 euros. What is your explanation for that decline?
Dick,
The fall of the Euro against the Baht is due to A. the fall of the dollar against the baht B. the relatively stable relationship between the euro and the dollar on average. Because we get an average of 1 dollars for 1.30 euro, we get less and less bahts for 1 euro, because for 1.30 dollars you got 50 baht a few years ago, and now (approximately) 37. In short: as long as the ratio between the dollar and the euro remains fairly stable, you get as many fewer bahts for 1 euro as for 1 dollar.
Of course, if the euro starts to fall sharply against the dollar (lowest point in recent years was 1.23), you will get even fewer bahts for your euro, and vice versa if the euro rises sharply against the dollar (highest point was 1.38 in recent years). that you get relatively more bahts. However, over the past year in particular, the euro-dollar ratio has yoyoed around 1.30, so the fall of the euro against the baht is quite parallel to that of the dollar against the baht.
Rule of thumb: if you multiply the number of Bahts you get for a dollar by the ratio eur/dollar, then you know (approximately, because there are still some minor factors and mathematicians at banks) the amount of Bahts you get for a euro.
If the inflow of foreign capital influences the baht-dollar rate, then it does simultaneously influence the exchange rate of the baht with all other currencies, including the euro, because all currencies have an exchange rate with the dollar. you now pay 270 euros for 10.000 baht, the decline of the dollar against the baht has been added to the constant ratio euro/dollar.
Note: there is a capital inflow into Thailand. Capital is never stupid. It is easy to guess what kind of indicator this inflow will be for the Baht exchange rate in the near future. It is perhaps comforting to think that we live in a time when capital flows can be shifted at lightning speed. But this does not offer any guarantee for the future. It remains wise to assume for the time being that the rate of the Baht will continue to rise against the dollar and the euro.
An answer from ING how they calculate their exchange rate. In March they used a very low exchange rate. However, according to them this is right!
On request at the bottom, therefore, also the kasikorn link for the price.
In your email dated March 12, 2013, you indicated that we charged an unreasonable rate for your withdrawal in Thailand. You want clarification on this. I would like to inform you.
The exchange rate used by ING
The rate used by ING is determined by Mastercard and is based on the Reuters rate, which is set daily at 16:00 PM. You can find the course at: https://www.mastercard.com/global/currencyconversion/index.htm
Rate storage
If you withdraw money in currencies other than euros, ING will charge a 1% exchange rate surcharge. The exchange rate surcharge is an amount that ING charges for converting into euros.
The Link of Kasikorn exchange
http://www.kasikornbank.com/EN/RatesAndFees/Pages/Banner2.aspx
Dick, you have no idea what it means for the Bath/Euro exchange rate.
We are talking about expats from the Netherlands or Belgium and are not interested in the Bath / dollar exchange rate. You are a Blog that represents those people.
Come with economic stories from some economist from America and don't portray me as a shoemaker. I've written before. You don't know my background.
Cor van Kampen.
Cor, you are absolutely right. The dollar/bath exchange rate doesn't interest me at all. I am Dutch and therefore look at the euro / bath rate. 6 months ago I got 1 baht for 40 euro and now only around 37 baht. A decrease of 7,5%. Doesn't seem like much but to me now in Thailand 1000 euros is only worth 925 euros compared to 6 months ago. I'm not an economist, but a stronger bath against the dollar automatically means a stronger bath against the euro, right? Or am I just that stupid?
& ad It is obvious that expats and tourists are more interested in the baht/euro exchange rate than the baht/dollar exchange rate. The posting you and Cor respond to is based on a message in Bangkok Post. For Thai readers, the baht/dollar exchange rate is apparently more important than the baht/euro exchange rate, because the newspaper does not mention that and I have never read anything about it.
Exactly what you say Dick. It is important for the Thai readers and not so much for the readers here on this blog who mainly consist of Dutch and Belgians. So I don't understand why the blog pays so much attention to this topic. As if there is no other news in the newspaper.
There is plenty of other news in the News from Thailand section, don't worry about that. As I wrote: when Bangkok Post does not write about the baht / euro exchange rate, it is difficult for me to write a message. The blog pays attention to the topic, because Bangkok Post pays a lot of attention to it. The News from Thailand section contains the most important news from Thailand. As a former journalist, I know all too well that (Dutch and Belgian) readers are not interested in all subjects and that is not necessary.
Hi Ad,
No, that's an incorrect assumption. If that were true, the dollar-euro ratio would always remain the same, and it doesn't. Just as the baht rises or falls against the dollar, the euro also rises or falls against the dollar. Ergo: if the baht rises against the dollar and the euro were to simultaneously rise against the dollar, there would be a good chance that the baht-euro ratio would remain the same.
And if the euro rises faster than the baht, you get even more baht for your euro. Roughly speaking, you can assume that the euro-dollar ratio fluctuates over the years between 1,10 and 1,40. That's quite a difference.
That in turn depends on the dollar/euro ratio. It is now around 1,30, but two years ago it was very close to 1,50 – the euro has therefore also weakened against the dollar.