Baht Reaches Six Year High

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Up2u
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Re: Baht Reaches Six Year High

Post by Up2u » Fri Oct 25, 2019 1:09 pm

"The baht's value is forecast at 30.50 baht per dollar this year-end, according to KBank."....... well it's below 30.5 now.

https://www.xe.com/currencyconverter/co ... USD&To=THB

If you use TransferWise, the above link will help in your transfer exchange rate.

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Re: Baht Reaches Six Year High

Post by Gaybutton » Fri Oct 25, 2019 2:38 pm

Up2u wrote:
Fri Oct 25, 2019 1:09 pm
If you use TransferWise, the above link will help in your transfer exchange rate.
On their web site TransferWise publishes the exchange rate they use.

I find this link more accurate and current: https://www.scb.co.th/en/personal-banki ... tml#fxrate

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Re: Baht Reaches Six Year High

Post by Up2u » Fri Oct 25, 2019 8:43 pm

Gaybutton wrote:
Fri Oct 25, 2019 2:38 pm
Up2u wrote:
Fri Oct 25, 2019 1:09 pm
If you use TransferWise, the above link will help in your transfer exchange rate.
On their web site TransferWise publishes the exchange rate they use.

I find this link more accurate and current: https://www.scb.co.th/en/personal-banki ... tml#fxrate
The rate TW uses the mid-market rate as linked in my post.

https://transferwise.com/gb/mid-market-rate

The rate you post is static and I believe is updated once a day and is the SCB rate which can get you close to the ATM rate depending on timing. As I type the rate is 30.17 (fluctuates).

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Re: Baht Reaches Six Year High

Post by Gaybutton » Fri Oct 25, 2019 9:05 pm

Up2u wrote:
Fri Oct 25, 2019 8:43 pm
The rate you post is static and I believe is updated once a day
Actually they usually update it several times a day. It's only once a day if the rates don't change during the day. Even today they updated it 3 times.

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Re: Baht Reaches Six Year High

Post by Gaybutton » Sat Oct 26, 2019 2:52 am

Another rate cut won’t curb baht, MPC member says

'The government should help' rein in strong currency, says Kanit Sangsubhan

25 Oct 2019

A further reduction in Thailand’s benchmark interest rate won’t help much in efforts to restrain the baht, says a member of the Monetary Policy Committee.

While a rate cut may reduce capital flows into financial markets, foreign tourism receipts are the main driver of the currency, Kanit Sangsubhan, one of seven members of the Bank of Thailand panel, said in an interview on Thursday.

“Baht strength is a concern for everyone, including the Bank of Thailand,” he said. “The central bank has informed the government that it’s a problem and the government should help.”

Mr Kanit is the secretary-general of the EEC Office.

The baht reached a six-year high on Friday at 30.18 to the dollar. Its jump of about 7.8% in 2019 is the second-best in emerging markets. The currency has climbed despite central bank steps such as curbs on speculative inflows and a policy rate cut in August.

“The baht has been strengthening because the impact of the US-China trade war on Thailand is minimal, and the current-account surplus is high due to inbound tourism,“ Mr Kanit said.

He declined to comment on whether there’s scope to cut borrowing costs at the next policy meeting on Nov 6.

The central bank is in charge of restraining the currency, Deputy Prime Minister Somkid Jatusripitak told reporters on Friday.

“The government can’t step in to interfere,” he said. “We’ll let the Bank of Thailand take care of this.”

Thailand’s economy relies on exports as well as tourism receipts. Both drivers have been dented by the global slowdown and baht appreciation, putting the nation on course for its weakest expansion in five years in 2019.

Mr Kanit said a 224-billion-baht high-speed railway project that he helps to oversee for the government is the kind of initiative that could assist in addressing the currency challenge.

“Importing content relating to high-speed rail will be worth 30% to 40% of the project cost, and could help curb the baht,” he said.

Earlier in October, the BoT said it plans to relax rules on capital outflows in coming weeks to help tackle baht appreciation.

The MPC has said it periodically steps into the foreign-exchange market to curb excessive baht swings. But its scope for aggressive intervention is limited by US oversight of the currency policies of trading partners.

https://www.bangkokpost.com/business/17 ... -tame-baht

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Re: Baht Reaches Six Year High

Post by Gaybutton » Mon Oct 28, 2019 12:05 am

Why the baht is surging

October 27, 2019

The Bank of Thailand is finding it tough to stop the baht from surging.

The currency advanced as much as 0.3% on Friday to 30.187 per dollar, the strongest level since May 2013. That takes its gain to 7.8% this year, more than any of its emerging-market peers except Russia’s ruble.

The gains have defied the efforts of authorities, who fear the baht’s strength is becoming a drag on the economy. Finance Minister Uttama Savanayana said on Oct 9 that the central bank should “take care” of the currency.

Why is the baht so strong?

Several factors are attracting investors to Thailand, making it a haven for foreign money. But its healthy current account tops them all, according to analysts at Goldman Sachs Group Inc. The International Monetary Fund forecasts the country will post a surplus of 6% of gross domestic product this year, almost double that of Japan.

Thailand’s reserves and negligible inflation also provide investors comfort. The central bank’s foreign-cash pile stands at $220 billion, the equivalent of more than 12 months of imports. And inflation, currently 0.3%, has been running below the central bank’s target of 1% to 4% since June.

As if these weren’t enough, Thailand is getting a boost from gold. A hub for bullion trading, Thailand has benefited as jitters about the US-China trade war and global economic slowdown have driven a 17% gain in the price of the metal this year.

Why is the baht’s strength a worry?

As is always the case when currencies strengthen, exporters are suffering. The tourism industry, which accounts for about a fifth of GDP, is also hurting. The Tourism Council of Thailand last month revised down its estimate for visitor numbers this year to fewer than 40 million, citing the baht as the biggest reason.

All of which is conspiring to sap growth. The economy will expand 3% this year, down from 4.1% in 2018, according to a Bloomberg survey of analysts.

What’s the central bank doing about it?

Quite a bit. As recently as Oct 10, the BoT said it would relax capital controls to make it easier for locals to move money abroad. Governor Veerathai Santiprabhob has also called for more domestic investment to narrow the current-account surplus.

Authorities have taken measures to curb short-term capital inflows, including cutting sales of Treasury bills. In July, they reduced the cap on non-resident bank accounts to 200 million baht ($6.6 million) from 300 million baht and, to boost surveillance, said the actual owners of local debt securities must be reported.

The BoT cut its policy rate once this year, trimming it by 25 basis points to 1.5% in August. Kanit Sangsubhan, one of seven members of the Monetary Policy Committee, said a further reduction in the rate won’t help much in efforts to restrain the baht.

One thing they have been reluctant to do too much is interfere directly in the foreign-exchange market, for fear of getting labeled a currency manipulator by the United States.

How much more can the baht appreciate?

Right now, all eyes are on whether the baht will breach 30 per dollar, a level it hasn’t reached in more than six years. Of the 24 analysts surveyed by Bloomberg on the currency, Morgan Stanley is the only one expecting it to reach that point by the end of this year. The median estimate is for it to fall to 30.8 by then and to 31 in 2020.

According to the IMF’s real effective exchange rate calculations, which take into account Thailand’s trade flows, the currency’s already well overvalued. It’s at the strongest, by that measure, since its crash in 1997, which triggered the Asian financial crisis.

However, much will depend on the outcome of the US-China trade dispute and how the central bank reacts to the baht’s continued appreciation.

https://www.bangkokpost.com/business/1780929#cxrecs_s

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Re: Baht Reaches Six Year High

Post by Jun » Mon Oct 28, 2019 1:25 am

Bangkok Post wrote:
Mon Oct 28, 2019 12:05 am
Why is the baht so strong?

Several factors are attracting investors to Thailand, making it a haven for foreign money. But its healthy current account tops them all, according to analysts at Goldman Sachs Group Inc. The International Monetary Fund forecasts the country will post a surplus of 6% of gross domestic product this year, almost double that of Japan.
Common sense says this is how exchange rates SHOULD work.

After all, if you have one country which consistently runs a large annual trade surplus & others which consistently run a large annual trade deficit, then common sense observation #1 is that this cannot last for ever. If it did last for ever, eventually the deficit country would run out of money. So a mechanism is needed to correct this.
It seems only reasonable that the currency of the trade surplus country will appreciate. This will tend to correct the deficit by making exports more expensive, visiting that country more expensive and so on. The people in the country with the appreciating currency benefit from lower costs of imported goods, such as oil. Perfectly fair.

[Incidentally, back in the summer, our agitator said I was wrong to state Thailand was running a balance of trade surplus. Until I posted evidence showing that it was running a surplus. Now the IMF is predicting a 6% of GDP surplus. Which is HUGE.]

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Re: Baht Reaches Six Year High

Post by Gaybutton » Thu Oct 31, 2019 1:34 pm

Baht vexes tourism groups

Currency's climb puts high season in doubt

31 Oct 2019

A strong baht presents the most pressing challenge for tourism this high season after the currency reached its highest level in six years, say tourism business leaders.

The currency surged to 30.22 baht per US dollar on Friday, with some analysts expecting the baht to rise past 30 per dollar next year.

Vichit Prakobgosol, president of the Association of Thai Travel Agents (Atta), said the tourism sector could lose a crucial opportunity to attract tourists to Thailand during the peak season from November to December, falling short of the government's target for this year.

"We have no control over external factors like the US-China trade spat, but the government and the Bank of Thailand can help solve the problem by lowering the interest rate to help operators in both the tourism and export sectors," Mr Vichit said.

He said the extension of 2,000-baht visa-on-arrival fee waivers is helping to maintain the number of Chinese tourists at a healthy level this year, even as the yuan weakens.

The baht rose from 33.13 baht per dollar on Oct 29, 2018 to 30.22 a year later, according to the central bank.

"If the baht breaks 30 to the dollar, the tourism sector will be affected, with lower inbound tourists and more Thais travelling abroad," Mr Vichit said.

The currency issue led the Tourism Council of Thailand to downgrade its prediction for foreign tourist arrivals this year to 39.7 million from 40.1 million, cutting the tourism revenue projection to 1.95 trillion baht from 2.13 trillion baht.

The strong baht is projected to cut individual tourism spending to 4,000 baht a day from 6,000-7,000 baht a day.

Chamnan Srisawat, chief executive of Srisawat Travel & Tour in Krabi, said that in terms of arrivals, most tourists from Europe who travel in groups have already booked their trips in advance, even though the advance booking time has shortened from six months to just two months.

For the short-haul market, Mr Chamnan said tourists are tending towards nearby countries like Vietnam, which has new man-made attractions and cheaper prices.

"Chartered flights from five cities in China to Krabi also decreased by 30%, but we are hopeful they will rebound in December," he said.

With travel expenses for tourists rising 20% because of the strong baht, Koh Samui lost about 110,000 tourists during the first nine months of 2019, said Vorasit Pongkumpunt, president of the Tourism Association of Koh Samui.

The hotel occupancy rate in Koh Samui for November (still considered rainy season) dropped to 30% from 50% of 27,000 available rooms, based on advance bookings.

On the other hand, Mr Vorasit expects post-Christmas occupancy to stay healthy at 70%.

The Tourism and Sports Ministry reported that international arrivals in the first nine months stood at 29.5 million, a 3.5% year-on-year increase, generating 1.42 trillion baht in tourism income, up 3.5%.

During the same period, Thailand welcomed 8.51 million Chinese tourists, up 1.7% year-on-year. Those arrivals generated 426.8 billion baht, up 4.1%.

The number of travellers from Europe fell by 1.8% year-on-year to 4.69 million in the period, leading to tourism income of 324.75 billion baht, down 2%.

https://www.bangkokpost.com/business/17 ... ism-groups

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Re: Baht Reaches Six Year High

Post by Undaunted » Thu Oct 31, 2019 6:22 pm

"In the land of the blind the one eyed man is king"

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Re: Baht Reaches Six Year High

Post by Gaybutton » Thu Oct 31, 2019 6:46 pm

Undaunted wrote:
Thu Oct 31, 2019 6:22 pm
Chiang Mai hotels feel the pinch:
I thought this line in the article was particularly significant: "She says that oversupply has been a factor in the downturn with an extra 10,000 rooms added over the last few years."

It makes me think about all those condos in Pattaya, including even more recently opened and others under construction. I think there will be a great many vacancies - either that or a buyer's market.

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