Baht too strong - urgently needs freedom to float

Baht too strong - urgently needs freedom to float

Postby oldexplorer on Thu Mar 12, 2009 11:21 am

As the massive Chinese economy begins a freefall descent in response to the Western financial collapse, the Abhisit government needs to assist Thai exports by allowing the Baht to float downwards. Keeping the Baht slavishly locked to the US Dollar is short-sighted, and will simply make Thai exports uncompetitive on the increasingly hostile global economic battleground.

A high Baht also damages tourism - British tourists in particular are ignoring Thailand at the moment because of the strong Baht (also admittedly partly because UK Sterling has weakened). What about introducing special attractive rates for tourists?

The Thai economy is in danger of being left high and dry by a strong Baht, and becoming completely uncompetitive. The Abhisit government and the Banks need a fresh approach and some creative thinking.
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Re: Baht too strong - urgently needs freedom to float

Postby Sean Moran on Thu Mar 12, 2009 11:31 am

by oldexplorer on Thu Mar 12, 2009 11:21 am
As the massive Chinese economy begins a freefall descent in response to the Western financial collapse, the Abhisit government needs to assist Thai exports by allowing the Baht to float downwards. Keeping the Baht slavishly locked to the US Dollar is short-sighted, and will simply make Thai exports uncompetitive on the increasingly hostile global economic battleground.

A high Baht also damages tourism - British tourists in particular are ignoring Thailand at the moment because of the strong Baht (also admittedly partly because UK Sterling has weakened). What about introducing special attractive rates for tourists?

The Thai economy is in danger of being left high and dry by a strong Baht, and becoming completely uncompetitive. The Abhisit government and the Banks need a fresh approach and some creative thinking.


Surely the real cost of living is still lower in Thailand than in Britain or California? We're still getting 23.3635 THB to one Aussie dollar according to today's www.xe.com which is still a few baht over what it was back in 1997, from what I have been told.
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Re: Baht too strong - urgently needs freedom to float

Postby sulasno on Thu Mar 12, 2009 1:57 pm

I wonder what would be a reasonable rate for the Baht against the other currencies?

Two think tanks in Thailand gave conflicting remarks;

One said that the Baht is going to weaken while another said that the Baht is growing stronger :lol: :lol: :lol:
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Re: Baht too strong - urgently needs freedom to float

Postby villager on Thu Mar 12, 2009 2:23 pm

Sean Moran wrote:
by oldexplorer on Thu Mar 12, 2009 11:21 am
As the massive Chinese economy begins a freefall descent in response to the Western financial collapse, the Abhisit government needs to assist Thai exports by allowing the Baht to float downwards. Keeping the Baht slavishly locked to the US Dollar is short-sighted, and will simply make Thai exports uncompetitive on the increasingly hostile global economic battleground.

A high Baht also damages tourism - British tourists in particular are ignoring Thailand at the moment because of the strong Baht (also admittedly partly because UK Sterling has weakened). What about introducing special attractive rates for tourists?

The Thai economy is in danger of being left high and dry by a strong Baht, and becoming completely uncompetitive. The Abhisit government and the Banks need a fresh approach and some creative thinking.


Surely the real cost of living is still lower in Thailand than in Britain or California? We're still getting 23.3635 THB to one Aussie dollar according to today's http://www.xe.com which is still a few baht over what it was back in 1997, from what I have been told.
Hi Sean , if you take into consideration inflation the Aussy dollars is worth far less than it it was 12 years ago, for instance a litre of gas was only 10 baht a litre then ,now its 22 or there abouts.
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Re: Baht too strong - urgently needs freedom to float

Postby Ian on Thu Mar 12, 2009 3:08 pm

Two year ago a GBP was equal to 70 baht, last year it was 60, now it is just below 50. So no more British tourists and many resident Brits on retirement visa can no longer meet visa requirements. Not that the Thai government gives a damn :lol:
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Re: Baht too strong - urgently needs freedom to float

Postby sulasno on Thu Mar 12, 2009 3:23 pm

is the Pound growing weaker against the Baht OR
is the Baht growing stronger against the Pound ?
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Re: Baht too strong - urgently needs freedom to float

Postby villager on Thu Mar 12, 2009 4:24 pm

sulasno wrote:is the Pound growing weaker against the Baht OR
is the Baht growing stronger against the Pound ?

Hi Sulasno, 12 months ago it was 33 baht to the Aussy dollar today its only 23 , the Euro has weakened too ,although i haven,t got figures to hand as to how much, as Ian rightly says the spending power of his pension have been decimated in the last 12 months,Add that to whatever savings he has with over 5% interest loss too, paints a pretty gloomy picture for the immediate future for all expat OAP,s.
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Re: Baht too strong - urgently needs freedom to float

Postby sulasno on Thu Mar 12, 2009 4:32 pm

villager wrote:
sulasno wrote:is the Pound growing weaker against the Baht OR
is the Baht growing stronger against the Pound ?

Hi Sulasno, 12 months ago it was 33 baht to the Aussy dollar today its only 23 , the Euro has weakened too ,although i haven,t got figures to hand as to how much, as Ian rightly says the spending power of his pension have been decimated in the last 12 months,Add that to whatever savings he has with over 5% interest loss too, paints a pretty gloomy picture for the immediate future for all expat OAP,s.


It would appear the UK's economy is much worse than Thailand's; (that is if the Pound has gone weaken against the Baht)
but again nobody is sure whether the Baht is being supported by BOT; guess that they are still weighing the pros and cons of a weak Baht

A weak Baht will definitely help the exporters but again there is no present demand for Thai's products and hence not much sense in having a weak Baht (for the time being)
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Re: Baht too strong - urgently needs freedom to float

Postby Ian on Thu Mar 12, 2009 10:15 pm

sulasno wrote:
villager wrote:
sulasno wrote:is the Pound growing weaker against the Baht OR
is the Baht growing stronger against the Pound ?

Hi Sulasno, 12 months ago it was 33 baht to the Aussy dollar today its only 23 , the Euro has weakened too ,although i haven,t got figures to hand as to how much, as Ian rightly says the spending power of his pension have been decimated in the last 12 months,Add that to whatever savings he has with over 5% interest loss too, paints a pretty gloomy picture for the immediate future for all expat OAP,s.


It would appear the UK's economy is much worse than Thailand's; (that is if the Pound has gone weaken against the Baht)
but again nobody is sure whether the Baht is being supported by BOT; guess that they are still weighing the pros and cons of a weak Baht

A weak Baht will definitely help the exporters but again there is no present demand for Thai's products and hence not much sense in having a weak Baht (for the time being)


There are two effects at work here, firstly the pound has weakened against the dollar. Secondly the BOT is trying to maintain parity with the dollar by supporting the baht. So as the dollar slowly rises the BOT raises the Baht to maintain parity. This makes the baht rise against the pound.
So there are two questions, can the dollar continue to recover, and if it continues how much more reserves does the BOT have to maintain parity with the dollar.
The pound is simply colateral damage in this Baht-dollar game.
However, whilst this "who blinks first" game is going on Thailand will continue to be unattractive to all but Americans, and of course the American people are skint.
Hang in there villager, just tighen your belt for a year, perhaps a lot less than a year, I sense the BOT is scraping the barrel.
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Re: Baht too strong - urgently needs freedom to float

Postby villager on Fri Mar 13, 2009 5:25 am

Thanks for the inspirational Ian, I,ve every intention to "hang on in there" and even with the strong Baht i find my moneys go,s further here , and i take great comfort in know that i can walk out and leave my front door open for hours on end without worrying about someone entering and stealing my property ,which was a total impossibility where I lived in the UK.
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