Baht What up with Dat?????

[JimboPSM]

That chart is definitely wrong.I distinctly remember the baht going just below 30 ,3 years ago!

Sorry Stan, in this case your memory is faulty, the chart is 100% correct.

Here is a link to a Yahoo Finace interactive chart,showing 3 days of closing below 30 in 2007;JUly 16 at 29.90,July 30 at 20.85 and dec.31 at 29.70....... plus I did get 29.62 from the ATM during some period in 2007 even though my memory is faulty at times

Link:
http://finance.yahoo.com/echarts?s=USDT ... l=USDTHB=X

The charts on BBC, Yahoo and similar interactive rate sites gave substantially false readings during the period that the two tier exchange rate was in existence.

The rates suffered from substantial distortion after the BoT introduced the two tier system in December 2006 because the data providers who provided the feeds to BBC, Yahoo, etc did not differentiate between the “Offshore” and “Onshore” rates; consequently the charts became pretty well useless.

The BBC and Yahoo charts were incorrect then, they have never been amended and they are still incorrect now.

I queried the charts with BBC and others at the time (and I also posted about it on UM), I had several telephone discussions with the BBC and although they did acknowledge there was a problem I could not persuade them to separate the “Offshore” and “Onshore” rates.

With regard to the Yahoo charts covering July and December 2007 - the following contain the USD/THB data from Kasikorn Bank for July and December 2007 which I collected on a daily basis and I believe it to be correct (I have cross checked the rates for a few of the days with Bangkok Bank and they are virtually identical), the Yahoo charts, like the BBC charts relied on mixed data feeds covering both Onshore and Offshore data which and in my opinion is incorrect. As can be seen the Onshore rates never got remotely close to "29" in July or December 2007.
July 2007

USD-THB-2007July.jpg (171.23 KiB) Viewed 1721 times

December 2007

USD-THB-2007December.jpg (152.96 KiB) Viewed 1721 times

The rates data that I used for my charts for the entire period of the two tier exchange rate system were the daily closing “Onshore” rates taken from the published foreign exchange rates at Kasikorn Bank. I have tried to recheck the Kasikorn data but the historical data on their website now only goes back to 2008, however I was able to check it on the Bangkok bank site where data for 2007 is still available and it is virtually identical to the old data I had from Kasikorn.

There were a multitude of cases that I can recall being posted on different Thai forums in 2007 where Thai banks were incorrectly using “Offshore” rates when they should have been using “Onshore” rates – subsequently it was noticeable that Thai banks appeared to make disproportionately large profits during the period of the two tier system (which would seem to indicate that they made a lot of errors which just happened to go in their favour).

In my opinion, if you received 29.62 on a transaction you were probably the victim of one of those incorrectly applied “Offshore” rates.

[nkstan]

Well I guess what really counts is what we get in an actual exchange.Other than the fact that I didn't like the 29.62 exchange rate,I accepted it as I saw the Yahoo chart was in close correlation to what I got at the time!

At the moment Yahoo shows 31.73 !How does that square with what you are seeing on your charts?

[JimboPSM]

...... At the moment Yahoo shows 31.73 !How does that square with what you are seeing on your charts?

This is my latest data, the figures for the 18th are provisional and include the first update (at 10.36) for the day.

August 2010

USD-THB-2010August.jpg (108.54 KiB) Viewed 1701 times

Todays latest average rate is 31.685, the close last night was 31.725 which when rounded off is the 31.73 you quoted above.

As there are no longer two separate rates the feeds for BBC and Yahoo are generally very close to the actual average buy/sell rates, however they should still be treated with caution as the feeds do break down from time to time.

It is only the period while the two tier system was in operation and a period after it "terminated" while term contracts either matured or were unwound that the BBC and Yahoo charts were incorrect.

[bumper]

Two systems sounds about right

[nkstan]

Just saw 31.62 on Bloomberg TV!

[nkstan]

Just saw 31.62 on Bloomberg TV!

That is a ''one'' baht drop in the last month!

[Zama]

New to the Blog: So where do you think it will go by the end of the year?
Very Respectfully to all..

[nkstan]

The Nation,this morning:

TREASURY VIEW
For the baht, the only way is upBy Nattawut Sachabudhawong(meaning less baht for exchanged foreign currencies)
Published on August 19, 2010


With the recent movement of the baht, especially in August, the timing seems right to recap the fundamentals behind the currency's recent shifts in value.

In 2009, it opened at 34.8 against the US dollar, before ending the year 4 per cent stronger at 33.3. However, this year has already seen a 4.2 per cent increase in value against the dollar. At the beginning of 2010, many pundits were expecting to see the baht level out at around Bt32/dollar by year-end. At the time, we argued that the baht might strengthen beyond these expectations to around Bt31/dollar. We remain firm in that view.


Both internal and external factors have led to that conclusion.


The internal factor is Thailand's balance of payments figure, which is reflecting a huge surplus in both our current account and capital account. Significant growth in the exports sector during the first half of the year has helped produce a figure of $6 billion-plus in the current account, while, the capital account added another surplus of $7.5 billion, mainly from capital inflow into both the stock markets and capital markets. These two combine as the balance of payments figure, which so far is growing faster than last year.

Externally, there are two factors. First, the yuan has become a key factor over the past couple of months after China decided to allow its currency flexibility by releasing the unofficial peg to the dollar. As a result the yuan will tend to appreciate, and will drag along regional currencies including the baht.


Second are the changes to growth expected in major economies of the US, Europe and Japan in the second half of this year. The fiscal policies these economies have used to kick-start growth will begin to have less impact, and we expect to see slower growth here. Meanwhile, the emerging economies of China and the East should continue to grow apace, allowing their central banks to normalise their interest rates sooner. This will attract more capital flow into our region, which should push up the value of Asian currencies in the second half of this year.
With this combination of external trends and internal factors, there is only one way for the baht to go in the second half of this year - up.

Nattawut Sachabudhawong is a member of the assets and liabilities management team of Siam Commercial Bank's Treasury Division.

[bumper]

Well this isn't much comfort. In watching BBC this morning the Yen has went up 9.96% , this year.

I think we are pretty much up the creek without a paddle. The Philippine Peso was trading at 56 when I retired 42 today.

Ron was partially correct back in the day. The Vietnamese have devalued the dong intentionally again, I say partially correct as I still don't know what the cost of living is there. The numbers don't mean as much a what can get for your money.

There is inflation here in Thailand you can see it everyday when you buy food. The way to offset that is to raise interest rates. The by product of that the baht will become stronger.

So it looks to me that what is going to happen will depend on our home countries and I believe we have several tough years ahead of us.

The other option try to get more n bang out of your buck. Can't do it in bank account doesn't pay enough to offset the inflation. That is exactly what drove me to learn stocks. I didn't know enough, nor do I now. So I joined a stock club. It ain't free there are annual fees. But the Thaistock club has done well by me. I have beat the rate of exchange and the bank rates and a little more.

Getting started wasn't as easy as it sounds first I had to find a broker who would work with me with 15K a month. I eventually found that in Asia Plus.

So whatever you can find to add a little to the kitty each month, will offset some of these losses are there risks yes. But no one told me before I moved here there was a risk in the exchange rates, well there was most thing that are worthwhile have risks attached. Doing the best you can to control those risks is the about the best . I'm sure as heck not looking to the dollar to save me the way things are now.

But that's just me and truthful scared the heck our of me, But I could find that 15K without endangering anything. I made a lot of mistakes but getting feed back from the club I have done OK so far. Probably would have done better had been listening better

[bigsnake]

No doubt about it folks the BAHT is KICKING BUTT BIG Time now a Day, Those that have the Euro and the dollars coming in are really taking it in the SHORTS<>NUFF SAID

[Aardvark]

We seem to be holding our own in Oz at the moment, hope it continues that way for the next few weeks [-o<

[bumper]

Your considered part of Asia so you might do OK, didn't they raise the interest rates not to long ago?

If they did that will help

[bumper]

http://www.nationmultimedia.com/home/20 ... 36150.html

This a very different view of the devaluation on the Dong, then the BOT's

I've waited for years for them to step on their foot. But, thus far they have been bullet proof

[Aardvark]

Your considered part of Asia so you might do OK, didn't they raise the interest rates not to long ago?

If they did that will help

Haha, yes Ray your right. Not that the Asian Countries agree because they see us as US and Uk partners and not Asian. Your also right that the interest rates have gone up and look to go up further in the short term. Google Fortiscue Metals if you want a good investment (spelling)

[arjay]

Re the devaluation of the Dong (though not by much), an interesting implication highlighted in the last piece of the article referred to above, which may possibly help:

Kasikorn Research Centre expects the devaluation of the dong to hit Thailand's agricultural exports, especially rice, rubber, shoes, garments and value-added seafood products.The Vietnamese dong devaluation is expected to boost the competitiveness of Vietnamese products in global market.

The Thai exporters might have to face a furious competition with Vietnam in global market. While, the strength of Baht is a factor to pressure Thailand's export.

That may put some pressure on Thailand not to allow the baht to appreciate too much (as they will now be even less competitive against Vietnamese products)!

[nkstan]

I agree Arjay!This is relatively ''good news for us'' and the first news that might slow the downward trend for the reasons you mentioned!

[cookie]

I agree Arjay!This is relatively ''good news for us'' and the first news that might slow the downward trend for the reasons you mentioned!

the Thai economy in general, (the farm sector included) is very strong and will continue to grow. Even the political unrest this year couldn't stop the thai economy because of the strong economic fundamentals.
here are the hard numbers and more hammering news for us:

Domestic vehicles exports in July amounted to 87,605 units, an increased of 139 per cent year-on-year, and 26.45 per cent over June of this year, according to the Federation of Thai Industries.

In the first seven months of this year, Thailand exported 422,364 units, up by 53.8 per cent from the same period last year.

http://www.nationmultimedia.com/home/Do ... 36202.html


and to make it even more worse:

http://www.nationmultimedia.com/home/20 ... 36234.html

Thailand reported a trade deficit of US$939 million (Bt29.6 billion) last month, the biggest deficit in two years, due mainly to increasing import demand for gold and auto parts to support export expansion.

The Commerce Ministry reported yesterday that the value of Thailand's exports in July grew 20.6 per cent to $15.5 billion, while imports surged 36.1 per cent to $16.5 billion, a record for imports in two years.

Exports in the first seven months jumped 34.1 per cent to $108.63 billion while imports rose 49 per cent to $103.19 billion. Trade surplus totalled $5.43 billion in the first seven months of this year, despite a huge trade deficit last month.

The ministry reported that imports saw a big jump last month due to the lower gold price compared with June this year.

Gold imports reached 44.57 tonnes, worth $1.7 billion last month, up 203 per cent from $126.6 million in June. This was due to the lower gold price in the world market, which dropped by 3.01 per cent month on month to $1,231 per ounce in July.

Imports of vehicles and parts, including automobiles and parts, and motorcycles and parts, rose steeply last month by 77.1 per cent to $697.8 million.

"Continued export growth in July has ensured that Thai exports will achieve the expansion target of 20 per cent to Bt183 billion this year, said Commerce Minister Porntiva Nakasai.

However, the appreciation of the baht has emerged as the biggest concern, with the possibility of it slowing down export growth in the remaining period, she said.

Porntiva said the baht could even strengthen to Bt30 to the US dollar. To ensure export growth, the ministry will cooperate with the Bank of Thailand to stabilise the baht, she said.

Meanwhile, following a significant growth in exports, domestic consumption and recovery in the tourism sector, the University of the Thai Chamber of Commerce (UTCC) has revised up its economic forecast for 2010 from 56 per cent to 6.57.5 per cent.

It is expected that the Thai economy has a high possibility of achieving 6.9 per cent expansion, valued at Bt9.67 trillion this year.

and more predictions:

robust economic growth would result in higher employment and more loan demand in the final quarter of this year, and next year.

Factors that may cause slowing down of economic growth are sluggish demand in the United States and the European Union, and the stronger baht, which is expected to touch Bt31.3Bt31.4 in the fourth quarter of this year, said Thanavath.

the farm sector is expecte4d to grow, even with the vietnamese intervention:

The new forecast took into account that incomes from tourism will grow by 6.02 per cent this year from minus 9.85 per cent, with the number of tourists reaching 14.6 million this year; exports are expected to grow by 23.9 per cent; domestic consumption will reach 3.8 per cent from a 1.1percent slide last year; and foreign direct investment will improve by 5.7 per cent from a 9percent decline last year.

GDP for the farm sector is projected to grow from minus 0.5 per cent last year to 2.1 per cent expansion this year, while GDP for the industrial sector will climb from minus 5.1 per cent to 11.5 per cent this year.

The assumption of 6.57.5 per cent growth is based on an estimated average exchange rate of Bt32 against the greenback, policy interest rate at 1.752 per cent, inflation at 3.5 per cent, and unemployment rate at 1.3 per cent.

Additionally, the UTCC also expected that the Thai economy will continue to grow by 45 per cent next year. Due to the strong economic fundamentals, the baht could move up to Bt30 to the US dollar next year.

[bumper]

BOT is already saying it won;t we will see.

[bumper]

Something like this may get the BOT's attention we have a new Hua Naa there now, this goes beyond the Issan rice farmers.

Business » Economics
FTI: Each 1% rise costs exporters B1bn

* Published: 20/08/2010 at 03:23 PM
* Online news: Breakingnews

For every one per cent appreciation of the Thai baht the cost to car exporters is one billion baht in lost revenue, Payungsak Chartsuthipol, chairman of the Federation of Thai Industries (FTI), said on Friday.

Mr Payungsak said the private sector was worried about the current strength of the baht as it could well drag on until next year, due to a continuation of the economic slowdown in the US and the European Union.

“The baht's value could strengthen to 30 baht to the US dollar in 2011. This has prompted manufacturers to adjust their business plan based on a foreign exchange rate of 31 baht to the dollar, to minimise business risk,” he said.

However, the private sector was confident that the Bank of Thailand would be able to stabilise the currency's value to keep it in line with other Asian countries’ currencies.

The FTI chairman was concerned that a strong baht would hurt car exports because every one per cent rise in the strength of the baht would cost vehicle makers about one billion baht in export revenue.

“Since the beginning of the year, the baht has strengthened by eight per cent, reducing automobile export values by nearly 10 billion baht.

"If the situation continues, Japanese car makers could scrap plans to move their production bases to Thailand,” said Mr Payungsak.
About the author

columnist
Writer: Online Reporters
Position: Online Reporters

[bumper]

This is bad news for expats good news for Thai's. They speak mostly of the dollar interestingly the dollar index went up last night, due to people buying U.S. Treasury Bonds, The key point for us in this is the interest rates most likely going up to curb inflation. It won't matter much what currency you use the baht will strengthen. Unfortunately this time it's understandable or we would be living in a Zimbabwe economy.

Money that would normally be headed to stocks is now going to bonds. They keep talking about consumer confidence, but the real key is jobs. Hard to spend that dollar if you don't know where the next one is coming from. I would imagine that works the same with any of the currency's we use.

Business » Economics

ECONOMY
Exchange-rate risk challenges growing

* Published: 21/08/2010 at 12:00 AM
* Newspaper section: Business

Managing monetary and fiscal policy will become more challenging in the future, as the baht is expected to continue to gain on foreign fund flows, according to Somphob Manarungsan, an economist at Chulalongkorn University.

Exchange-rate risk will increase for Thai businesses as liquidity moves from the US and Europe to emerging markets such as Thailand, he said at a conference held yesterday by the Bank of Tokyo-Mitsubishi UFJ.

The baht is now at its strongest level since 2008, thanks to steady capital inflows driven by strong exports and portfolio investment. The currency, up 5.7% for the year to date, closed yesterday at 31.49/53 to the US dollar, compared with 31.52/57 on Thursday.

Dr Somphob cautioned that capital flows would remain volatile given the uncertainties in the global economic market.

"Asian markets, including Thailand, have benefited from the flood in portfolio investment into the region. But money flows could reverse quickly if there is a problem," he said.

"Not only in the equities markets, but the bond market as well. The rise in bond prices while other asset classes have fallen has pulled yields downward."

The Stock Exchange of Thailand index has risen 21% for the year to date, thanks in part to net buying by foreign investors worth 2 billion baht for the year. The index, which is closing on its highest levels in three years, closed yesterday at 893.92 points, up 2.69, in heavy trade worth 40.23 billion baht.

Sukit Udomsirikul, a senior vice-president at SCB Securities, said the index could reach 960 points based on a valuation of 12 times forward earnings.

"It will take even stronger economic fundamental improvements however for the SET to reach 1,000 points," he added.

In any case, Dr Somphob said the central bank would face challenges in managing monetary policy to avoid an excessive interest rate gap that could further spur inflows of "hot money".

Policymakers also have to consider how to take advantage of a stronger baht, such as through hastening capital goods imports for public investment.

With economic growth expected to top 10% for the first half of the year, most analysts expect the Bank of Thailand to raise its one-day policy rate, now at 1.5%, when it next meets on Aug 25 to help curb inflationary pressure over the next several quarters.


( Sounds like a vicious circle doesn't it)

But with the US economy stalled and short-term interest rates still essentially zero, a local rate hike would widen the rate gap and potentially draw even more capital inflows, putting added pressure on the baht to appreciate against the US dollar.

( Sounds like a vicious circle doesn't it)

Roong Sanguanruang, chief market analyst, for Bank of Tokyo-Mitsubishi UFJ, Bangkok branch, said the baht could reach 30.75 to the dollar by mid-2011 due to the favourable growth outlook and current account surplus.
About the author

columnist
Writer: Darana Chudasri
Position: Business Reporter