#  >  > Living And Legal Affairs In Thailand >  >  > Thailand and Asia News >  >  > Business, Finance & Economics in Thailand >  >  Baht Set for Biggest Monthly Drop in 15 Months on Fund Outflows

## jandajoy

*I know nothing about the world of finance and economics but I would like this to be true.




Baht Set for Biggest Monthly Drop in 15 Months on Fund Outflows*

May 30, 2010, 11:09 PM EDT  


 By Yumi Teso


 May 31 (Bloomberg) -- 



Thailand’s baht headed for its biggest  monthly decline since February 2009 as overseas funds offloaded stocks on  concern political violence in the nation’s capital and Europe’s debt crisis will  slow economic growth.


 “The European crisis may slow exports at a time when domestic  demand is already hurt by the political turmoil,” said Tohru Nishihama,  economist at Dai-ichi Life Research Institute Inc. in Tokyo. “The central bank  will probably have to delay the timing of any rate hike, making it better to buy  bonds. The baht may stay under depreciation pressure.”


 The baht dropped 0.6 percent in May to 32.54 per dollar as of  8:41 a.m. in Bangkok, according to data compiled by Bloomberg. It climbed 0.1  percent today. The currency may fall to around 32.80 in June, Nishihama  said.


 Losses from tourism revenue and investments because of the  rallies may shave about two percentage points from economic growth this year,  Finance Minister Korn Chatikavanij said May 24. The finance ministry, which  estimates the economy may grow 4.5 percent this year, will revise the forecast  on June 29, Satit Rungkasiri, head of the fiscal policy office, said May 26.


 The baht gained today on speculation exporters bought the  currency, according to Disawat Tiaowvanich, a foreign-exchange trader at Bangkok  Bank Pcl, the nation’s biggest lender.


 “The current level of the baht may be a good level for exporters  to sell the dollar,” Disawat said.


 Bonds and Swaps


 The yield on the 3.875 percent bond maturing in June 2019  dropped 17 basis points, or 0.17 percentage points, to 3.33 percent on May 27  from the end of April, according to the Thai Bond Market Association. Domestic  financial markets were closed on May 28 for a holiday.


 The one-year onshore interest-rate swap, the fixed cost needed  to receive a floating payment, was little changed today at 1.32 percent and fell  from 1.56 percent on March 12 when the anti-government rally began. The drop  signals investors pared bets as to when the central bank will increase borrowing  costs.
 The Bank of Thailand, which next meets to review monetary policy  on June 2, has kept its benchmark interest rate at 1.25 percent since April last  year, the lowest level since July 2004.


 “The central bank cannot raise rates anytime soon,” Dai- ichi  Life Research’s Nishihama said. “They probably need to see impact from the  political turmoil on tourism, consumption and investment. So, swap rates may  stay under pressure to fall.”




 --Editors: Sandy Hendry
 %THB
 To contact the reporter on this story: Yumi Teso in Bangkok at  yteso1[at]bloomberg.net
 To contact the editor responsible for this story: Sandy Hendry at  shendry[at]bloomberg.net




Baht Set for Biggest Monthly Drop in 15 Months on Fund Outflows - BusinessWeek

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## crippen

Yes please!! :Smile:

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## chitown

Burn Baby Burn!  ::chitown::

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## planestanley

Sods law transfered a grand sterling yesterday under 47ooo baht the worst ever was getting 69000+ enough for retirement pension qualification 3 years ago

This means apart from virtually zero interst in NonOz banks a retiree to Thailand requires about 1400 pound per month or $2000 Eros Euro1550

Odd as UK only gives  a couple 10% weekly of this to its old age pensioners who have to pay UK prices
Even wel heeld French and German pensioners will feel the pinch as euro bales while for you Stavros the party is over start basting that gyro kebab with hot sauce green chilly and warm pitta bread

These swingsin investment don't undermnete cheap products labour and connection to the Chinese dragon which saw the Baht rise while there was blood in the streets !

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## good2bhappy

no real signs yet

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## the dogcatcher

Sorry, JJ ein't gonna happen. Stupid Thai government thinks there is face in having a strong currency.

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## jandajoy

> Sorry, JJ ein't gonna happen.


One lives in hope.

But, you're probably right.

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## sccrhound

In January of 2009 it was 35 baht to a dollar. Right now it is a little over 32. There is a long way to go to recover.

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## Butterfly

not going to happen unless some speculators will try to dump the THB

with strong fundamentals, they won't take the chance, the BOT large foreign currency reserves is probably keeping them off

an interesting figure though, they had a trade deficit this quarter, that is they had more import than export, so that could help the THB lose value if that trend is persistent

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## corned dog

Its got to happen soon

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## Myofb

> Its got to happen soon


Hmmm. Not sure. I remember 41thb to the USD during the last year of Thaksin. I was sure the THB was going to drop like a stone, but in the 5 past years of turmoil (arguably 5 of the worst unrest in Thailand), we now see 32-odd.


Its all very puzzling, I certainly don't understand it and I'm not sure the Thai Banks is doing very much to keep theTHB up, for face or any other reason, they just don't have that much clout. They could sell all their FX tomorrow and the net impact in terms of currency liquidity would be fanny all. 


The fundamental trading situation is important but I suspect that as a net exporter (except for April which is probably anomalous), Thailand is just weathering the economic storm abroad better than most. Currency strength is always relative, and at the moment, most other currencies are very weak so any net exporter will appear strong.

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## Blake7

Look, it snot a one sided game of the Thais keeping their currency strong.
Has it ever occured to you that it could be the weakness of the Euro/pound/sterling etc?

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## corned dog

Before going to cambodia the other week I went into the bank in chum phae asking to buy some dollar. The fella said he had dollars but wouldn't sell them. Would only buy them Whats that all about !!

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## planestanley

Don't expect lgic or business acumen inLOS ,perhas he was keeping  them for a special aldy or theywere the special $100s printed in former USSR for folks he didnt like more likely couldn't be bothered.

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## Scandinavian

> Its got to happen soon


Haha, if I only got 1 baht for every time I've heard this the last 6-7 years. If the time frame of "soon" is about 10 years, then I'm in!

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## SiLeakHunt

It's not like me to wish anyone ill, but the sooner the baht collapses the better from a purely selfish point of view !

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## chitown

> It's not like me to wish anyone ill, but the sooner the baht collapses the better from a purely selfish point of view !


Not really selfish - the Thai exporters would love to see the baht hit 40 to the US dollar.

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## SiLeakHunt

I was being a little flipant, strong currency good for import, weak currency good for export, I've no doubt the stalls and bars in and around Sukumvit would be teaming once again were the baht to drop and the manufacturing plants that have laid people off because of dropping exports would be sporting "Situations Vacant" signs !

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## Butterfly

^^ everyone would like to see 40 but it's not going to happen anymore unless you guys wouldn't mind we go into an inflationary mode with prices going up by 20%

so much for saving on exchange rates  :mid: 

the price of beer would double overnight  :Razz:

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## FarangRed

I get 39 odd on the Euro today last year 48

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## chitown

> ^^ everyone would like to see 40 but it's not going to happen anymore unless you guys wouldn't mind we go into an inflationary mode with prices going up by 20%
> 
> so much for saving on exchange rates 
> 
> the price of beer would double overnight


Where were the high prices in 1999? 

Also since it is cheaper to import where are the low prices on Western groceries?

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## Butterfly

> Where were the high prices in 1999?


we were in a recession in 1999  :Roll Eyes (Sarcastic): 

recession gap, ever heard of it ?  :Roll Eyes (Sarcastic):

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## Butterfly

> Also since it is cheaper to import where are the low prices on Western groceries?


it's still a luxury so quantity are small and prices high

they would be higher with a higher THB

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## chitown

> Originally Posted by chitown
> 
> Where were the high prices in 1999?
> 
> 
> we were in a recession in 1999 
> 
> recession gap, ever heard of it ?


In 2003 the baht was still relatively weak and there was little to no inflation, so why would you expect it now?

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## good2bhappy

need to get a job?

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## chitown

> Originally Posted by chitown
> 
> Where were the high prices in 1999?
> 
> 
> we were in a recession in 1999 
> 
> recession gap, ever heard of it ?


You may have been in a recession in 1999, but it was one of my best years. I never have followed the world economy much as my economy was always good.  :Smile:

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## Butterfly

it was a good year for everyone Chit, it was the dotboom, remember ?  :Smile: 

Thai were suffering though, and so Argentina and Russia

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## Butterfly

> In 2003 the baht was still relatively weak and there was little to no inflation, so why would you expect it now?


it was still a recession, things started to get moving in 2005 in real terms, not only on paper, and incidentally this is when the THB got stronger and went up very fast, catching up for lost time

also between 2002 and 2005, there was a massive inflow of farangs

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## chitown

> it was a good year for everyone Chit, it was the dotboom, remember ? 
> 
> Thai were suffering though, and so Argentina and Russia



Real Estate Butt, not .com's  :Smile:

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## Thetyim

The pound is at 47.63
That's quite a good improvement overnight.

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## Ghandi

dollar / baht has not moved 

when is this supposed to happen ?

I'll bring over some cash to play with

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## rken

> Look, it snot a one sided game of the Thais keeping their currency strong.
> Has it ever occured to you that it could be the weakness of the Euro/pound/sterling etc?


What he said and the dollar too. Don't look for it to get better soon. Not until a total collapse of the Euro, dollar and pound. :deadhorsebig:

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## Michael

Economics defies logic. It isn't a science.

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## Michael

Logically, the East has a long way to go to catch up with the West.

Where is the enormous expense of welfare, healthcare, pensions and public services  such as education in Thailand?

Errr, nowhere.

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## Michael

My wife has private health insurance that allows for unlimited care in a private hospital, even if she just has a headache, and she will be paid 3,000 Baht per day, private room, and it costs 9,000 Baht every 2 months. How does that work?

Who's paying for it?

Wife's sister booked herself into hospital for a couple of days so she could pay the first month's premium on her new car.

Where does the money come from?  

I'm at a loss.

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## anto2

> My wife has private health insurance that allows for unlimited care in a private hospital, even if she just has a headache, and she will be paid 3,000 Baht per day, private room, and it costs 9,000 Baht every 2 months. How does that work?
> 
> Who's paying for it?
> 
> Wife's sister booked herself into hospital for a couple of days so she could pay the first month's premium on her new car.
> 
> Where does the money come from? 
> 
> I'm at a loss.


 
B9,000 every 2 months for health inchurance .Thats a huge amount .You can not just book yourself into a hospital either .There has got to be a good medical  reason .

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## wefearourdespot

> dollar / baht has not moved 
> 
> *when* is this supposed to happen ?


Soon.
The baht will restart his appreciation against the USD very soon.

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## Bangyai

Baht was at its lowest for over a month this morning at the Bangkok Bank.
48 baht for notes, more for cheques etc.

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## keithgb

48.85baht To The Pound In Uk Today

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## phomsanuk

What do you mean by "drop", do I get more or less baht for my western currency?

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## sccrhound

It's around 31.5 to a dollar corp rates today. 
Should have exchanged more when it was 35 to a dollar

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## Lorenzo

> I was being a little flipant, strong currency good for import, weak currency good for export, I've no doubt the stalls and bars in and around Sukumvit would be teaming once again were the baht to drop and the manufacturing plants that have laid people off because of dropping exports would be sporting "Situations Vacant" signs !


Ideal case is no jobs, domestic demand tanks, weak baht: total buyers market for the farang  ..... as the song goes - party like it's 1999

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## nikster

If you could predict F/X rates, you would not be an underpaid journalist writing articles like that.

You'd be George Soros making $ billions and $ billions. 

That's how we know any article like this is complete and utter BS.

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## chassamui

Currently around 48.7 to the pound.

how come it always nose dives on payday?

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## Michael

George Soros doesn't predict anything. He manipulates everything.  Just like Goldman Sachs and the rest.  Easy to be a gambler when you are controlling the deck.

As I said before it defies logic, therefore the obvious must be true.

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## jandajoy

So what happens next?

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## taxexile

business as usual, baht to continue rising, continued inflow of funds and another interest rate rise.

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## jandajoy

Aus $ up a bit..........

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## StrontiumDog

*Thailand's exchange rate-affected businesses urged to brace for stronger baht
*

*Thailand's exchange rate-affected businesses urged to brace for stronger baht*


  วันอังคาร ที่ 10 ส.ค. 2553 


 
   BANGKOK, Aug 10 – Finance Minister Korn Chatikavanij on Monday   advised operators in Thailand's currency exchange rate-affected   businesses to brace themselves for a further strengthening of the baht.

 Commenting on the continued baht appreciation, he said, the currency  had  strengthened naturally in tandem with economic growth, boosted by a   substantial export increase.

 “Although the Bank of Thailand is able to manage the currency   efficiently, it cannot eventually resist the market mechanism as the   baht is in greater demand than the US dollar in the market,” he said.

 Under the circumstances, operators in businesses affected by the   currency exchange rate business must adjust themselves so that they are   able to manage their business efficiently.

 He said the government would attempt to broaden the economic base in   order to boost the economic role of other sectors such as investment and   local consumption to ensure a higher gross domestic product (GDP)   growth.

 Such an attempt is part of the government’s strategy to reduce   dependence on exports to ease the impacts of the currency exchange rate   fluctuation, he added.

  The baht on Monday rose 31.93/98 to the US dollar, the highest level   since mid-2008. The unit has gained some 4  per cent this year thanks to   steady capital inflows. (MCOT online news)

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## StrontiumDog

*Govt will not intervene in strong Baht
*

*Govt will not intervene in strong Baht*

                                                     The government will  not intervene in the money market  to curb the rising Baht, but will  monitor to prevent high volatilty,  Prime Minister Abhisit Vejjajiva on Tuesday.

Local exporters are adversely affected by the baht's appreciation as  it  has raised the shipping costs by 3-5 per cent, chairman of Thai   National Shippers' Council said.

 Prime Minister Abhisit attributed the baht's appreciation to internal   problems in western countries that had caused their currencies to   weaken.

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## StrontiumDog

*Bangkok Post : BOT will stabilise baht's value
*

*BOT will stabilise baht's value*

Published: 11/08/2010 at 03:12 PMOnline news: Local News
 The Bank of Thailand will stabilise the value of  the baht to prevent it hurting the export sector, Bandit Nijathaworn,  deputy governor of the central bank, said on Wednesday.

 Mr Bandit said the baht’s appreciation was caused by export  expansion, the inflow of foreign direct investment and the weakening US  dollar due to the fragile US economy.

 However,  Thai importers  benefit from a stronger baht as they could  buy at cheaper prices. This would also lead to continual investment in  the country, creating more jobs and boosting domestic spending.

 The  Thai baht stood at 31.95 baht to the US dollar on Tuesday, strengthened from 32.10 baht reported  last week.

 Since the beginning of the year the baht has strengthened 4.3 per  cent, but this had not affected the export sector as exports continued  to substantially expand in the first half of the year, he said.

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