Thread: Why has the Baht gained overnight??

1997, the government decides to float the baht......I recall when it was 45 and 47 to the dollar.

Actually, the baht was set to the dollar at 25 to 1 dollar. There was lots of chatter priot to the collapse. The housing market was the biggest reason for the collapse. Just take a look around Bangkok and the surrounding areas and you will see many unfinished buildings that resulted from the crash. Money was flying out prior to the collapse. It was just like in the US now where it seemed any person who had a friend in a bank could get access to money for their projects. As the investment community started to frown on Thailand pressure came on the currency and Thailand's government started blowing loads trying to keep it at 25 to the dollar. I don't know the mechanics of why this is but it happened. As the government lost loads at some point they figured to let if fly in order to save their foreign currency reserves. When that happened the currency flew up like a rocket into the 40s; I guess it touched the 50s for a short period. This basically revalued everything. It killed those who held foreign debt as they needed more baht to pay it off etc.

Not sure about things now but I do worry about overbuilding. You can see a development off of the ChiangRak tollroad in MuangTongThani near Impact which was being built a few years ago which has been stopped. the roads are covered with weeds. This is a recent failure, not a product of 1997. What else is out there?

Originally Posted by Rattanaburi

1997, the government decides to float the baht......I recall when it was 45 and 47 to the dollar.

Actually, the baht was set to the dollar at 25 to 1 dollar. There was lots of chatter priot to the collapse. The housing market was the biggest reason for the collapse. Just take a look around Bangkok and the surrounding areas and you will see many unfinished buildings that resulted from the crash. Money was flying out prior to the collapse. It was just like in the US now where it seemed any person who had a friend in a bank could get access to money for their projects. As the investment community started to frown on Thailand pressure came on the currency and Thailand's government started blowing loads trying to keep it at 25 to the dollar. I don't know the mechanics of why this is but it happened. As the government lost loads at some point they figured to let if fly in order to save their foreign currency reserves. When that happened the currency flew up like a rocket into the 40s; I guess it touched the 50s for a short period. This basically revalued everything. It killed those who held foreign debt as they needed more baht to pay it off etc.

Not sure about things now but I do worry about overbuilding. You can see a development off of the ChiangRak tollroad in MuangTongThani near Impact which was being built a few years ago which has been stopped. the roads are covered with weeds. This is a recent failure, not a product of 1997. What else is out there?

One wonders if there might not be a lesson to be learnt there for some other countries.

[/quote]
One wonders if there might not be a lesson to be learnt there for some other countries.[/quote]

In this case, other countries could have learnt from what happened here 11 years ago, but.........

You may be right about that kicking it off at the start but there are plenty of vacant condos sitting unfinished in BKK from that event. There are some in MuangTong Thani, near Central Ladprao, along the Chaophya river, etc. I'm not a bangkokian so I don't know too much about the vacant spaces. The Central World project was one of them but after five years they finished it off. There a 1997 casualty sitting next to the Nana BTS soi 6. In any other country they would have them finished it or sell it. Land taxes would force them to do this. Here in LOS the rich can sit on their properties without paying anything much in land or property taxes or being threaten by a government tax sale.

That's one thing that pisses me off about the genius Thaksin. Instead of building a million new crappy homes for the poor from scratch he should have done something to ultilise all the stagnant condo complexes and finished them. The housing he could of built would be much better and he could have beautified the city and maximised space. Thailand needs some asthetic laws to force people to take care of their properties - at least in urban areas. JMHO

Originally Posted by Rattanaburi

That's one thing that pisses me off about the genius Thaksin. Instead of building a million new crappy homes for the poor from scratch he should have done something to ultilise all the stagnant condo complexes and finished them. The housing he could of built would be much better and he could have beautified the city and maximised space. Thailand needs some asthetic laws to force people to take care of their properties - at least in urban areas. JMHO

I guess it would have depended on how much money the the banks were expecting to part with the property.

Thaksin did a pretty good job of bailing out the economy without bailing out the banks bad loans.
But of course it did involve a devaluation of the currency.

Nice one the Euro gained big time in the last 2 weeks!!!!!!!!

Now 50.3 to the Thai Baht The Euro has been gaining day by day. Looks like the demise of the Thai Baht at last.

YEEEEEEEEEEEEHAAAAAAAA

^Nope, THB pretty much as is, the Euro on the other hand, has gained against everything - nearing parity with Sterling and rocketing against the collapsing USD.

THB collapse will be soon though...

BKK Andrew: I am aware you are up to speck on the SET, I reckon the Thai Baht will SLUMP on January 9th. No particular reason but I am usually right with my predictions.

Fingers crossed

1997 Asian Financial Crisis


From Wikipedia, the free encyclopedia

Countries most affected by the Asian Crisis.

The Asian Financial Crisis was a period of financial crisis that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown (financial contagion).

The crisis started in Thailand with the financial collapse of the Thai baht caused by the decision of the Thai government to float the baht, cutting its peg to the USD, after exhaustive efforts to support it in the face of a severe financial overextension that was in part real estate driven. At the time, Thailand had acquired a burden of foreign debt that made the country effectively bankrupt even before the collapse of its currency. As the crisis spread, most of Southeast Asia and Japan saw slumping currencies, devalued stock markets and other asset prices, and a precipitous rise in private debt.

Though there has been general agreement on the existence of a crisis and its consequences, what is less clear were the causes of the crisis, as well as its scope and resolution. Indonesia, South Korea and Thailand were the countries most affected by the crisis. Hong Kong, Malaysia, Laos and the Philippines were also hurt by the slump. The People's Republic of China, India, Taiwan, Singapore, Brunei and Vietnam were less affected, although all suffered from a loss of demand and confidence throughout the region.

Foreign debt-to-GDP ratios rose from 100% to 167% in the four large ASEAN economies in 1993-96, then shot up beyond 180% during the worst of the crisis. In Korea, the ratios rose from 13-21% and then as high as 40%, while the other Northern NICs (Newly Industrialized Countries) fared much better. Only in Thailand and Korea did debt service-to-exports ratios rise.

Although most of the governments of Asia had seemingly sound fiscal policies, the International Monetary Fund (IMF) stepped in to initiate a $40 billion program to stabilize the currencies of South Korea, Thailand, and Indonesia, economies particularly hard hit by the crisis. The efforts to stem a global economic crisis did little to stabilize the domestic situation in Indonesia, however. After 30 years in power, President Suharto was forced to step down in May 1998 in the wake of widespread rioting that followed sharp price increases caused by a drastic devaluation of the rupiah. The effects of the crisis lingered through 1998. In the Philippines growth dropped to virtually zero in 1998. Only Singapore and Taiwan proved relatively insulated from the shock, but both suffered serious hits in passing, the former more so due to its size and geographical location between Malaysia and Indonesia. By 1999, however, analysts saw signs that the economies of Asia were beginning to recover.

^ Cool, got that. Nothing to do with the current world meltdown. IMHO Thailand after their recent show of foolishness at BKK Airport, coupled with the cancellations of orders for goods in 2009, I dont think the economy could hold its own in the world economy.

My 2 cents..........or is it 1 cent now

^
The current strength of the Thai Baht which has caused this thread is due to superior Thai financial management. This is a truism Thais all know and the simple fact that we are puzzled by this phenomenon proves how little Farangs understand about Thailand.

^ First I have heard of Thais being SUPERIOR Financial wise. I.E. Besides Thaksin.

Never heard a comment remotely like the above, been ever stated.

Maybe its me thats dumb.

Originally Posted by Thormaturge

The current strength of the Thai Baht which has caused this thread is due to superior Thai financial management. This is a truism Thais all know and the simple fact that we are puzzled by this phenomenon proves how little Farangs understand about Thailand.

I got it, T.

Originally Posted by Thormaturge

The current strength of the Thai Baht which has caused this thread is due to superior Thai financial management. This is a truism Thais all know and the simple fact that we are puzzled by this phenomenon proves how little Farangs understand about Thailand.

Excellent stuff T: nice to see someone understands what's really going on... and can post without emoticans to tell the yanks when to laugh...

Could be the Brit PM they've installed.