News Forum - Is the Thai Baht falling in value?

[Thaiger]

Yes. And no. Depends on which currency you want to compare it to. Against the mighty USD, absolutely yes. In February this year, the USD was valued at 32.12 baht to the dollar. Now it’s 36.48 baht to the dollar. Good news if you’ve got USD and heading to Thailand. GRAPHIC: xe.com But the story isn’t the same against many of the other world currencies. In fact the USD has surged against almost every currency over the past 6 months, seen as a flight to the ‘trusted’ greenback as financial, stock and cryptocurrency markets crash in a worldwide slow motion […]

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[Prosaap]

In good condition lucky we know a thai never lie 

[MrNovax]

All the currencies are falling in value and have been for many many years.  Inflation, the printing of money, ensures this will be the case.  Its a shame people only look at it in comparison and not in the absolute terms.   

[Tim_Melb]

The US dollar is climbing as it's a go to currency in difficult times ie. the Ukrainian war and its economic impact and this is being amplified by the rising interest rates around the world because of the combined impact of the war and the pandemic economic recovery. The baht has not lost significant ground against any other currency apart from the US dollar. This is a non story apart from the potential benefits for US based expats and tourists in Thailand. 

[Marc26]

26 minutes ago, Tim_Melb said:

The US dollar is climbing as it's a go to currency in difficult times ie. the Ukrainian war and its economic impact and this is being amplified by the rising interest rates around the world because of the combined impact of the war and the pandemic economic recovery. The baht has not lost significant ground against any other currency apart from the US dollar. This is a non story apart from the potential benefits for US based expats and tourists in Thailand. 

Not entirely true

USDTHB is up 7.4% since end of May

CADTHB is up 5.2% since end of May

 

AUDTHB is up a bit less, around 2%

[EdwardV]

In my view, it is necessary to keep the domestic interest rate in tandem with the US interest rate movement to avoid capital outflows and currency depreciation. The Bank of Thailand governor claims the country can raise interest rates at its own pace and does not need to follow the US as capital outflows are not yet a problem. But real data suggests otherwise. Since the day the Fed first raised the interest rate in mid-March to the latest available data on June 3, US$14.1 billion (495 billion baht) left Thailand, causing the Thai baht to depreciate 3.2% to 34.44 baht per dollar. Money must still be flowing out of Thailand because the exchange rate now exceeds 35 baht per dollar. Surely, the governor does not wish to see the Thai baht lose 13.1% of its value, as was the case with the Japanese yen, by not following international interest rate movements?

How far should interest rate hikes go? (bangkokpost.com)

The difference in interests rates between the US and Thailand will only increase between now and the end of the year. It's highly unlikely Thailand will keep up at they are more worried about growth: 

What's happening: Investors see a growing probability that the Federal Reserve could hike interest rates by a full percentage point at its next meeting for the first time in the modern era. In June, the Fed raised interest rates by three-quarters of a percentage point, which it hadn't done since 1994.

Premarket stocks: A truly massive interest rate hike is now on the table - CNN

It's expected the US Fed rate will be 3.5% by end of year, and might even be at 4% by the spring of 2023. 

The question is will Thailand once again (or continue depending on your point of view) buy Baht in order to keep a lid on the currency devaluing?  

[perceblue]

43.19 baht to the UK pound, you`ll be lucky to get that.