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Thailand’s baht has weakened against the US dollar this year. On Wednesday, the conversion rate was 36.73 baht per dollar, having been weakened by 8.8% this year. The baht hit its lowest point in 15 years in July, when the rate was 36.945 baht per dollar. The US dollar has gotten stronger due to a drop in many countries’ foreign reserves, including Thailand’s. Thailand’s foreign reserves fell from US$278 to US$240 billion earlier this year, according to the Bank of Thailand (BoT). However, the kingdom’s foreign reserves remain high when compared to many countries, it said. Last week, it was […]

The story Thailand’s baht weakens against US dollar as seen on Thaiger News.

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From the article:

The BoT said the fall in Thailand’s reserves has been due to the valuation of assets in multi-currencies that were converted into dollars. Foreign investors have still bought about 160 billion baht net of Thai assets so far this year. The BoT said it hadn’t seen any unusual capital movements, and the baht’s weakness is mainly driven by the dollar’s strength. It noted that Thailand’s financial stability is still going strong.

Seems there is a distinct difference of opinion. From the Bangkok Post resident economist: 

The real culprit is less export revenue -- $2.924 billion less to be exact. Import revenue in July is 11% less than that of June. This is the fact that no Thai authorities want to mention. The world economy, particularly China's economy, is slowing down.

As for that bump in the Baht last month, the CW is the Bank of Thailand intervened:

In July, the Thai baht depreciated 3.6%. But things turned around in August despite more outflows; the currency miraculously bounced back. By Aug 26, the Thai baht appreciated 2.5%, compared to end-July. This is unnatural and against economic theory. I can only guess that the Bank of Thailand might have intervened heavily in the exchange market. The price of this silly maneuver is large foreign reserves loss. It is silly because the Bank of Thailand can never suppress the world foreign exchange market. Whatever action the bank takes will only have short-term effects. Ten days later, the Thai baht depreciated 2.5%. 



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Interest rates in the US are going up. Which means the dollar is strengthening. Not only against the baht but also against the euro. I guess the baht/euro rate hasnt changed. So the baht isnt weakening.

The bank of Thailand tried to intervene? They play the forex game too? Fools. It's a game they cannot win.

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