News Forum - Thailand News Today | Bank of Thailand scrambles to address plummeting Baht

[Thaiger]

  The Bank of Thailand is scrambling to find sources behind the weakening baht as a meeting is called to discuss its impact. As of this recording, the baht trades at 37.4 against the US dollar. Finance Minister Arkhom Termpittayapaisith says the depreciating currency is adding to the inflationary pressures and vowing to determine whether the decline is linked to the country’s economic fundamentals. The Finance Ministry is set to hold talks with the Bank of Thailand to determine the cause of the baht’s decline. One contributing factor could be external forces, such as the strengthening of the US dollar.  Arkhom says the Finance […]

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[EdwardV]

Arkhom says the Thai baht will adjust accordingly with the US Federal Reserve after it finishes increasing interest rates. But, he says the gap between the US and Thailand’s interest rates has not significantly affected capital outflows. 

The US Fed plans to keep raising interest rates through 2024. That’s a long time to wait. The gap between the rates isn’t the only factor, but it is a large one. You might even argue it’s the biggest factor. The question for the Bank of Thailand is what’s more important. The rate of exchange with the dollar or growth? Adjust accordingly. 

[voyager]

3 hours ago, Thaiger said:

  The Bank of Thailand is scrambling to find sources behind the weakening baht as a meeting is called to discuss its impact. As of this recording, the baht trades at 37.4 against the US dollar. Finance Minister Arkhom Termpittayapaisith says the depreciating currency is adding to the inflationary pressures and vowing to determine whether the decline is linked to the country’s economic fundamentals. The Finance Ministry is set to hold talks with the Bank of Thailand to determine the cause of the baht’s decline. One contributing factor could be external forces, such as the strengthening of the US dollar.  Arkhom says the Finance […]

The story Thailand News Today | Bank of Thailand scrambles to address plummeting Baht as seen on Thaiger News.

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The current, inherent strength of the US dollar shouldn't be confused with any weakness of the Thai baht. Measured as a trade-weighted index against a basket of currencies, the dollar is stronger than it has been for over 20 years. There appears to be no similar basket index for baht, but if measured against Euros, Gold and, say, Singapore $, you'll find it still trading within the same range since around March this year, although showing some weakness.

Why the relative weakness? It might be worth looking at the major Thai imports. A large proportion, by value, is oil and gas. If these are bought on international markets, mostly in US dollars, we might see that is the cause of major outflows of dollars (bought by selling Thai baht), which will filter into balance of trade figures, at some point. Only if that is the case, or they start to see major capital outflows, would the Bank of Thailand have real justification to artificially prop up the baht.

https://www.investing.com/indices/usdollar

But a lot of this may be biased, because I'm a Brit, who has to buy baht with a floundering pound....!!!

 

[Janneman]

On the bright side, Thailand is getting cheaper for tourists. Especially Americans. They get more baht for their dollars. Also exporting goods will get cheaper. Or will fetch more baht, depending on how you look at it.

Importing oil, gas, and luxury goods will be more expensive. 

Just pray that Thai National Bank wont try to intervene again. That costs an enormous amount of dollars, and works for a day or 2. After that the whole of Thailand is poorer, and a few investors are much richer.