News Forum - Economists foresee 38 baht to 1 US dollar this year

[Thaiger]

With the US dollar strengthening and Thailand’s struggling economy, economic experts predict the baht may fall to 38 to the dollar by the end of this year. The head of capital markets research for Kasikorn Bank believes the baht will continue its instability along with the global money markets as a result of domestic and international factors. While the US dollar continues to grow in value against foreign currencies due to the hawkish continued federal fund rate hikes, the Bank of Thailand’s Monetary Policy Committee is likely to boost its benchmark policy rate from 0.75% to 1% in a meeting […]

The story Economists foresee 38 baht to 1 US dollar this year as seen on Thaiger News.

Read the full story

[TheDirtyDurian]

Yes please. Hoping for £=$ before the year end.

Bring it on!!

[riclag]

As a American “living here” this is so sweet! But looking back I wish I could have brought over my $ to purchase a house  now instead of 2019  . I would of saved close to $20k. Who would of known!

Another sweet thing about “living  here” ,govt  soc security is expected to give a very substantial cost of living increase because of inflation! Between 8 -10%. 

 

 

[TheDirtyDurian]

2 minutes ago, riclag said:

As a American “living here” this is so sweet! But looking back I wish I could have brought over my $100k to purchase a house  now instead of 2019  . I would of saved over $20k. Who would of known!

Another sweet thing about “living  here” ,govt  soc security is expected to give a very substantial cost of living increase because of inflation! Between 8 -10%. 

As a British person paid in Dollars, it's even sweeter....

[BigHewer]

The BOT has shown some appetite in interest rate increases, but it won’t be enough to stem the tide. 

As long as China is asleep and US economic data is bad, it’s looking grim for the baht. I think the low point will be prior to the mid terms in November.

[Janneman]

A lower baht isnt that bad. Makes things cheaper for tourists, especially for Americans. It also strengthens Thai exports. They get paid in dollars, expenses are in baht.

Imports will be more expensive. Oil, gas, western cars, most western luxury goods.

BOT can intervene by buying dollars. Most stupid thing to do. Works for 2 days, and then the baht drops again. But then BOT has a lot less dollars than they used to have. Raising interest rates is another possibility. People wont like that as all locally produced goods will get more expensive. Unhappy people, and upcoming elections, dunno.

If I were BOT I would do nothing for 3 months. And then slowly raise interest rates. But I'm not BOT And the baht is dropping! We have to do something! Save the country!

[Naanlaew]

Although I do not claim to be an economist, I see 38 by the end of the month. 

[DoUKnowWhoIAm]

5 hours ago, Thaiger said:

predicts an even higher policy rate increase for the bank of Thailand to 1.75%. In fact, he believes it will reach 2.5% by the end of 2023

The condo market is doomed.

[JamesR]

8 hours ago, TheDirtyDurian said:

Yes please. Hoping for £=$ before the year end.

Bring it on!!

Me too as it will force the Bank Of England to raise interest rates yet again and so I will get more income per month on my savings.

The £ has not moved that much against the Baht. 

[Mazz11]

I am not very knowledgeable in economics so maybe someone can give me some clarification.

I understand that the majority of international currencies are linked to the USD to some degree but I have also been told that other currencies also rise and fall independently (to a degree) against each other. 

If this is true is there a case for the AUD to become stronger against the THB over the next 12 months if Australia manages to avoid a serious recession.

[HiuMak]

11 hours ago, Janneman said:

A lower baht isnt that bad. Makes things cheaper for tourists, especially for Americans. It also strengthens Thai exports. They get paid in dollars, expenses are in baht.

Imports will be more expensive. Oil, gas, western cars, most western luxury goods.

BOT can intervene by buying dollars. Most stupid thing to do. Works for 2 days, and then the baht drops again. But then BOT has a lot less dollars than they used to have. Raising interest rates is another possibility. People wont like that as all locally produced goods will get more expensive. Unhappy people, and upcoming elections, dunno.

If I were BOT I would do nothing for 3 months. And then slowly raise interest rates. But I'm not BOT And the baht is dropping! We have to do something! Save the country!

It will costs more for Thais to travel out. 

[Scarface]

A genius prediction, this ''economist'' is wasted at K Bank with these type of predictions and analysis.

[BigHewer]

On 9/25/2022 at 8:59 AM, Mazz11 said:

If this is true is there a case for the AUD to become stronger against the THB over the next 12 months if Australia manages to avoid a serious recession.

Definitely Mazz, though there are a lot of ifs and buts. It depends how economic indicators react to the RBA’s rate hikes, which will in turn influence future decisions on rates. 

The effects of the latest hike will start to be felt in November / December, just in time for the Santa surge. If Aussie consumer spending is unaffected and inflationary pressure remains, then yes for sure the $AUD is headed north vs the Baht.

From the news article at the top of the thread, it seems the BOT’s main focus is damage limitation mixed with a belief that “every little thing gonna be all right” when the tourists come back. This tells me that they won’t be so aggressive in their monetary policy: do a bit, wait and see.

So I guess the short answer to your question is “yes”.

[EdwardV]

Falling currencies increase inflationary pressures, forcing policymakers to turn more hawkish, tightening financial conditions, and crushing demand. Central banks will find it hard to break this doom loop. Their pool of FX reserves for intervention purposes is also limited - even the Bank of Japan will be aware its $1.3 trillion stash won't last forever if it follows last week's historic dollar-selling intervention often enough. And talking of doom loops, if Asian central banks sell chunks of their U.S. Treasuries holdings to support their domestic currencies, U.S. yields rise, Treasuries are more attractive, investors pile in, and the dollar strengthens. 
 

https://www.reuters.com/markets/europe/global-markets-view-asia-graphic-2022-09-25/

I will be surprised if the Baht doesn’t blow though 38 next month let alone by the end of the year. The gap between the BOT interest rate and the US Fed is widening. Thailand needs to offset the pressure and if it’s not going to be by raising rates it has to come from somewhere else. Those options are limited and mostly out of their control. 

[Janneman]

On 9/25/2022 at 12:11 AM, HiuMak said:

It will costs more for Thais to travel out. 

Only if they travel to dollar-countries. Baht/euro rates are relatively stable. So traveling to the euro zone wont cost more. Apart from more expensive tickets due to the rising cost of kerosine.

[TheDirtyDurian]

Cable parity by the end of the week....