Thai baht/ rate (Bangkok Bank Thailand) falls "below 35

[travelerjim]

It has done it....

The Bangkok Bank rate for US$/Thai baht has fallen thru the 35 level to todays 34.77 for US$100. bills:

USD1 USD : 1 33.91
USD5 USD : 5-20 34.29
USD50 USD : 50-100 34.77

The British Pond/Thai baht continues to fall too....

GBP United Kingdom 66.55

Some news stories say the US$ will weaken more ...
as the Bank of Thailand is expected to lift the 30% rule in April...

Not good news for pension based residents in Thailand...

Many I have talked to have built their budgets on the US$/Thai baht at 35/per US$ value as a lowest point....
but it appears those calcs will need to be changed to US$/Thai baht at 30/per US$. for the near term and possibly as low as 25 Thai baht per US$.

In December 2005 the US$ was getting 40 Thai baht....per dollar ...the "good old days".... :-)

How will it effect the visitors and residents in Thailand ???
How many will need to move to another country???
or move back to their home country ???
or find another holiday destination ???

Time will tell...What do you think ???

Where will the Thai baht be at this years end???
December 31, 2007 ????

TJ

Not good news for pension based residents in Thailand ... Many I have talked to have built their budgets on the US$/Thai baht at 35/per US$ value as a lowest point.... but it appears those calcs will need to be changed to US$/Thai baht at 30/per US$. for the near term and possibly as low as 25 Thai baht per US$.You have highlighted an important but little-recognised point. So many retirees move here on a Do It Yourself basis. They get their retirement visa themselves (often with help from those who have already Done It Themselves). They DIY their retirement financial planning because, frankly, most retirement counselors in their home countries have no idea about, or interest in, retirement abroad. The number of financial advisers here who are interested in servicing the retiree market range from zero to miniscule. One of my friends here is considering servicing just such a market but suspects people won't be prepared to pay for something they believe they can answer themselves (many retirees having come here just because their retirement income won't support them at home, but will here, so certainly aren't going to cut into that to pay for advice). However after 10 years of relative stability, the baht has now moved 12% - 15% against where most retirees budgeted. And the price of boys doesn't remain steady

[x in pattaya]

but it appears those calcs will need to be changed to US$/Thai baht at 30/per US$. for the near term and possibly as low as 25 Thai baht per US$.

Just fear-mongering on your part.

Highly unlikely that it will reach that stage given the historical implications from '97. There is up to a 3 baht difference in rates being offered abroad, due to liquidity issues, and those being offered here. It's above Baht 35/US$ today and Bangkok Bank's rates have consistently been "better" than those posted on, say, Yahoo.

Aside from tourism, this economy depends too much on exports for the government (and others in Asia) to allow the exchange rate to go back to the 1997 rates ...for Thailand, B25 to the dollar..., which would probably precipitate another crisis like that of 1997 when a chain reaction of financial implosions occurred. There's too much big money tied up in the real estate boom and industrial expansion to sit back and allow that to happen.

Now that the "carry-trade" appears to be unwinding, the Yen will probably rise, and for many years the SE Asian currencies followed the Yen, but the Chinese are reluctant about allowing their currency to rise and that's the currency that will matter the most in this neighborhood before long. If necessary, Thailand could play like Hong Kong or the Arab oil states, and just peg the baht to the dollar (or Yuan) and screw the market mechanisms.




From 1985 to 1995, Thailand's economy grew at an average of 9%. On 14 May and 15 May 1997, the baht, the local currency, was hit by massive speculative attacks. On 30 June, Prime Minister Chavalit Yongchaiyudh said that he would not devalue the baht, but Thailand's administration eventually floated the local currency, on 2 July. Opposition parties had claimed that future Thai Prime Minister Thaksin Shinawatra profited from the devaluation[4][5], although subsequent Opposition party-led governments did not investigate the issue.

In 1996, an American hedge fund had already sold $400 million of the Thai currency[citation needed]. From 1985 until 2 July 1997, the baht was pegged at 25 to the dollar. The baht dropped very swiftly and lost half of its value. The baht reached its lowest point of 56 to the dollar in January 1998. The Thai stock market dropped 75% in 1997. Finance One, the largest Thai finance company collapsed. On 11 August, the IMF unveiled a rescue package for Thailand with more than 16 billion dollars. The IMF approved on 20 August, another bailout package of 3.9 billion dollars. The baht has only recently in November 2006 reached pre-crisis highs of 36.5 to the dollar.

en.wikipedia.org/wiki/Image:Small_FX_Thailand_US_10yrs.png (http://en.wikipedia.org/wiki/Image:Small_FX_Thailand_US_10yrs.png)

[Smiles]

"X-in-Pattaya"???? Hmmmm ... seems like there has been some rock-liftin' activity going on somewhere. :cyclops:

But ... agree to a large extent with the analysis and good thing you said it as I cannot rise to the occasion on economic issues, and my motivation to do so is based more on ~ in this case ~ 'wishful thinking' than any real knowledge.

Cheers ...

[travelerjim]

but it appears those calcs will need to be changed to US$/Thai baht at 30/per US$. for the near term and possibly as low as 25 Thai baht per US$.

Just fear-mongering on your part.

Highly unlikely that it will reach that stage given the historical implications from '97. There is up to a 3 baht difference in rates being offered abroad, due to liquidity issues, and those being offered here. It's above Baht 35/US$ today and Bangkok Bank's rates have consistently been "better" than those posted on, say, Yahoo.

-------------------

Thank you X in Pattaya for your analysis...I appeciate the historical perspective..and hope you are right!

"Fear mongering" ...Not true...No such intent...on my part.
I retired 6 months ago...and have watched as you have ....
over past 8 years the ups and downs of the Thai baht vs US $.

December 2005 baht was over 40+ to US$

Today the Thai baht closed at 34.55 per US$ ($100.00) ...YES 34.55 !

Bank of Ayudhya website:

http://www.krungsri.com/eng/exchange01.aspx .

In planning one's budget and retirement, I believe it important to look at variables - such as "What happens to my budget?" ...
IF there is further lowering of the Thai Baht from the level of 35, to a possible 30, or even the "unthinkable" 25 baht per US$.

This is Thailand....and nothing is for sure...even in the USA...
or elsewhere for that matter - when it comes to the uncertain economic times I believe we are facing worldwide.

I do not call it "fear mongering" ..I do call it being prudent and realize change can and does happen...even in Thailand.

TJ

"X-in-Pattaya"???? Hmmmm ... seems like there has been some rock-liftin' activity going on somewhere.Indeed - is this our old chum who was fired for singing Judy Garland songs in the company showers and whose most famous posting of all time (on ThaiGuys Forum) was entitled "Am I a homophobe?" (Majority answer: Yes)? The know-it-all tone plus constant "Aren't I fluent in Thai" references suggest that indeed it is. Teaching plumbing to the terrorists in the Middle East seems to be over for now

[x in pattaya]

whose most famous posting of all time (on ThaiGuys Forum) was entitled "Am I a homophobe?" (Majority answer: Yes)? The know-it-all tone plus constant "Aren't I fluent in Thai" references suggest that indeed it is. Teaching plumbing to the terrorists in the Middle East seems to be over for now

I don't think I ever posted on ThaiGuys. Not even sure what that is. PattayaGay, Dreaded Ned, even Dreaded Gaybutton, but I don't recall ThaiGuys. Obviously your "life" has a more narrow focus than mine and your memory is less burdened by social contact with real humans, thus allowing you to catalogue the really important things like message board drivel, so I won't challenge your FBI-like record keeping, however.

Accusing me of a "know-it-all tone" as you whack your leather boots with your least pliant whip seems suitably ridiculous. I can't imagine who you were in any of your previous message board incarnations. Apparently you feel the need to reappear in different guises, dragging your hate filled baggage along with you. "terrorists in the Middle East..." again the narrow focus which appears to be informed by Hollywood generated thrillers. Plumbing??

Never have claimed fluency in Thai. Something that I am still struggling with. I did once refer to Bangkok as Krung Thep which set off someone called the Colonel, I believe. I suppose you could be him, but it's hard to imagine the Colonel's liver could have remained viable for that many years given his penchant for daily lubrication.

I am sort of amazed that I would warrant such a well-preserved and nurtured resentment for such a long time. I wouldn't have thought anything that I said or anyone else said for that matter, on these message boards would have been that worth remembering, much less inspiring such an emotional fit after all these years. You give me more credit that I would give myself.

Suggesting you "get a life," would be sadly trite, but in all seriousness you might consider getting a little exercise, getting out from behind the Commodore keyboard for a few hours a day and getting a colonic irrigation to flush out some of the toxins that you've been retaining way too long.

Wishing you a speedy recovery and my thanks for keeping me in your thoughts for all these years.

Excellent post, X. You're OK by me.

[Smiles]

:compress: :compress: :compress: :compress:

In the interest of fairness & full disclosure: 'Homintern' = 'The Colonel'.
Just so we know the lay o' the land.

Cheers ...

[x in pattaya]

n planning one's budget and retirement, I believe it important to look at variables - such as "What happens to my budget?" ...
IF there is further lowering of the Thai Baht from the level of 35, to a possible 30, or even the "unthinkable" 25 baht per US$.

This is Thailand....and nothing is for sure...even in the USA...
or elsewhere for that matter - when it comes to the uncertain economic times I believe we are facing worldwide.

I do not call it "fear mongering" ..I do call it being prudent and realize change can and does happen...even in Thailand

Yes, if you are still in the planning stage and have the means to do so, you should be prudent and consider the worst-case scenarios.

There are, however, many people who are already retired and, as you've said, facing the unpleasant reality of the exchange rate not fitting their overly optimistic expectations. It is an unfortunate reality that many farang living in Thailand are very worried about their future ... worry that can be compounded by loneliness, a dependence on alcohol, failed "relationships," etc. (A visit from the Colonel spewing his bitterness hither & yon bears that out). For those people, living on the edge of despair (which I know sounds overly dramatic until you consider the number of people here stepping off balconies or drinking their livers to mush)... your comment about the baht plummeting to B25/US$ is frightening.

Stick to messages about Vaseline, a topic about which I readily concede your expertise, rather than making speculative journeys into the unknown.

While you are congratulating yourself on being Ms Prudence, you are unnecessarily spreading a doom-and-gloom message for those who have few options left to alter their financial situation.

[Bob]

No harm at all in speculating where the baht will go. Come to think of it, some people are betting billions on it (call them speculators if you wish but they know a bit more about it than you). Last I knew, Berkshire Hathaway had 22+ billion of its own dollars hedged against the dollar and I do believe Warren Buffett is nobody's fool.

Fear mongering? Come on, he's only asking the question. Ten years ago (hmmm....not all that long ago in the scheme of things) it WAS 25 baht per dollar. And within that same time frame, 52 baht to the dollar.

In one presumes that ultimately the Thai baht will follow the Chinese yuan and presuming a large group of economists are correct in repeatedly saying that the Chinese yuan is 40 to 60% undervalued to the dollar, the only question to me is when the Thai baht hits 25 to the dollar, not if. The excess indulgence of the US is going to come home to roost some day - one just can't forever have gargantuan trade deficits - and the indulgence will be "cured" by a devaluation of the dollar internationally. Just a matter of time.

So, to me, not planning for a significant currency (dollar) devaluation would be foolish. If that scares some expats, so be it.
All I ask is look below your balcony as I really wouldn't fancy you diving on me.

P.S. In my view, the only thing that would stop the process from occurring is if the Thai government totally screwed things up economically (and, in view of the actions since the coup, I suppose that there is some real chance of that happening).

I am sort of amazed that I would warrant such a well-preserved and nurtured resentment for such a long timeResentment? Good heavens, dear boy, I'm only here for the laughs, and I welcome the return of another clown - in your case Clown #69 or hok sib gaew
http://upload7.postimage.org/240108/dancing_clowns.jpg (http://upload7.postimage.org/240108/photo_hosting.html)