Baht Strengthening Against US Dollar

[Gaybutton]

For the past several weeks, the baht seemed to be weakening slightly and inching its way toward about 38.5 to the US dollar. Since Friday the baht has reversed the trend and is now getting stronger. This morning the exchange rate opened at 37.92 to the dollar and closed at 37.90.

 

For many years the baht held steady at about 45 to the dollar, meaning you would receive 45000 baht if you exchanged US $1000. Now, if you exchange US $1000 you'll receive 37900 baht, a difference of 7100 baht. That is approximately a US $175 difference per US $1000 exchanged.

 

I am not an economist, so I don't have any idea as to the cause of the current baht strengthening, but somehow I can't help but feel that lack of confidence in the US dollar has something to do with lack of confidence in the current occupant of the White House.

[Gaybutton]

Today, July 4, I did not check the opening exchange rate. As of 1:45 PM, Thailand time, the exchange rate is 37.76. If I remember correctly, that's about the weakest the dollar has been against the baht in years.

[Guest Hedda]

The last thing that Thailand needs is a strong Baht, which will only serve to further damage its export markets, weakening the entire economy. It's already running a trade deficit, and with labor costs here much higher than China or Vietnam, the outlook is not very promising.

 

You may have perhaps seen the latest figures from the Thai Board of Investment (BOI) which shows that foreign investments in Thailand dropped a whopping 62% during the first five months of 2006.

Most of that money got shifted from Thailand to other asian economies.

 

The BOI tried to blame the dramatic drop in investments on the continuing political uncertainties here, but Thailand is caught between a rock and a hard place, with a relatively strong currency trying to compete with much cheaper money and labor in many neighboring countries.

 

 

 

 

[Gaybutton]

The last thing that Thailand needs is a strong Baht, which will only serve to further damage its export markets, weakening the entire economy. It's already running a trade deficit, and with labor costs here much higher than China or Vietnam, the outlook is not very promising.

 

You may have perhaps seen the latest figures from the Thai Board of Investment (BOI) which shows that foreign investments in Thailand dropped a whopping 62% during the first five months of 2006.

Most of that money got shifted from Thailand to other asian economies.

 

The BOI tried to blame the dramatic drop in investments on the continuing political uncertainties here, but Thailand is caught between a rock and a hard place, with a relatively strong currency trying to compete with much cheaper money and labor in many neighboring countries.

 

Do you think Thailand is about to be hit with an economic tsunami? I have been predicting a baht crash for the better part of a year-and-a-half now. Despite the fact that precisely the opposite seems to be occurring, I have a feeling this will be short-lived and something dramatic is likely to happen.

 

We'll see. For the record, the exchange rate closed today at 37.63 baht to the US dollar.