Baht Expected to Weaken to 37 to US Dollar in Near Future

[Gaybutton]

Baht Likely to Weaken Further in Near Future: KRC

 

BANGKOK, Mar 4 (TNA) –

 

The baht is likely to weaken to around 37 to the US dollar in parallel with most currencies in the region, according to Kasikorn Research Center.

 

The leading think tank said the baht had depreciated to a 2-year low of around 36.30 to the dollar this week in response to news reports that the Bank of Thailand (BoT) had intervened to stabilize the baht's value.

 

The BoT’s move was made in harmony with those of other Asian central banks, which had attempted to rein in the volatility after many currencies in the region weakened to their lowest point in many years.

 

In the near future, KRC said, the baht is projected to fall to around 36.5-37 to the dollar while the greenback is likely to strengthen against other currencies.

 

More noticeably, the weakening of baht this year is absolutely different from that in 1997 as the currency depreciation does not result from the weakness of Thailand’s economic fundamentals, which are currently much stronger than in 1997 when the economic crisis erupted.

 

The balance of payments and the current account balance are likely to record a surplus for this year. At the same time, Thailand’s foreign debts remain low, and international reserves exceed $100 billion.

 

(TNA)

[Guest fountainhall]

the currency depreciation does not result from the weakness of Thailand's economic fundamentals, which are currently much stronger than in 1997 when the economic crisis erupted.

 

That's for sure! By June 1997, the government of the day had squandered all the country's foreign exchange reserves in a futile attempt to prop up the baht at an unsustainable level in the face of massive overseas speculation. This was because so many companies had most of their borrowings in US dollars, more than a few having connections to senior parliamentarians, of course.

 

So when crunch time came on July 2 and the baht was devalued, there was nothing in the kitty. Over six months the baht collapsed to less than 1/2 its value, enter the World Bank, austerity and massive interest rate hikes. I doubt that will happen this time.

[Guest Astrrro]

Is there someplace where "baht futures" are listed? That would be helpful when determining whether to do a big wire transfer now or to wait a few months.

[KhorTose]

Is there someplace where "baht futures" are listed? That would be helpful when determining whether to do a big wire transfer now or to wait a few months.

 

Better then doing that why not open a dollar account with Bangkok Bank. The account will be with HSBC (a little shakey, but strong), and your cash can be transferred to your Baht account with minimum charge, as needed.

[Guest fountainhall]

The account will be with HSBC (a little shakey, but strong)

 

With its strong regional base, most people I have spoken to confirm that HSBC will come out of the financial sector bloodbath relatively unscathed in comparison to most other worldwide banks.

 

I agree with KhorTose's suggestion. If you buy a forward contract, you pay a premium and are locked into a specific rate for delivery on a specific date. With a US dollar account, you have much more control by choosing how much to convert at any one time.

[Gaybutton]

The following appears in the BANGKOK POST:

_____

 

KRC: Baht May Weaken Further

 

Published: 8/03/2009 at 11:15 AM

 

The baht next week would likely depreciate between 36.00 and 36.30 baht to a US dollar, according to Kasikorn Research Centre (KRC)'s forecast.

 

The Thai currency may weaken in parallel with other regional currencies, but the Bank of Thailand (BoT) may intervene to lessen fluctuation in foreign exchange rates, the think tank said on Sunday.

 

External factors that may affect the baht value include unemployment outside the agricultural sector and economic figures to be released in the US together with the movement of the US dollar.

 

Moving to the Stock Exchange of Thailand (SET), the KRC expected the market to follow other foreign markets and move in a narrow range next week, with low trading volume.

 

The support level should be between 400 and 380 points while its resistance level should be around 423 to 429 points.

[Guest HeyGay]

So where will that leave the pound? I have to go to the UK soon. Today I got, 1 GBP = 50.7497 THB to the baht. Will it go up or down 55 or 48 to the pound?

[Gaybutton]

So where will that leave the pound?

I don't think any of us can accurately predict what will happen with specific currencies. The pound has remained just about the same against the baht for at least a week now. Maybe someone who has better knowledge about currencies, and that would be just about anyone, can make a better guess, but my own guess is that if the baht itself will weaken, then the pound will strengthen against it by default, unless the pound weakens on par with the baht.

[Up2u]

Today's actions by Chairman Bernanke and the Fed have caused an across the board weakening of the USD. At the moment of this posting the exchange rate was 1 USD = 35.67 THB. Hopefully, this will be a short-term trend and the baht goes over 36 again and on to 37!