Guest aot87 Posted February 24, 2010 Posted February 24, 2010 Does any one know what is keeping the thai bht so strong, or is it just the weakness of other countries in the money market Quote
Guest lvdkeyes Posted February 24, 2010 Posted February 24, 2010 What causes a currency's value is a mystery to me. Quote
macaroni21 Posted February 24, 2010 Posted February 24, 2010 It's more a case of the US Dollar, Euro and Sterling being troubled rather than baht being strong. Generally, Asian currencies are steady, with their economies pulling out of recession early. The baht's value against other floating Asian currencies like the Yen, the Singapore Dollar, has remained quite constant. (I'm omitting a discussion of the Yuan because it's not freely floating). The US Dollar is suffering because prospects of a quick recovery in the American economy look to be receding further and further away. And now a tax revolt is gaining momentum. The US-China trade dispute also seem to be heightening, causing worries about how the Chinese will respond. They are already trimming their holdings of US federal debt. The Euro is making headlines, as we know, not only because Greece is on the precipice of bankruptcy, but because Spain, Portugal, Ireland and Italy aren't too healthy either. Meanwhile, the UK's economy is in the doghouse and the budget deficit is just about out of control. There are local reasons too. Thailand has posted some good figures for the 4th quarter. Its GDP grew 3.6 percent over the 3rd quarter and 5.8 percent compared to 4th quarter 2008. Exports and manufacturing came up strongly. With the chance of interest rates going up and stocks likely to perform well in the coming year, investible funds are flowing into Thailand (and other Asian countries in a similar situation) thus keeping the baht value strong. Quote
Guest Posted February 24, 2010 Posted February 24, 2010 A very good analysis of the situation by Macaroni21. Also, why do you consider the Thai baht to be STRONG, when a Thai worker in a shop earns less than 10% of the salary earned by a UK worker at the prevailing exchange rate? The person in Thailand is doing basically the same job, probably with better customer service. If the UK/US etc continue to run huge deficits, print money & run huge trade deficits, we will soon be wondering why our currencies have been so strong in the last decade. Over the very long term, you should expect market exchange rates to average out at a level where countries have balanced trade. Quote
