Thursday, 13 June 2013

Baht to weaken further?

Steve out at Valley View Restaurant sent me the following update he received from his contact in a local bank on the future of the Thai Baht. I'm sure it will be of interest to many, particularly the last para.

From what we are getting internally in Thailand from the banks is that the outflow of capital will continue due to both profit taking and returning capital (USD / GBP) which would keep it heading lower. Our currency / FX guys are suggesting that it is a shorter term strengthening of GBP which has caused the GBP : THB move recently.

Personally being here and reading the news and talking to people in the banking and export sector I would be on the side of a longer term devaluation of the Baht. At the end of the day exports are becoming expensive and it has been made clear for some time that this needs to be addressed.
What I am doing with clients is making sure that they are not holding too much Baht here when there are good opportunities to move into GBP / USD and make 10% per annum. With guys who are bringing money from outside (Pension / Income / Investment) just make sure they transfer lower amounts until we get a better idea.

Rag - As always this is an opinion not fact but it's an opinion based on feedback from 'reliable' sources so it could be worth your consideration. Of course, if they find a major oil field in Thailand then all bets are off........

Thai Baht v US$ Exchange Rate from 2006

No comments:

Post a Comment