GBP vs THB

[Nereus]

If it was confined to the rise of the Baht people may be able to make some adjustments to their lifestyle, and what they spend on living expenses. But here it is a double edged sword. Not only are you getting less Baht for your pounds / dollar, every basic commodity is increasing in price at a seemingly endless rate.
And now our fearless, Oxford educated leader, wants to make a dramatic increase in the basic wage.
Not saying there is no place to increase the the income of the basic population, but, if reports are to be beleived, he seems to think that by increasing the basic wage he can control the appreciation of the Baht.

[Orange]

If it was confined to the rise of the Baht people may be able to make some adjustments to their lifestyle, and what they spend on living expenses. But here it is a double edged sword. Not only are you getting less Baht for your pounds / dollar, every basic commodity is increasing in price at a seemingly endless rate.
And now our fearless, Oxford educated leader, wants to make a dramatic increase in the basic wage.
Not saying there is no place to increase the the income of the basic population, but, if reports are to be beleived, he seems to think that by increasing the basic wage he can control the appreciation of the Baht.

Nereus,
Well in theory he is correct, albeit in a slightly convoluted way. Raising the minimum wage has several effects, but most importantly in a country like Thailand, it is probably going to lead to increased consumer spending (probably on Lao Khao but whatever); increased consumer spending leads to extra tax revenue (VAT) and also tends to lead to inflation. Increasing inflation tends to make the market less certain about a country's economy, and as confidence among the speculators drops, this adversely affects the value of the currency. The key element here are the speculators, who can build or crush a country's economy in one or two big transactions. Recent events seems to suggest that there is an outside influence (China?) trying to control the Asian currencies, or at least trying to influence the way the markets respond. Any other country which had gone through the political turmoil Thailand has would see their currency plummet, regardless of how strong the economy is, and I do believe that the baht could well drop dramatically in the coming months, possibly assisted by the Thai government. None of this really matters though when you start to realise the bigger picture...

[JimmyGreaves]

What's that, We all end up dying anyway

[MrPlum]

Any other country which had gone through the political turmoil Thailand has would see their currency plummet, regardless of how strong the economy is.

I feel the same and figured that Thailand wasn't as exposed as other economies to toxic derivatives, having had its fingers burnt by the IMF and Soros in '97. If the Thai economy has expanded by 9% in the last year, it suggests foreign capital is ever looking for returns and the Thai baht is still appreciating, while bankrupt economies are having to depreciate to reduce their debt. The political strife might be seen as providing investment opportunity and is not unusual considering the country has had many changes of government over the years.

Those sat on properties they can't sell or having already moved their assets over here may actually be in a good position. Instead of western buyers and tourist, they could find Asians and Aussies now have all the cash.

[hhfarang]

^ MrP, I agree with that and with the fact that not only countries (like China mentioned above) seem to be able to manipulate currencies today. Even mega-rich individuals, like George Soros that you as you posted, seem to be able to have undue influence on the finance sector.

[chopsticks]

Is there any logical reason for the big differences in buy and sell rates for GBP vs THB at London and Bangkok airports ?
Approximate figures are currently for 1 GBP : buy for 49 THB sell for 47 THB in BKK but at LHR it's more like 54 and 42 THB. It's always best to do the changing in Thailand but does a wide difference
in buy and sell rates indicate a lack of confidence in a country's currency ?

[Big Boy]

Greed, profit and bonuses.

[Spitfire]

.....while bankrupt economies are having to depreciate to reduce their debt.

Yeah, agree with that. Seems from what I've read that the pound has been deliberately devalued and is being held at present levels.

Remember a month or so ago it nudged up to 51-52 and then suddenly flopped back to 47-48 and has hovered there since? What was that about?

Seems to be a few more manipulators out there other than China, even though they appear to be the most obvious offenders.

Changing money for expats at the ATM is almost financial suicide at the moment. Those that work here and get an income in baht are now the fortunate ones.

Quite a few things are now similar price to what you'd expect to pay for the same thing in the UK now due to that every 50 baht note is over a pound. For example, put a new tyre on my pickup recently, just the standard 'light truck' Bridgestone one you get with the truck when you buy them and it was 3200 baht, thats over 65 pounds or close to 70, probably same as the UK, another random example would be something like a pack of Flora margarine 85 baht (1 pound 80 ish).

Can anyone comfirm?

There are of course some glaringly important exceptions like housing/rent costs or electricity/services and some others too.

Changed 2000 pounds at the banks last month and got roughly 95,000 baht, 2.5 years ago it would have got me closer to 150,000 baht. That's a whopping big differfence.

I work here also so am cushioned to some extent but still feel it. Many others have taken a whopping big hit.

It's still a good deal here but not even close to how good a deal it used to be a couple of years ago.

Just got to ride it out, I guess.

[chopsticks]

Some better than expected figures re. GDP growth coming from UK today and an upgrade on the country's credit rating from one agency.
Now need to wait and see if it has any effect on the exchange rate.
USA about to print more money (Quantitative easing ) so wait and see.

[BaaBaa.]

It's gone up by around half a baht today.
Now I know why.

[MrPlum]

Seems from what I've read that the pound has been deliberately devalued and is being held at present levels.

Remember a month or so ago it nudged up to 51-52 and then suddenly flopped back to 47-48 and has hovered there since? What was that about?

This was just a test of the 50 level. It bounced off and may be repeated, or head south some more. Who knows?

[Korkenzieher]

Hi Plum, I see it as a test of that level. I'd be surprised to see it fall through (but of course, anything can happen). Look at the economic news flow from the UK - I am looking mostly at the Telegraph, for reference. The last thing the UK looks like now, is the basket case that many thought it was only a few months back (though you'll still find plenty clinging onto that side of the fence, for grim death). If interest rates rise then cashflows into Sterling will see it climb. IMHO, there is no present or lasting economic reason for Sterling to be grubbing around these levels.

[miked]

my opinion has changed after recent events and am leaning towards the informed opinion of MrPlum. i think we will will see 40 before 50 baht/pound. long term i would settle for 45. if your working or have an income paid in baht then the exchange rate is irrelevant. if you have been here a number of years then you have had good times. if you can't survive with the present exchange rate then return to your own country, simple. Thailand doesn't want poor farang.
miked

[BaaBaa.]

informed opinion of MrPlum

[miked]

BaaBaa.
yes absolutely. as far as financial matters probably the most informed of any member of this board. BaaBaa try offering constructive comments rather than taking the piss.
miked