Stories tagged with money
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Baht onshore/offshore rates equalize
The Thai baht onshore and offshore rates have now equalized following the lifting of the reserve on March 3, said Bank of Thailand (BoT) governor Tarisa Watanagase.
The 30 per cent withholding measure was imposed in 2006 to stem the baht’s speculation due to the gloomy economic outlook back then, and was a bonus for foreigners bringing in currency and utilizing the higher onshore rates.
Khun Watanagase said that the baht had equalized automatically, ‘without intervention’, following the reserve lift and that the economy had improved.
Onshore traded baht is now a lot closer to offshore traded baht since the measure was scrapped, with onshore and offshore dollar transactions at about 31.41 and 31.42 respectively.
Previous figures at the offshore rate of 31.42 baht to the dollar would have seen an onshore rate at roughly 34!
Thailand’s international reserves have also risen sharply in the last couple of years - at US$108 billion today compared with $67 billion at the end of 2006.
Posted by: Andrew on 24 Apr 2008, 20:54 -
Less baht for your dollar
Tourists to Thailand this year will find themselves getting less value for their money, as the baht continues to strengthen against foreign currencies. Easing of restrictions on capital controls on March 1st are likely to accellerate this appreciate, with the baht expected to soon hit 30 to US1$. This is a 20% gain in 18 months.
The original capital controls were implemented in December 2006 to guard against speculators as the baht continued to strength. Unattractive economic factors in the US have caused investors to flood the Thai markets with money, causing a steadily improving baht to dollar exchange rate that was hurting the country’s export competitiveness.
The Thai baht has appreciated at a much stronger rate against the floundering dollar compared to other Asian currencies. The introduction of capital controls had created a dual rate with the offshore exchange rate set at 31 baht to a dollar while rates given here in Thailand were a more favourable 33.5. The two will now merge but the Bank of Thailand is expected to spend several billion baht in foreign reserves to manage the appreciation gradually.
The baht has also moved up to its strongest exchange rate against the British pound in more than five years, reaching 63 baht to £1. The net result is that monies exchanged are devalued by approximately 8% year-on-year and regular visitors will certainly notice the increased expense of their holidays.
Posted by: Andrew on 06 Mar 2008, 11:40