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Thai baht performs worst of all Southeast Asian currencies

Neill Fronde

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Photo by Peter Hellberg for flickr

Among common currencies in Southeast Asia, the Thai baht was the worst performing in the first quarter of 2021, mostly due to Covid-19’s effect on tourism in Thailand.

This week the baht hit its lowest point in half a year, falling 4% against the US dollar to 31.24. The decline was the sharpest in all of the Southeast Asian nations. The Indonesian rupiah fell 3.4% and the Malaysian ringgit fell 3.1%, while the Philippine peso and Singapore dollar dropped 1% and the Vietnamese dong basically held steady. Kyats, the Burmese currency did plummet further, 5.6%, following the military coup in Myanmar on February 1, but it’s not considered a common currency.

Thailand’s depreciation is heavily due to the economic downturn as a result of the pandemic which has all but killed Thailand’s tourist-heavy economy. With borders closed, the drop in foreign tourism pumping money into the economy has left a glaring hole. Before Covid-19, in the third quarter of 2019, Thailand held a surplus of US$11.5 billion baht. By the third quarter of 2020, the surplus had fallen to $6.6 billion, and by the end of the year, it had slid to a deficit of $1.4 billion.

Thailand had been bolstered by the surplus and by the constant influx of tourist spending supporting the economy. Tourism money fell to $742 million due to the pandemic border closure, just 5% of the equivalent period last year. The government is hoping to restart the tourism economy and pump more Thai baht into the country with a variety of actions to shorten quarantine, reopen key tourist locations like Phuket, and eventually allow in vaccinated travellers without any quarantine.

Many are still unsure of Thailand’s stability, with investors, importers and exporters still having doubts. The Finance Minister believes there’s no need to panic, as he was expecting a backlash when the Thai baht hit a 7 year high. They have acted by increasing investment limits to US$5 million for Thais to buy foreign securities, up from US$200,000 and loosened restrictions on foreign currency deposits.

SOURCE: Nikkei Asia

 

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19 Comments

19 Comments

  1. Avatar

    James R

    Friday, April 2, 2021 at 8:16 pm

    If the baht is low then it should help tourism and attract more visitors due to a lower cost for the tourist.

    Same for exports which is 75% of Thailands GDP.

  2. Avatar

    Roger Bruce

    Friday, April 2, 2021 at 8:39 pm

    Sorry could not happen to a more deserving country
    Not effect to poor much or the average people with little money
    But hurts the powerful rich and corrupt
    So Baht keep dropping it is payback time for Rich and corrupt
    Hope not affect the poor people though

    Good Luck Thailand

  3. Avatar

    toby andrews

    Friday, April 2, 2021 at 9:47 pm

    B43.5 against the GBP.
    It is their own fault.
    They have been propping up the baht for years with their manipulations.
    However Thailand’s taxes on items that foreigner’s might buy is so high now, Thailand is an expensive country.
    And recently they have increased the tax on beer to 22 percent, plus a tax on alcoholic content!
    I used to buy a 37.5 cl of wine from the Seven/Eleven at B80 to drink at a stall that served spaghetti.
    No more. That same bottle is now B120, due to the taxes.
    A big glass of wine here in Cambodia in a bar is B65.

  4. Avatar

    EdwardV

    Friday, April 2, 2021 at 11:12 pm

    James, tourism is part of exports when calculating a nations GDP. Hence why Thailand’s trade surplus has been virtually wiped out. Add in the fact most other exports as a total have been pretty flat since the start of the pandemic. Some sectors like Agg have been doing well, but others have not. Not Thailand’s fault, most economies exports have taken it on the chin with world consumption pretty much off line from the pandemic. The lower Baht isn’t going to help all that much because of a few reasons. First world consumption in general peaked in 2019 and because of world demographics it will only go downward for foreseeable future. Next as long as Thailand has a quarantine in place, tourism will not be a major factor in GDP. Even when it’s completely dropped, it’s going to take 2-3 years for it to rebound in a major way. Last, the Baht hasn’t dropped that much, not enough to be driver of economic growth. The last sentence of the article is interesting. Thailand is allowing a huge jump in capital outflows, which lessens upward pressure on the Baht. Basically they are trying to drive exports and economic growth through depreciation of the Thai currency. It’s going to get much lower in the future, hope you don’t have a lot of money in Baht.

  5. Avatar

    Arthur Moore

    Saturday, April 3, 2021 at 12:32 am

    The Baht has been massively over valued ever since the Thai government dis-connected it from the US$. At the moment its trading at between 20% to 25% more than it should.

    Even before covid the number of tourists was in decline including the Chinese. The same holiday could be bought for far cheaper in the countries Thailand is in competition with, and those countries have not over developed locations as Thailand has.

  6. Avatar

    Kim

    Saturday, April 3, 2021 at 10:41 am

    People have been talking about the baht depreciating for the past 2 years, however, the fact remains that it has not really depreciated a lot. If we see Euro 1 = 40 bath as we did prior to 2019, then I believe more tourist would consider Thailand for their next holiday.

  7. Avatar

    Ben

    Saturday, April 3, 2021 at 2:42 pm

    At last the thai governing elites seem to get it. The strength of the THB is hurting the countrys exports and tourism. Thgey were all into having only the rich visit Thailand. What they called something like “high-quality” tourism. “high-quality” tourism was a fashionable word among certain circles.

  8. Avatar

    Jesus Monroe

    Saturday, April 3, 2021 at 5:24 pm

    Thailand has a major headache going forward…….they need to be mighty innovative……. they’re gonna need a super smart and creative guy sailing this ship to stop it hitting the iceberg

  9. Avatar

    James R

    Saturday, April 3, 2021 at 7:31 pm

    Toby

    Who would want to go all the way to Thailand and sit outside drinking bottles of beer from 7/11?

    Yes it is cheaper in Cambodia but who wants to go and stay in backward Cambodia?

    If you can not afford to live in Thailand do not knock people who can.

    Why not go to Pakistan, I am sure beer is much cheaper there than Thailand and Cambodia.

    I nipped over to Cambodia on a visa run once and it is full of kids pestering you and trying to fleece you, not for me.

  10. Avatar

    TS

    Saturday, April 3, 2021 at 8:39 pm

    great news! i hope the downward trend continues.

  11. Avatar

    toby andrews

    Saturday, April 3, 2021 at 10:36 pm

    James R I can go wherever I want. I have the money to go wherever I want.
    I do not work and I do not need to work. I have been in Cambodia for a year now, and never worked.
    I do not sit outside of Seven/elevens in Thailand. If you knew what you are talking about you would know there are very fey seven/elevens in Thailand with seats outside.
    I can afford to live in Thailand at top price.
    The Bistros in Cambodia are luxurious compared to the Thai bamboo shacks in Thailand that charge three times more!
    You do not know me so shut your stupid mouth. You went to Cambodia once and did not like it, because some kids pestered you.
    That tells me a lot. You have not spent much time in the Orient.
    I’m guessing by the timing of your post you are not even in the Far East! I also guess you are unemployed living in a British council block with your mother.

  12. Avatar

    LondonAl

    Sunday, April 4, 2021 at 3:13 am

    When I first visited Thailand it was 75 baht to the UK pound, happy days.

  13. Avatar

    TS

    Sunday, April 4, 2021 at 8:20 am

    hope the baht goes into free fall so I can afford the extra 4 baht 7/11 gets for a beer. Then I’ll find a comfy piss stained cement public bench on which to drink it. ah, livin’ the life!

  14. Avatar

    Hi

    Sunday, April 4, 2021 at 2:59 pm

    One issue that is not talked about here is the annual air pollution.

    • Avatar

      Thaiger

      Sunday, April 4, 2021 at 4:23 pm

      Good lord, we report on it incessantly! https://www.youtube.com/watch?v=PtgZKEvYixg Here’s just one to check out… many more videos on our YouTube channel and stories on thethaiger.com about the issue.

  15. Avatar

    James R

    Sunday, April 4, 2021 at 9:57 pm

    Toby

    I hope I don’t have to live with my mother as she is six feet under.

    I do know something about Thailand as I have been visiting there for the last 35 years and normally spend six month a year there.

    People do sit outside 7/11 and drink beer as there are many local people selling food in stalls, plus some 7/11’s do have small seating areas, the beach road in Rayong for example.

    Due to the virus I am not allowed to travel at the moment but I am in the far east at the moment, the far east of England.

    Shacks in Thailand? Yes there are shacks but there are also very nice five star places too, too expensive for you though it seems.

    I can send you a tenner if you like so you can buy some more cheap wine?

  16. Avatar

    toby andrews

    Tuesday, April 6, 2021 at 8:55 pm

    The far East of England!
    End of story.
    If you ever return to the Far East maybe you can comment – dreamer.
    Have you considered Butlins? I think you could enjoy yourself there.

  17. Avatar

    toby andrews

    Tuesday, April 6, 2021 at 9:11 pm

    Exactly where are these seats outside seven/elevens. I am keen to know of them.
    You might know being a BUDGET traveller – James R.

  18. Avatar

    James R

    Wednesday, April 7, 2021 at 1:23 am

    Toby

    The south east of England is very expensive, you won’t get much change out of £900,000 for a detached house here, it must be a lot cheaper for you renting a one bedroom tin shack in Cambodia.

    I was in Thailand for seven months last year but not able to get back there now due to the virus restrictions.

    Once lifted I will be there faster than a rat up a drain pipe as I have had my two virus jabs already.

    Butlins, when I was seven years old Bultins was a paradise for me and my sister, free cinema, free funfair etc, I will give Cambodia a miss now I have grown up though as Thailand is for more advanced in all respects.

    Cheers, I hope you are enjoying your cheap wine.

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Neill is a journalist from the United States with 10 years broadcasting experience and national news and magazine publications. He graduated with a degree in journalism and communications from the University of California and has been living in Thailand since 2014.

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