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Thai baht performs worst of all Southeast Asian currencies

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Thai baht performs worst of all Southeast Asian currencies | Thaiger
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.

    • Thaiger

      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.

Economy

2 emergency decrees provide businesses financial help

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2 emergency decrees provide businesses financial help | Thaiger
PHOTO: 2 Decrees aim for financial relief for struggling businesses

Thailand enacted 2 new emergency decrees today aimed at providing assistance to businesses and reducing default interest rates to help people affected by Covid-19. A deputy government spokeswoman confirmed the needed action was critical to protect and aid entrepreneurs and small and medium-sized enterprises during the time of pandemic-driven economic crisis.

The goal was to combat unfair interest rates on debt many are suffering, and to provide loans to help keep businesses afloat as the end of the Coronavirus is nowhere in sight.

The Emergency Decree on the Provision of Financial Assistance for Entrepreneurs Affected By the Covid-19 Pandemic allocates 250 billion baht in loans for businesses to recover from the devastating economic effects of the global pandemic. 100 billion baht of this is specifically set aside for those businesses in debt to participate in asset warehousing or debt repurchasing plans.

Asset warehousing allows businesses, like hotels, to essentially store their property in the care of a creditor for a fee until the economy recovers enough to take over the property again and start making money with it again. Debt repurchasing is a process for a business to buy back its own debt with better terms or a lower rate with the purchase price considered a payment to the principal debt not the interest, similar to refinancing a home.

The second of the emergency decrees, an amendment to the Civil and Commercial Code, looks to close loopholes caused by ambiguity in the law that allowed predatory creditors to charge unreasonable interest rates.

If someone missed a loan payment, the original law did not set a default rate, so lenders could charge additional interest. Debtors can now base default rate calculations on the unpaid principal in the updated law. The new decree sets a 3% yearly interest rate and lowers the default rate to 5% a year from the originally 7.5%. The Finance Ministry declared interest rates would be revised every 3 years.

SOURCE: Bangkok Post

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Pattaya

Unemployed elephants walk 500 kilometres from Pattaya to Surin

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Unemployed elephants walk 500 kilometres from Pattaya to Surin | Thaiger
PHOTO: Elephants walking down the road because their car is in the shop.

A group of 5 elephants and their owners began the long walk today from Pattaya to Surin after giving up on the return of tourism anytime soon. The 500 kilometre journey has to be done on foot as they couldn’t afford to hire trucks large enough to carry each elephant.

After waiting a year for the Chinese tourists that make up a majority of their customer base to return, the families decided to embark on the long journey with the 5 elephants to their home in the northeastern province of Surin. As they walk they’re protected on both sides by pickup trucks to keep them safe from cars.

5 years ago Napalai Mai-ngam came with her relatives to work in an elephant resort in Tambon Lam Huay Yai of Bang Lamung near Pattaya with their 5 elephants. They told the Bangkok Post that their earned a good living, about 75,000 baht (15,000 per elephant) plus tips from the tourists to ride elephants on nature trails, each month.

But with the borders closed due to the Covid-19 pandemic the tourists from China who usually flocked to elephant activities, were stuck back in China and Napalai’s boss had to cut their pay. Even with vaccinations finally underway, tourists in numbers, enough to sustain activities like elephant camps, may not be back anytime soon. The families finally had to surrender to the reality and start the long walk home.

They avoid the blistering Thai sun by walking early mornings while the weather was still cool, and hope the roadways out of Pattaya would provide snacking opportunities for the elephants to graze. They expect the journey to take about 2 weeks. The families have turned down offers of cash donations for fear that their long walk will be viewed as a publicity stunt.

That said, the families have expressed gratitude to the locals in towns they pass who have donated drinking water, food and fruit to the entourage of people and elephants. If you would like to donate resources you can contact them on phone number 093 335 7062.

SOURCE: Bangkok Post

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Economy

Southern Thai people turn from tourism to gold panning

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Southern Thai people turn from tourism to gold panning | Thaiger
PHOTO: Traditional panning for gold replaces tourism for income in Southern Thailand

Thars gold in dem hills!

With tourism in Thailand struggling due to Covid-19, and an economy needing some help, some people in the southern Thai region of the country have found income in an unusual source: panning for gold. The Sukhirin region close to the Malaysian border is known for gold deposits in the Sai Buri River and surrounding mountains. Villagers who made money before with tourism have now returned to panning for gold using old-fashioned manual techniques their ancestors used, without the aid of any machinery. Well, just an old pan.

Locals had previously made money selling food to passing tourists or acting as a tour guide to take people around the area, where travellers seeking to get away from the crowded and overdeveloped tourist areas that attract the most foreigners find many unique activities. Kayaking was a popular local activity with up to 150 people a day sailing down the rivers that are now filled with locals panning for gold. The prospectors are now making their income from the gold they collect which sells for 1,500 baht per gram. Families that work together can often collect at least one gram a day.

Thai Gold prices have reached record highs over the last 2 years and many Thai people have traditionally used gold and gold jewellery as a form of savings and investment, pawning their gold rings and bracelets in times of financial emergencies. The gold collected from these Southern villages will be used to make jewellery in Bangkok.

The region had invested in expanding into ecotourism but the pandemic put all their construction plans on hold. A cable car was being built to transport people up to the tops of the mountains to beautiful temples. The area’s unique history attracted people to their annual Rocket Festival, typically a north-eastern celebration.

In 1932, France was granted a 25 year mining contract in the jungles. They extracted almost 2000 kg of gold before World War II forced closure. The mining tunnels still exist and sometimes attracted adventurous tourists, but now sit vacant aside from snakes. In the 1960s the Thai government incentivised northerners with 18 rai of land each to move to the region. As a result, the area stands out in the Muslim region with 90% of the population being Buddhist, and most still speaking Isan dialects.

SOURCE: France 24

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