Transcript of the above video:

As the title of this video suggests, we are discussing the Thai Baht, specifically we are discussing it in the context of the exchange rate. I thought of making this video after reading a recent article in the Pattaya Mail, that is pattayamail.com, the article is titled: UK Pound falls to 39 baht in foreign exchange booths. Quoting directly: "The British Pound buys fewer than 40 Thai for the first time since the 2020 panic over the prospect of the Brexit exit from the European Union. Foreign exchange bankers say that, unusually, welcome events in Thailand are responsible for the shift against the Pound and to a lesser extent the US Dollar. Thailand's opening up and cancellation of tourist entry requirements, such as visas and insurance, has already resulted in a surge of international arrivals which are expected to intensify. Christopher Wong, from the OCBC Bank Singapore, adds that the Thai Authorities have also said they will combat any resurgence of inflation by hiking interest rates in the bank, a statement which has pleased International financiers. The return of mass tourism is seen as a huge income generator for Thailand, a country heavily dependent on foreign visitors to boost the Treasury."

Now I really enjoyed this article and I urge those who are watching this video to go check that out. There is a lot more in there, it is very insightful. One thing that I do is find, it seems to be a conceit among expats, it is a weird kind of notion that there is almost an implied right in some expats that their currency should be strong at all times against the Baht and that just isn't the way the world works. Exchange rates, they fluctuate, ever since we ended Bretton Woods in 1971, de-pegged the Dollar from gold and then after that many other countries over time de-pegged from the Dollar resulting in the floating exchange rate that we currently deal with in most cases around the world including Thailand that we deal with presently today. The fact of the matter is look the Thai Economy is arguably stronger, probably relative in many ways to many countries in the West I would say. All of Asia is going through a massive phase of industrialization right now, Thailand included. I think I read somewhere Thailand makes as many if not more cars than any other place or auto parts at least than any place in Asia for example. This is not indicative of a country that is wholly dependent for example on tourism where you would see a situation where they would be kind of a constant strength of a foreign currency against the local currency. Thailand doesn't have an economy like that. I expect the Baht actually to stay relatively probably against the Dollar somewhere in the lower mid-30s probably into the foreseeable future. We saw the Thai Baht strongly come back off of I think the weakest it got was about 37 to the Dollar and then it roared back, I think we are in the 34 area right now, off the top of my head I don't really recall, but it is better than 37, "better" in the sense the Thai baht is stronger than it was merely a few weeks ago. A lot of reasons for that but I think a big one is people constantly overlook the fact that Thailand has a very resilient economy. It has an economy that for lack of a better term, it has a "real" economy. It is not based on a bunch of finance and hypothecation, nor is it wholly based on tourism either. Tourism is a major component of the Thai economy as we have discussed, it probably makes up for about, depending on what you read, somewhere between 16 and 20% of the overall GDP. That is not insignificant; it is a huge source of Foreign Exchange again not insignificant at all especially as Thailand had to blow through a lot of foreign reserves to get through COVID, I think reopening to tourists and bringing in all that foreign exchange was a welcome respite from that overall trend we were dealing with for a few years.

So the thing take away from this video is yeah the Baht is probably stronger against certain currencies; I expect against a lot of European currencies, not really surprised against the Pound. I expect the Thai Baht to strengthen against the Dollar in sort of the longer term. How exactly things play out day to day remain to be seen. Again I am not an economist, this is just somebody who has to deal with exchange rates on a day-to-day basis; that is just kind of my prognosis looking out into the foreseeable future.