Should Thailand peg the baht at about 40baht/dollar for a couple of years?

Question

This would at least seem to work to cool off the currency speculators for a while.
Malaysia pegged the Ringgit at 3.8/dollar for several years with pretty good results.

Answer 1

They should do something as this is getting crazy.. a couple of days ago, it was 33.20 in the morning and then 35.80 in the afternoon and down again at night to near 33+ - somebody, probably the banks, must be making a fortune on that type of sudden volatility.. though I doubt we will solve this on yahoo answers.. the strength of the baht keeps surprising me as the country seems to be in a volatile political period.. So, as you can see, I have no idea.. 40 would be fine with me..

Answer 2

When I first came here in 1971 the rate was 20-1. Then in 2001 it was roaming from 40-44 to 1. Now the baht is gaining ground and while it may be good for Thailand in general it is hurting most Thai workers and for those of us foreigners living here it has an effect on our cost of living. In the last year, with increase in costs of goods and services, the strengthening of the baht to dollar on the world market, purchase power has gone down about 20%. I like many would love to see the baht pegged at 40-1. Hopefully this is just a temporary thing.

Answer 3

The baht is highly volatile right now, with currency speculators making a lot of money (I assume). The value of 40 might be a little high since it is around 33 to 35 these days. Forty would make Thai exports to the US some 10 to 15% less expensive, thus hurting the balance of trade with a major trading partner. Thirty-five baht per US dollar might slow the volatility. In all such cases, though, there has to be flexibility in the event that financial markets change.

Answer 4

George Soros and other hedge fund operators love to find artificially created discrepencies between a fixed value of a currency or commodity and its true market value. They have hurt both Thailand and Malaysia in the late 90's making a fortune for themselves and making a mess of the economies that they plundered.

Governments should be cautious about currency manipulation, both by themselves and speculators. An open and liquid market for currency exchange should reflect the true relationship between various currencies.

Even China is leaving itself exposed to speculative manipulation by pegging its currency ridiculously low. The government's strict control of banks and exchanges will only defer it.


On the other hand, a 50lb sack of Thai sticky rice went from $25 to $30 at the local Asian store last weekend. Quite annoying.

Answer 5

My husband and I couldn't quite understand the current situation with the thai currency. We thought the baht would be weakening due to the country's political uncertainty and the wishy-washy act of thai bank chairman. The baht just did the opposite. Fortunately we're not trading any currencies, otherwise we probably would have lost our shirts. They have created the artificial deficit of bahts in the market by requiring the 30%reserve. Economic 101: By creating the scarcity of wanted item (in this case, the bahts), the fewer you have of the wanted item, imo, the higher or grater the value it will be.

Answer 6

The baht fluctuation is currently due to uncertainties in the regulations from the new government, which is flip-flopping ever so fast. There is no proper direction in sight for the Thai economy as yet. Hence you may see the fluctuation a bit more.

The Thai govt do want to curd the rise of the baht, as this will affect their tourist trade. So let them work it out. The baht-US exchange is holding around 35baht.

Answer 7

i pray to Buddha every night that he would do that. but even that has not help with these damn financial idiots they have running this country.

Answer 8

yes