Baht Dropped because of China Concerns

Thailand’s economy is strongly intertwined with the Chinese economy, and now that the Chinese economy seems to slow down, this has also had an effect on the Thai baht, you can read more about it here.

A Strong (And Strenghtening) Thai Baht

There is an article in the Bangkok Post on the strong appreciation of the Thai baht – which is at over 12% so far in 2010. This is the strongest appreciation of all countries in the region, with the exception of Japan.

Since Thailand is an economy that relies heavily on exports, this causes problems for those companies who make most of their revenue from exports – while benefiting those who import (for example, petroleum…).

However, the export-depended companies often employ a lot of labour and local content – so when they suffer, it can be felt by these people too. So far, what the Bank of Thailand has done doesn’t really help – even though in the past three months foreign reserves have increased by over US$21 billion.

Sethaput Suthiwartnarueput from the SCB Economic Intelligence Centre then continues to talk about different measures which could be taken next…