Is a Strong Thai Baht Good or Bad?

         For over a year, since early July 2018 until today, the Thai Baht has shown a continuous strengthening trend without any signs of weakening. In July 2018, the Thai Baht was at 33.10 Baht per US dollar, but today (July 8, 2019), it has strengthened to 30.86 Baht per US dollar.

Traveling Abroad? Hurry to Exchange Your Money!

            For those preparing to travel abroad, you must be smiling as you get ready to exchange your Baht for foreign currencies, feeling like you're getting a special discount. It has been reported that the number of outbound tourists from Thailand this year is around 10.8-11 million, an increase of more than 5% compared to 2018, with a total value exceeding 300 billion Baht, especially in European countries and Turkey, such as France, Switzerland, and Italy, where travel numbers have increased by 10-20%.

            As for popular destinations for Thai travelers like Japan, the trend of bookings continues to improve. The Japan National Tourism Organization (JNTO) reports that the number of Thai tourists visiting Japan has exceeded 512,700, an increase of 19.4% from last year.

Declining Tourists Impacting Exports

            For Thailand, classified as an Emerging Country, it is seen as a prime investment destination by foreign investors. Investments in emerging markets (EMs) often yield higher returns than those in developed countries. The continuous influx of foreign direct investment (FDI) has kept Thailand's current account balance positive, leading to the strengthening of the Baht, in line with the principles of Demand & Supply.

            The strengthening of the Baht directly impacts the country's exports, which account for about 56% of GDP. It is estimated that Thailand's export figures may decrease or increase by no more than 3%.

The impact arises from the perception that goods appear more expensive, which is actually due to the depreciation of the Baht's value. For example, last year, one could sell a product for 1 US dollar at 34 Baht, but now, when converted back to Baht, it is only 30 Baht.

            Another major source of income for Thailand, tourism, is also affected. The growth of tourism from foreign visitors has decreased. Compared to the growth in 2018, the number of foreign tourists from January to May grew by 11.84% from 2017, but when comparing the accumulated number of foreign tourists from January to May in 2018 and 2019, the growth is only 1.58%.