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[soundman]

samran, on 2007-03-29 17:43:28, said:

bendix and topfield mutual admiration society....

Private room now open!!! please sign up!!!
  


Soundman.

[ray23]

Anyone know whats going with the baht

[topfield]

Dr. Naam, on 2007-03-29 09:24:05, said:

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

An interesting thought...

What's to stop Dr Naam having bought his dollars  at 31.80 transfering them back to Thailand and exchanging for baht at 35 the current onshore rate making an immediate and  tidy ten percent profit  ?

Surely nothing !

You lucky people holding baht offshore !!

[topfield]

IDEAS

So what  smugglers could do  is to pay the baht into an offshore account in Singapore and then tt them back

Alternatively buy baht in Singapore  then pay them in to a baht a/c there then transfer them back to Bangkok  and make perhaps 5 percent !

The second suggestion would even be 100 percent kosher !

Edited by topfield, 2007-03-29 21:35:56.

[sonicdragon]

topfield, on 2007-03-29 21:28:58, said:

Dr. Naam, on 2007-03-29 09:24:05, said:

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

An interesting thought...

What's to stop Dr Naam having bought his dollars at 31.80 transfering them back to Thailand and exchanging for baht at 35 the current onshore rate making an immediate and tidy ten percent profit ?

Surely nothing !

You lucky people holding baht offshore !!

The thing is, it's not really a profit, because onshore and offshore baht are not fungible. They are apples and oranges at the moment.

[sonicdragon]

topfield, on 2007-03-29 21:33:28, said:

IDEAS

So what smugglers could do is to pay the baht into an offshore account in Singapore and then tt them back

Alternatively buy baht in Singapore then pay them in to a baht a/c there then transfer them back to Bangkok and make perhaps 5 percent !

The second suggestion would even be 100 percent kosher !

It wouldn't be kosher because that's exactly what the capital controls on inward remittances are for.

[Naam]

The thing is, it's not really a profit, because onshore and offshore baht are not fungible. They are apples and oranges at the moment.

i beg your pardon Dragon?! it's NOT a profit? i wish i could accomplish a deal like this every month.

[Naam]

"What's to stop Dr Naam having bought his dollars at 31.80 transfering them back to Thailand and exchanging for baht at 35 the current onshore rate making an immediate and tidy ten percent profit ?

Surely nothing !"

of course nothing stops me except the fact that i have enough Baht onshore to cover my living expenses for at least 1½ years as of today. it's much easier to achieve a satisfactory yield with freely convertible currency offshore than with Baht onshore.

[Naam]

Alternatively buy baht in Singapore then pay them in to a baht a/c there then transfer them back to Bangkok and make perhaps 5 percent !

inspite of the fact that i maintain since 2½ years an offshore THB account my bank does not accept deposits of physical Baht. i assume it's the same with other banks in Singapore.

[sonicdragon]

Dr. Naam, on 2007-03-30 07:55:48, said:

The thing is, it's not really a profit, because onshore and offshore baht are not fungible. They are apples and oranges at the moment.

i beg your pardon Dragon?! it's NOT a profit? i wish i could accomplish a deal like this every month.

Are we talking about the same thing here ? I was referring to you remitting the baht into thailand. If you suddenly require that baht offshore again, then you won't be able to get it there, that's what I mean.

[sonicdragon]

Dr. Naam, on 2007-03-30 08:09:00, said:

Alternatively buy baht in Singapore then pay them in to a baht a/c there then transfer them back to Bangkok and make perhaps 5 percent !

inspite of the fact that i maintain since 2½ years an offshore THB account my bank does not accept deposits of physical Baht. i assume it's the same with other banks in Singapore.

Same for me in Hong Kong.

[sonicdragon]

sonicdragon, on 2007-03-30 08:20:53, said:

Dr. Naam, on 2007-03-30 07:55:48, said:

The thing is, it's not really a profit, because onshore and offshore baht are not fungible. They are apples and oranges at the moment.

i beg your pardon Dragon?! it's NOT a profit? i wish i could accomplish a deal like this every month.

Are we talking about the same thing here ? I was referring to you remitting the baht into thailand. If you suddenly require that baht offshore again, then you won't be able to get it there, that's what I mean.

Scratch that. Sorry, I see you are talking about holding baht offshore, and now that it has appreciated you have sold it. Yes of course it's a profit.

[Naam]

Scratch that

i will  

[sonicdragon]

Dr. Naam, on 2007-03-29 13:52:53, said:

This shows that although the exchange rate of the onshore/offshore baht is hugely different.....up to ten percent variation...

and nobody has a logical explanation!

I've given my logical explanation several time already:
1. Capital controls exist on the inward remittance of baht. This increases offshore demand.
2. Local banks are banned from selling baht offshore. This reduces the supply of offshore baht.

Increased demand and decreased supply = higher price

Seems pretty logical to me - do you guys disagree or think I missed something ?

[Naam]

sonicdragon, on 2007-03-30 10:57:03, said:

Increased demand and decreased supply = higher price

Seems pretty logical to me - do you guys disagree or think I missed something ?

in principle = yes, considering actual facts = NO. what could be a reason that offshore demand surpasses supply? i can't see any. nobody can use THB offshore. if one needs THB onshore one transfers foreign currency and gets the better onshore rate.

[sonicdragon]

Dr. Naam, on 2007-03-30 11:37:21, said:

sonicdragon, on 2007-03-30 10:57:03, said:

Increased demand and decreased supply = higher price

Seems pretty logical to me - do you guys disagree or think I missed something ?

in principle = yes, considering actual facts = NO. what could be a reason that offshore demand surpasses supply? i can't see any. nobody can use THB offshore. if one needs THB onshore one transfers foreign currency and gets the better onshore rate.

What actual facts are you referring to ?

If a foreigner wants to speculate on the appreciation of the baht s/he must sell foreign currency and buy baht offshore. Since curbing such speculation was the stated reason of the BoT for introducing capital controls in the first place, I believe this to be a satisfatory explantion.

The price of baht offshore must be a reflection of actual supply and demand, don't you think ? I mean, dealers in the major inter-bank markets are at this very moment sitting at their desks in singapore, HK, tokyo, london etc making prices in THB/USD and trading it, and they are free to make whatever price they want, and like they do in other pairs, they decide their pricing mainly on actual flows.

But you are implying that I have missed something, so please elaborate....

[ArranP]

I noticed the GBP / THB pair flucuates 1 or 2 % alot of the time.

I don't know yet where I can "currency trade" this pair, does anyone know an online site that does ? hopefully with a GBP trading account ?

Thanks for feedback.

[sonicdragon]

ArranP, on 2007-03-30 12:04:51, said:

I noticed the GBP / THB pair flucuates 1 or 2 % alot of the time.

I don't know yet where I can "currency trade" this pair, does anyone know an online site that does ? hopefully with a GBP trading account ?

Thanks for feedback.

As topfield has said on a number of occasions, THB/GBP is not an actively traded pair. It is the product of the combination of THB/USD and USD/GBP so when you see fluctuations in the cross rate you are seeing either the result of one of those pairs moving, or both of them moving - obviously this means that the cross rate movements can be amplified or dampenned by corresponding moves in the main pairs.

[ArranP]

I think I get it, so thats why the baht is so strong from the sterling at the moment because the dollar is weak.

[sonicdragon]

ArranP, on 2007-03-30 13:42:28, said:

I think I get it, so thats why the baht is so strong from the sterling at the moment because the dollar is weak.

No, if the dollar were just weaker, by the same extent, against the baht and the pound, then there would be no effect on the cross. But, for example, if the dollar weakened 1% against the baht but rose 1% against the pound, then the baht would strenthen against the pound by 2%

[ArranP]

Thanks SonicD, thats helped improve my understanding.

[Naam]

But you are implying that I have missed something, so please elaborate....

wrong perception from your side. i just stated my personal opinion. as far as the demand/supply situation is concerned my bankers concurred with your opinion a couple of months ago. now they have changed their mind and are as clueless as i am. according to them THB forex trade has more or less ground to a halt, there is ample supply, not too much demand and still the offshore rate shows a relatively huge discrepancy vs. onshore.

[LaoPo]

Dr. Naam, on 2007-03-31 03:30:02, said:

But you are implying that I have missed something, so please elaborate....

wrong perception from your side. i just stated my personal opinion. as far as the demand/supply situation is concerned my bankers concurred with your opinion a couple of months ago.

now they have changed their mind and are as clueless as i am. according to them THB forex trade has more or less ground to a halt, there is ample supply, not too much demand and still the offshore rate shows a relatively huge discrepancy vs. onshore.

That's odd and interesting at the same time  
It would mean the Baht is artificially high...much higher than it should be - but we knew that already, didn't we?-

But, if the bankers* have no clue.....WHO HAS ?

Weird situation and it doesn't 'promise' very good things to happen in the near future...

* meaning: S'pore Bankers are not the most stupid in the world -of High Finance-......

SO: who is ?

LaoPo

[sonicdragon]

Dr. Naam, on 2007-03-31 08:30:02, said:

But you are implying that I have missed something, so please elaborate....

wrong perception from your side. i just stated my personal opinion. as far as the demand/supply situation is concerned my bankers concurred with your opinion a couple of months ago. now they have changed their mind and are as clueless as i am. according to them THB forex trade has more or less ground to a halt, there is ample supply, not too much demand and still the offshore rate shows a relatively huge discrepancy vs. onshore.

I usually think in accordance with the principle that if it looks like duck, walks like a duck and quacks like a duck, then it probably is a duck :-)

If I'm not mistaken I think wouldn't argue with my explantion for the offshore rate being stronger than the onshore rate (would you ?) - rather, you are not convinced about it explaining the *extent* of the strength ? In other words, do you agree that there should be a premium, given the capital controls, but you don't agree that it should be as big as it is ?

[Naam]

If I'm not mistaken I think wouldn't argue with my explantion for the offshore rate being stronger than the onshore rate (would you ?) - rather, you are not convinced about it explaining the *extent* of the strength ? In other words, do you agree that there should be a premium, given the capital controls, but you don't agree that it should be as big as it is ?

quite correct!