Thai Baht
Thai Baht (/bɑːt/; Thai: บาท, [bàːt]; sign: ฿; code: THB) is the official currency of Thailand. It is divided into 100 satang (สตางค์, [sà.tāːŋ]). The issuance of currency is the responsibility of the Bank of Thailand.
Thailand have a more advanced banking system than the US where anyone can create a "QR payment code" (PromptPay/สแกนจ่าย) to directly debit money from your account to the merchant's account as a real-time transaction settlement.
It is the official currency of Republic of Thailand. It's actual usage outside of buying goods and services in Thailand is being used as Gambling Chips. It doesn't matter how hard Thai regulators want to push forward their monetary policy to prevent outflow of capital to USD but as a consequences of its own actions making it harder for Thai people (who depends on online payments such as freelancer) to get money from the global clients somewhere else around the world.
The first victim of the new monetary policy is PayPal users in Thailand, BoT have enacted a policy to prevent Paypal Thailand users to receive money from overseas due to their "risk of money laundering" but allowed Thais to link their debit cards so the overseas merchants can still accept payments from Thailand. (aka take Thai people's money)
Second victim of this came from idiocy of the average users with near zero knowledge to banking security and fallen to a victim of Call Center Scams. BoT have enacted a lot of changes to prevent unauthorized bank account usage and makes it harder for a high-net-worth individual (HNWI) to transact as well...
Impact on Exchange Rates
The exchange rate between two currencies, in this case the Thai Baht (THB) and the US Dollar (USD), can have significant effects on various sectors of an economy. Let's explore the effects of a cheap Baht (depreciation) and an expensive Baht (appreciation) when compared to the USD in different sectors:
- Imports & Exports:
- Cheap Baht (Depreciation): A cheaper Baht makes Thai exports more competitive in international markets, as foreign buyers can purchase Thai goods at a lower cost. This can lead to an increase in exports and potentially stimulate economic growth. On the downside, importing goods becomes more expensive, which can contribute to inflation and impact consumers.
- Expensive Baht (Appreciation): An expensive Baht makes Thai exports more expensive for foreign buyers, potentially leading to a decrease in exports. This can negatively affect industries reliant on international sales. However, it makes imports cheaper, which can help to control inflation and benefit consumers.
- Tourism:
- Cheap Baht (Depreciation): A cheaper Baht can attract more foreign tourists, as their currencies can go further in terms of purchasing power within Thailand. This can boost the tourism sector and contribute to economic growth.
- Expensive Baht (Appreciation): An expensive Baht can deter foreign tourists, as their spending power within Thailand diminishes. This could have a negative impact on the tourism sector and related industries.
- Oil Prices:
- Cheap Baht (Depreciation): A cheaper Baht can lead to higher oil prices in Thailand, as oil is typically priced in USD. As the Baht depreciates, it takes more Baht to buy the same amount of USD-priced oil.
- Expensive Baht (Appreciation): An appreciating Baht can lead to lower oil prices in Thailand, as it takes fewer Baht to buy the same amount of USD-priced oil.
- Remittances:
- Cheap Baht (Depreciation): For individuals receiving remittances from abroad, a cheaper Baht means they will receive more Baht for the same amount of foreign currency. This can benefit recipients of remittances.
- Expensive Baht (Appreciation): An appreciating Baht means that recipients of remittances will receive fewer Baht for the same amount of foreign currency, potentially impacting their purchasing power.
It's important to note that exchange rates are influenced by a wide range of factors including interest rates, economic indicators, geopolitical events, and market sentiment. Moreover, the effects of exchange rate movements can vary based on the overall economic conditions, policies, and specific circumstances of a country.
