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Thailand’s Household Debt Continues to Rises and So Does the Thai Baht

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Thai investors who invested in foreign equities were also facing exchange rate losses when repatriating money due to the rising Thai Baht.

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BANGKOK – The Thai Baht has continued its upward trend, appreciating to Bt30.42 to the US dollar on Friday. Up from Bt30.67 the previous Friday, after having risen to a six-year high of Bt30.36.

Regional currencies also moved up against the US dollar as markets expressed relief about the US, China trade war.

European Central Bank (ECB)’s also cut its deposit facility rate, paid by banks on reserves parked with the ECB. The measures came as Germany, Europe’s largest economy, showed signs of a looming recession.

US President Donald Trump delayed tariff hikes on Chinese goods and China also postponed increasing tariffs on US goods.

“Thai Baht Scales Six-year High”

The Kasikorn Research Centre forecast that the Thai Baht may move in a range of Bt30.20 to Bt30.60 to the dollar next week.

 

According to analysts investors are awaiting latest developments in the trade war; the developments in Brexit; the meeting of the US Federal Reserve on September 17-18; and the meeting of the Bank of Japan and Chinese economic indicators.

Investors are also eagerly awaiting key economic indicators in the US, including a survey of industrial activities by the Fed’s New York branch; business trends by the Fed’s Philadelphia branch; the housing index in September; industrial production, second-home sales, housing starts in August and net capital flows in July, the analysts said.

Exporters, economists and overseas Thai workers have long complained about the appreciating Thai Baht. Damaging exports; farm products and causing exchange losses for overseas Thai workers; adversely impacting the overall economy.

Thai investors who invested in foreign equities were also facing exchange rate losses when repatriating money due to the rising Thai Baht.

Meanwhile, the Bank of Thailand has expressed concern about the country’s rising household debt as a result of the sluggish economy. The bank’s assistant governor Titanun Mallikamas said their  worried about Thai’s household debt load.

“We are closely monitoring household debts, as Thai families are vulnerable to during this economic slowdown.”

Household debt nationwide stands at 13 billion baht, a rise of 6.3%, which accounts for 78.7% of total GDP. This is the highest level since the first quarter of 2017.

Source: Kasikorn Bank, The Nation