Recently, the Thai economy has turned from the story.

"Famine" is a matter of

"The baht has weakened", which may make many people confused that

What is a weak baht?

or what does it mean

And who benefits or loses from the depreciation of the baht?

Thairath Online summarizes the answers.

What is a weak baht?

The depreciation of the baht or the depreciation of the baht is that the Thai baht can be exchanged for a foreign currency that is the main currency, such as the United States dollar.

On the other hand, the US dollar can be exchanged for more Thai baht.

or the Thai baht has less value compared to foreign currency

For example, from the beginning on September 24, 2021, we need 33.43 baht, it can be exchanged for 1 dollar. But this year, on September 24, 2022, it takes 37.54 baht to be able to exchange 1 baht. Dollars, which means you need to spend up to 4.11 baht in exchange for 1 dollar.

Compare to see more clearly.

If we have to travel to the United States

We will exchange the dollar for $1,000 if the baht is the same as last year.

We will use only 33,430 baht, but if we exchange now that the baht has weakened a lot.

We have to spend up to 37,540 baht.

What is the reason for the depreciation of the currency?

There are many factors involved in the depreciation of the baht.

Especially foreign factors as the main. In 2022, it can be concluded that the main reasons are as follows.

This is just the main reason.

causing people to turn to the dollar

and buy more bonds

Because it is viewed as a safe asset.

causing the dollar to strengthen

or is to make other currencies

including the weaker baht

It is a cycle of currency changes that must be accepted.

Because Thailand has been using the baht float system since 1997 when the Tom Yum Kung crisis occurred.

As a result, the baht changed according to the reality of trading in the forex market.

from using the money basket system

“Baht” that is depreciating at this time, it must be said that there are both benefit and disadvantage.

This is the polar opposite of those who benefited from the appreciation of the baht as well.

weak baht

who benefits

• exporter 

  Call it the number one way to benefit from the weak baht.

  because when the goods are sent out

  Received in foreign currency will be able to exchange for more baht, for example, from the original export profit of 100 dollars, only 3,500 baht can be exchanged for Thai money, but now the exchange is 3,700 baht.

• foreign worker

  or get paid in dollars 

  Just like the exporter

  because the wages are paid in foreign currency

  When sending back to Thailand even with the same dollar amount

  but will allow the house to be exchanged for more Thai money

• tourism business operator 

  Due to the receipt of foreign currency, the income in baht has increased as well.

• foreign tourists 

  The depreciation of the baht

  This will allow foreign tourists to have more purchasing power and purchasing power.

  If foreign currency is used to exchange baht for spending in Thailand.

  Called as a worthwhile time for foreign tourists to travel to Thailand.

• Investors who hold gold in their investment portfolios. 

  It is considered a profit-taking period.

  because it is a cycle when the baht depreciates

  The price of gold always tends to increase.

weak baht

who loses

When there are people who benefit, there will be people who lose from the weak baht.

Who is being affected at this time?

• importer of goods 

  Called to get to the full door

  Because the cost to be paid in foreign currency

  which when the baht depreciates

  It has to spend more money to buy and import products.

  but received the same amount of product as before

  especially in the energy product category.

  both oil and gas

  This problem will continue to affect energy prices in the country that must inevitably increase.

  Not including if the world oil market price increases, it will be 2 bounces, causing the energy price to rise again immediately.

  Including those companies that have to import machinery

  foreign equipment

  because from the original price had been agreed upon

  But due to the depreciation of the baht, it was necessary to find more money to pay for it.

• those with foreign debt 

  It must be said that it has been affected close to the importer because of the sudden increase in the debt that must be paid.

  Increase the burden even more than the interest. For example, used to owe 100 dollars, only 3,500 baht spent on the debt, but as of today, the same debt of 100 dollars has to pay 3,700 baht to pay off.

  In this case, if someone owes a million, a hundred million, a billion, if they don't buy insurance for money risk, it's definitely difficult.

• Consumers 

  are referred to as the chain affected by the importer.

  because when importers have to bear the burden of higher import prices

  It would pass the burden on consumers.

  Now, if buying products from abroad, you have to deal with the rising price.

• students - students - tourists 

  especially the group that will travel to travel

  or study abroad

  because there will be higher costs

  Therefore, those who plan such a plan should prepare and prepare all the necessary factors.

  Because in addition to the cost of traveling or studying that has moved up

  purchase of goods or services

  Abroad, it will be more expensive as well.

• Thai investors 

  when the baht depreciates

  will cause foreign investors to flow out of the Thai stock market

  due to fear of exchange rate losses

  This is in contrast to the appreciation of the baht.

  that investments from foreign investors will flow into the Thai stock market

  Because you will get 2 profits, which is both profits from the appreciation of the baht.

  and gains from rising stock prices

Therefore, investors in this period should choose to invest in export stocks such as electronic components.

Motor vehicles and food parts because they benefited from the depreciation of the baht.

This will make more money on hand.

and avoid stocks in the energy sector, power plants, which are affected by the depreciation of the baht.

because the dollar was borrowed

In this work, we can see that whether the baht weakens

or hard, it will have an effect.

like a two-sided coin

Or during this period, we may have to go back to the Thai-doing era. Thais use Thai to prosper if they don't want to bear the burden and expenses that have risen from the current depreciation of the baht.