Thai Baht Foreign Currency in the Foreign Exchange Market
The Thai baht (THB) is considered to be an exotic currency in the Forex market. Thailand is the world’s twenty-fourth largest economy (CIA.gov).
Trade Surplus or a Trade Deficit
Thailand runs a trade surplus of $12.29 billion, giving the country a ranking of 22 out of the 190 countries tracked by the CIA in The World Factbook.
What Does Your Economy Export?
Thailand exports textiles, footwear, fishery products, rice, rubber, jewelry, automobiles, computers, and electrical appliances.
According to the World Trade Organization (WTO), Thailand exports $152.5 billion in goods and merchandise compared to only $29.9 billion in commercial services. The WTO breaks down those exports as follows:
Goods and Merchandise
- Agricultural products: 18.4 percent
- Fuels and mining products: 6.2 percent
- Manufactures: 71.7 percent
- Transportation: 19.4 percent
- Travel: 53.1 percent
- Other commercial services: 27.5 percent
To Whom Does Your Economy Export?
The WTO ranks the following countries as the top destinations for exports from Thailand:
- European Union: 11.9 percent
- United States: 10.9 percent
- China: 10.6 percent
- Japan: 10.3 percent
- Hong Kong: 6.2 percent
What Does Your Economy Import?
Thailand imports capital goods, intermediate goods, raw materials, consumer goods, and fuels.
According to the WTO, the country imports $133.8 billion in goods and merchandise compared to only $37.8 billion in commercial services. The WTO breaks down those imports as follows:
Goods and Merchandise
- Agricultural products: 7.0 percent
- Fuels and mining products: 22.6 percent
- Manufactures: 67.3 percent
- Transportation: 45.6 percent
- Travel: 11.0 percent
- Other commercial services: 43.4 percent
From Whom Does Your Economy Import?
The WTO ranks the following countries as the top sources of imports to Thailand:
- Japan: 18.7 percent
- China: 12.7 percent
- European Union: 9.1 percent
- Malaysia: 6.4 percent
- United States: 6.3 percent
Do You Have an Attractive Government Debt Market?
Thailand currently has a Moody’s rating of A2. It received this latest rating on October 28, 2010. This most recent rating was an upgrade from the A3 rating that the country had held previously. This is a positive sign for the country’s government debt market.
Do You Have an Attractive Equities Market?
Thailand has an attractive equities market, but it is not very large. It is the thirty-fifth largest equities market in the world, with a total market value of $138.2 billion.
Central Bank Mandate
The main objective of the Bank of Thailand (BoT) is to ensure price stability in the economy, which is defined as low and stable inflation. Price stability helps facilitate decision making and planning of consumption, production, saving, and investment by the private sector, which in turn supports sustainable economic growth and employment in the long run. This is because low and stable inflation helps to:
- Preserve the purchasing power of consumers and savers.
- Maintain the price competitiveness of businesses in both domestic and international markets.
- Reduce the volatility of the real interest rate.
- Promote a good overall economic environment through reduced uncertainty, which would otherwise negatively affect private-sector consumption and investment planning and decision making.
The Bank of Thailand has foreign currency reserves of $161,152 million and gold deposits of $4,480 million.
Government Intervention in Forex
The Thai government has been known to intervene in the currency market from time to time.
Important Economic Announcements
When you are watching the economic announcements coming out of Thailand, make sure that you keep your eye on the following:
- Interest rates
- Gross domestic product (GDP)
- Trade balance
Are You a Safe-Haven Currency?
No, the Thai baht is not considered to be a safe-haven currency.
How Can I Trade You?
You can trade the Thai baht using the following:
- Spot Forex