Currency Exchange Rates Thread

[Nemo.]

Originally Posted by kenkannif

^ But my bank gave me 69.31 Baht to the Pound from money coming into Thailand from the UK??? What gives??? Or is that what you meant???

Anyone changed any cash recently? What did you get?

Well yes excatly! you bring money in great! take money out its 70 baht which means you lose a lot of money compared to the real market rate (eg 1,000 pounds sent home should cost 65,000 baht NOT 70,000 baht!) Basically tourists are being subsidised at the moment

[defender]

When transferring money between countries (UK to Thailand anyway) they use the "inter-bank" exchange rate which may or not be the same as the quoted rate.

Usually they are quite similar though IME. I just checked my online statement 'cos I've made a couple of transfers in the last month and the rate was 68.5, went up to 69.5 and just yesterday was back to 69.0607.

Their website is showing their buy/sell rates at 63 and 76 respectively.

[kenkannif]

^ Yes but what I'm saying is they're quoting 65 for money in or out...but the banks are giving 68-69 for money in or out (I brought money in and got 4 Baht more to the Pound than xe.com are showing).

For sure I can understand if the banks give 65 Baht on money coming in and 70 Baht on money going out...but they're not....that's what's confusing me with xe.com etc.
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Cheers Def.....yeah the banks are cool with the exchange rate but why are xe.com and the others basically lying in regards to the exchange rate???

[Om Bak]

Originally Posted by kenkannif

Intweeging...so why are all the others sooooo off I wonder?

All FX sites I've come across quote interbank rates not bank retail rates. Hence there is always going to be a variance in not only rates but spreads aswell.

[kenkannif]

xe.com used to be like .5 off, but this is 5 Baht in every Pound? Never been like this before???

[Om Bak]

Originally Posted by kenkannif

xe.com used to be like .5 off, but this is 5 Baht in every Pound? Never been like this before???

Just a guess, maybe the bank you are using has a different chief currency dealer now. I can go to 3 different banks and get a difference of 2-3baht selling NZD to baht.

Another guess, if you change large amounts alot of banks can give you higher than the retail rate.

[Nemo.]

Normally arbitrage would equalise the price

ie I send 10,000 pounds at 70 baht to my Thai account and get 700,000 Baht

I then send my money back at 65 Baht (market rate) and I get 10,769 pounds

769 pounds for doing nothing AND no risk! do that once a working day for a year and make 170,000 pounds! That is a profit from doing not much of 11.8 million baht!

Normally what would happen is arbitrage would close this gap quicky as the price to bring money in falls to 65 to match the market rate (or v.v. depending on volume). The price would equalise (except a margin) so that buying and selling baht would result in a small loss NOT a big profit

Why cant I do that? well GETTING access to the money market rate is impossible sitting as an individual in Thailand

Normal Tourist rates (usually less than 15,000 pounds) have a bigger buy/sell spread than the market arte. Eg 65.1/65.2 might be the market rate but a bank would quote 64.5/65.5 for tourists. Usually if you transfer money over 15,000 pounds from a UK bank you get much nearer to the market rates and if over 100,000 pounds you get the market arte (I know as I did that once from UK to Malaysia via USD - as ringet was then fixed to USD - I worked in a Hedge fund and checked the spot price and I got the rate like a big bank would)

So what is happening now is that the Baht is no longer a "free currency" and is being manipulated to favour exports (inc tourists) for the "small business" You are screwed if you send money out though!

Basically there is govt interference and they are setting an unrealistic rate and forcing you to accept a bad rate (if sending money back) so that you cant arbitrage.

I suppose they think the rate will go back but the banks are suffering losses in effect as they are giving you 70 baht to the pound BUT it is only worth 65!

Originally Posted by kenkannif

^ Yes but what I'm saying is they're quoting 65 for money in or out...but the banks are giving 68-69 for money in or out (I brought money in and got 4 Baht more to the Pound than xe.com are showing).

For sure I can understand if the banks give 65 Baht on money coming in and 70 Baht on money going out...but they're not....that's what's confusing me with xe.com etc.
-----
Cheers Def.....yeah the banks are cool with the exchange rate but why are xe.com and the others basically lying in regards to the exchange rate???

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Originally Posted by Om Bak

Just a guess, maybe the bank you are using has a different chief currency dealer now. I can go to 3 different banks and get a difference of 2-3baht selling NZD to baht.

Another guess, if you change large amounts alot of banks can give you higher than the retail rate.

no way! it is just that some banks dont bother or dont want to sell baht to tourists. Any currency dealer who was out by 2-3 baht per NZ dollar would have been sacked and jailed for fraud by now!

[kenkannif]

xe.com used to be like .5 off, but this is 5 Baht in every Pound? Never been like this before???
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Originally Posted by Nemo.

Normally arbitrage would equalise the price

ie I send 10,000 pounds at 70 baht to my Thai account and get 700,000 Baht

I then send my money back at 65 Baht (market rate) and I get 10,769 pounds

Yeah I understand that but that's now what's happening mate! It's working both ways!
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Originally Posted by Om Bak

Just a guess, maybe the bank you are using has a different chief currency dealer now. I can go to 3 different banks and get a difference of 2-3baht selling NZD to baht.

Another guess, if you change large amounts alot of banks can give you higher than the retail rate.

All the banks I've checked are giving 68-69 Baht to the Pound, all the currency websites are saying 65 or so....wasn't a great deal of cash at all!

[Whitey]

Originally Posted by kenkannif

^ But my bank gave me 69.31 Baht to the Pound from money coming into Thailand from the UK??? What gives??? Or is that what you meant???

Anyone changed any cash recently? What did you get?

Originally Posted by Whitey
a foreign baht market has developed. The quotes on all of these currency converter sites are for that external baht market. In Thailand, rates are subject to the internal baht market.

From: http://www.nationmultimedia.com/2007...s_30025225.php

The BOT governor insisted the difference in baht value between the onshore and offshore markets was an expected result of central-bank measures to curb speculation.
Baht liquidity in the offshore market was limited, owing to the 30-per-cent withholding measure.
"Many mistakenly assume when the baht appreciates in offshore markets, it will strengthen onshore, too. But it doesn't. The BOT has already completely separated the markets.
"The difference in [baht value] in both markets won't be a concern. Finally, baht value in the offshore market will adjust itself," she explained.
Tarisa added that values in offshore markets had strengthened significantly over the past week, as baht liquidity offshore dried up as a result of bank measures preventing non-residents access to baht liquidity - an integral part of the anti-speculation policy.
She warned exporters to take care when quoting prices, because of the two-tier market system.
she said that quoting dollar values from the wrong market would result in losses.

From: http://www.rgemonitor.com/blog/economonitor/184623

Bank of Thailand seems to have shot itself in the foot. Capital controls meant to stem speculative inflows are doing the opposite. The bank's policy has split the baht market in twain, with liquidity in the offshore market drying up and driving the value of the offshore baht higher than its onshore counterpart. The Nation's Thanong Khanthong explains what went wrong.

In simple terms, the Uk pound to dollar rate is about 2 to 1 right now. The offshore baht rate is 32 or so per dollar, that's why the offshore baht rate is being quoted as 65 or so(32 .something times by two is close to 65).

The onshore rate is close to 35 to 1 dollar, the UK pound to dollaris 2 to 1 that why the rate being quoted by banks in thailand is close to 70. (2 times 35 is 70).

Understand things now, KK?

[buddahas]

For as long as I remember, I used to get THE BEST exchange rate in Thailand compared to other contries. I still think the sole reason for that is that they want to stimutale the economy... you know... spend more. Am I wrong in that assumption? Xe rates are actually correct for the rest of the world, but Thai banks seem to be generous giving their baht for your valuable pounds and dolla's.

[Whitey]

It's not generous, it's supply and demand. There isn't enough baht outside the country to satsify the demands so the value goes up. In Thailand, the supply of baht is more and the value is less. This was caused by the 30% reserve rule.

[Om Bak]

Originally Posted by kenkannif

All the banks I've checked are giving 68-69 Baht to the Pound, all the currency websites are saying 65 or so....wasn't a great deal of cash at all!

Where all the banks you checked thai banks out of curiousity? As far as I can remember when selling NZDs and AUDs thai banks gave about 2 baht more than offshore banks.

Good post by Whitey Hit the nail on the head in laymans terms.

[kenkannif]

Thanks Whitey (kind of get it).

Yeah mate only checked Thai banks!!!

[SageAndOnion]

If you mean your bank in Thailand then yes, that's what he meant. They gave you more than the money market rate so you should be happy
My money gets paid into my UK account and I draw it out by ATM over here - so I get the 65 baht rate


Woops, missed a page.

[anon]

i've been told that currency x-change shops in thailand pay more for traveller's checks than notes.

is this true, and if so, why?