Rise and Fall Of The Thai Baht

Posted: 04 Jun 2012 | 6:00 am

Take any trip and you can expect what while you trudge up one side of a mountain the road will lead you down another.

It wasn't that long ago that a strong appreciating Thai baht was causing concerns in many of the country's business circles.

For the key Thai export sector, there was a cloud of concern about loosing out to cheaper labor markets.

While for hotels and property, where most transactions are denominated in local currency,value for money remained a strong negative perception.

In the latest reversal of fortune, Asia has is reeling in marked declines in currency.

Is this bad or good for Phuket?

The likely answer is both. Lower costs stimulate the sales proposition but when you take a step back and realize that the entire region may hit the skids, it becomes very murky.

Exports may be cheaper but where are the markets to sell them to? The expected continued upward climb in volume tourism i.e. The China Syndrome could spiral if domestic growth creeps down to a dead mans crawl.

Perhaps most important is the impact to Thailand's domestic sector from a falling stock market and pressure on the Bank of Thailand to defend the value of the Baht at some point down stream.

Ultimately the best thing is for a stable Baht, which appears to be an impossible task at present.

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