Friday, January 26, 2007

THE THAI BAHT – UPDATE

THE THAI BAHT – UPDATE

I’m starting to understand this a little more although I still understand very little in total. This is in today’s Bloomberg on line:

The Thai baht gained the most among world currencies today, surging 1.8 percent to 33.5 per dollar, the strongest since 1997. The currency rose because recent measures to curb speculation in the baht reduced its supply among overseas investors, central bank Governor Tarisa Watanagase said.
So now there is a two tier exchange rate on the baht. The exchange rate quoted at XE.com - Universal Currency Converter Results is the international rate. Meanwhile, the local papers are quoting the in-country rate. That rate is being kept weaker by government rules and sometimes differs by 3% or more from the international rate.

What a strange situation. It’s kind of a reverse black market in money. Usually, at least in places I’ve been, cheap money is bought on the outside and smuggled in. That’s how a normal black market works. Here in Thailand, the money dealers would want to smuggle baht out. And probably do.

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