Update the situation with important reasons
why the Thai baht is in the worst in Asia
If we go back to the year 2019 before the Covid situation. We may have heard the news about the appreciation of the Thai baht. There is a continuous export and tourists still need a lot of Thai baht to travel. According to the World Bank report, We used to have 39 million tourists in Thailand in that year. Which greatly affects economic growth and the Thai baht. However, when the covid situation occurs the Thai economy also seems to be steadily deteriorating. In July 2021 the world-class news agencies such as CNBC and Japan’s Mizuho Bank reported that the “inefficient performance of the Thai baht makes it the worst currency to date in 2021.” Today, WiSE & OK will take everyone to update the situation and find out the main reasons why the Thai baht is the worst in Asia.
CNBC news agency has released a report, Refinitiv Eikon, which states that the Thai baht now depreciated as much as 10% against the US dollar annually as of Monday morning, July 26, 2021. In addition, when looking at other Asian currencies against the US dollar, it was found that the Japanese yen fell nearly 7%, the Malaysian ringgit was down only 5%, and the Australian dollar was down 4.43% year-on-year. As a result, Thailand has become the worst performing country in Asia and the Pacific. Bank of Ayudhya Public Company Limited also revealed to Matichon News Agency that damage from the COVID-19 crisis has resulted in Krungsri Research’s forecast for Thailand’s GDP this year to 1.2% from 2.0%.
The main reason for the depreciation of the Thai baht is partly due to the COVID-19 situation in Thailand that seems unlikely to improve anytime soon. There are as many as 17,669 cases, which is a new high since the outbreak. Moreover, the rate of a fully vaccinated population is only 5.2% of the total population. The reason for this is because Thailand has delayed vaccination and there are not enough alternative vaccines to meet the needs of the people. The public health system is dealing with heavy infections and the lockdown measures that have required the closure of many businesses. All of this led investors to lack confidence in the Thai economy. Many have also sold assets that are in Thailand to reduce risk, such as Thai stocks, which are reported to have sold more than 77,817 million baht, and investors in Thailand still do not want to invest in Thailand but return to invest abroad instead. This is a sign that no one cares or wants the Thai baht anymore if the situation to deal with the Covid continues like this.
Another important reason for the depreciation of the Thai baht comes from tourism that has been heavily affected by the Covid situation. In the past, tourism was considered the main channel for earning money in the country over the past period. The World Travel & Tourism Council (WTTC) calculate the proportion of revenue from the tourism business sector to GDP found that Thailand’s income from tourism accounted for about 20% of the GDP in Thailand. And when there are fewer tourists means that the demand for Thai baht is also less. And although now there is a Phuket Sandbox project as the first area to try to open the country again. But it still needs to be monitor whether the results of the open country trial will be effective or not. If the results are good, it may signal the Thai baht to gradually strengthen, but if the results are not as expected and the project is suspended. It may cause the tourism industry in our country to continue to stagnate.
Therefore, the key for Thailand to continue to support the economy and the Thai baht is to speed up vaccination (the effective one) to many people as possible to ease the COVID situation and in parallel with the implementation of a structured and efficient economic policy. To create incentives and bring back investor confidence. If there is no good solution or hurry to fix the problem. The person who will suffer the most and be affected the most is all Thai people.
Thankyou information from
World Bank Data https://data.worldbank.org/indicator/ST.INT.ARVL?locations=TH
Business Today https://www.businesstoday.co/opinions/08/10/2020/51760/