CURRENCY CRISIS Thai Baht Surges Past 1997 Level
For the first time in 13 years the Thai baht has fallen under the THB30 level against the US dollar. As of the close of business yesterday the rate stood at THB29.94.
Despite political woes early in the year the baht's advance has strengthened 11% within 2010.
In 1997 the milestone Asian contagion led to a catastrophic devaluation of the Thai currency and played a key role in a regional financial meltdown.
Financial analysts expect the USD rate to further erode and the same scenario is seeing appreciation of key Asian currencies.
For the tourism and property market the net effect comes at a time when there is a dynamic swing towards growing market share for short haul tourism.
Both the British pound and Euro have remained volatile for the last 24 months.
Perhaps the hardest hit in the current scenario are expatriates living on the island who have dollar or pound denominated savings or recurring income. They are being impacted by double digit increases in the cost of living.
This is also playing down in the real estate sector for midscale primary purchasers who will become end users.
For now the west continues to reel from an unclear forward outlook to economic recovery, and Asia is seeing tremendous capital inflows of investment into the markets.