Thailand's currency troubles aren't as dire as they could be for Thais; it's just bad enough that it makes life easier for tourists without hitting locals too hard.
Bangkok’s backpacker district is throbbing with American chart-toppers as young travellers stroll down Khao San Road in flip-flops. Some are wolfing down styrofoam plates of 30 baht (92 US cents) fried noodles, while others chug alcoholic pop on the kerb to stretch their dollar.
New Yorker Tracy Williams, however, sips his bottle of beer slowly at a sidewalk cafe.
He can afford to do so. The greenback has strengthened against regional currencies, saving him as much as US$300 on food, lodging and transport during his recent four-night holiday in Bali, Indonesia.
The financial consultant is looking forward to the Thai leg of his trip, where the depreciation of the baht — which has weakened about 6 per cent since end-May — promises to save him even more as he goes shopping for a local painting.
The Thai baht — weakened by the outflow of foreign funds as the US eases off its monetary stimulus — is now trading at about 32 to each US dollar. This is a steal for those with greenbacks.
While the Thai economy fell into a technical recession in the first half of the year, its tourist industry remains a consistent bright spot. Some 2.2 million tourists arrived in July, 22.5 per cent more than the same period a year before. This was driven by an increasing number of tourists from China, Malaysia and Russia.
Souvenir shops like Ms Surintip Sovijit’s are making the most of the tourist boom. The shop sells woven bracelets at 10 to 50 baht a piece, and travellers these days have no qualms about scooping up 300 baht worth of the trinkets at one go, she says.
The weaker baht, however, has not hit Thai wallets that hard yet.
Prices in August dipped 0.01 per cent over those in July. Year on year, prices were up 1.59 per cent in August. This is the lowest inflation recorded since October 2009.
This muted effect has largely to do with the kingdom’s economic slowdown, as well as the winding down of large-scale consumption boosting policies like the first car buyer tax rebate scheme.
“We do not expect the baht depreciation alone will translate into significant inflationary pressure,” the Siam Commercial Bank’s Economic Intelligence Centre said in response to The Sunday Times’ queries.
(c)2013 the Asia News Network (Hamburg, Germany). Visit the Asia News Network (Hamburg, Germany) at www.asianewsnet.net/home/. Distributed by MCT Information Services.
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Photo Credit: Tourists at Bangkok's floating market. britsinvade / Flickr
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