The British pound buys fewer than 40 Thai for the first time since the 2020 panic over the prospect of the Brexit exit from the European Union. Bank tellers and foreign exchange bureaux were offering 39.80 during the past weekend. The UK currency has lost 11 percent of its value against the baht in the past year.
Foreign exchange bankers say that, unusually, welcome events in Thailand are responsible for the shift against the pound and to a lesser extent the US dollar. Thailand’s opening up and cancellation of tourist entry requirements, such as visas and insurance, has already resulted in a surge of international arrivals which are expected to intensify once the Beijing authorities allow charter tours from Chinese cities in addition to scheduled flights.
Christopher Wong, from the OCBC Bank Singapore, adds that the Thai authorities have also said they will combat any resurgence of inflation by hiking interest rates in the banks, a statement which has pleased international financiers. The return of mass tourism is seen as a huge income generator for Thailand, a country heavily dependent on foreign visitors to boost the treasury. The Bank of Thailand also notes a large increase in Russian visitors, many of whom appear to be long stayers anxious to open Thai bank accounts and bring in huge funds by circuitous routes to avoid international sanctions against Moscow.
Meanwhile, Britain faces an uncertain 2023 even though markets are relieved that political tensions appear to have simmered down in UK. But she is experiencing high energy prices, Brexit-induced supply bottlenecks, high consumer prices and a troublesome recession which could last into 2024. The US dollar is also softer as she appears to be ending her policy of rising interest rates to challenge inflation and enters political uncertainty with the House of Representatives falling into the hands of the Republican opposition party anxious to make trouble for the Biden administration.