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Old 15-03-2007, 11:24
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K2 K2 is offline
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Join Date: Dec 2003
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THB - Now Have a 2-Tier Market

I've been wondering about the 2 Tier market that has developed with the USD/THB exchange rates - namely between the onshore rates as quoted by the Bank of Thailand and the interbank (offshore) rate quoted by Bloomberg et al.

I found this research note by BKK Bank:

http://www.bangkokbank.com/download/...N200701_04.pdf

Due to the capital control (mostly lifted today 15/03) foreign investors had to hedge (fully) their THB brought into Thailand - thus creating this 2 tier market that has had me puzzled for a while.

Now capital controls largely relaxed will see with onshore(BoT) and offshore rates converge - cuurently BoT onshore rate is 34.95 and interbank offshore rate is 33.09 - thats a 5.3% difference (stronger in THB terms).

For BM's CHANGE YOUR MONEY HERE IN THAILAND - NOT in your home country - at the moment even airport money changers will be better than offshore money changers.
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