The baht depreciates – raises interest rates What is the impact? Who benefits and who loses? Thumbsup

The current economic situation is based on uncertainty. Both the cost of living increased currency depreciation and rising interest rates

Today, let’s understand the impact of currency depreciation and interest rate hikes/lowers. Who does it affect? How are you?

The situation of the baht depreciating Who gains and loses benefits

The meaning of the baht depreciation is that Thai baht can be exchanged for foreign currency with less value.

benefit group

– Export business, due to having more income in foreign currency, can be exchanged for more baht

– Overseas business Because there is a return from foreign currency that can be exchanged for more baht.

– tourism business Because some of the income comes from foreigners who use foreign money. making exchange into more baht

disadvantaged group

– Import business due to higher import costs because they have to buy goods in foreign currency

– consumer groups Because the price of goods and services from abroad is higher.

– Groups with foreign debt due to increased debt burden because it requires more baht to pay off foreign currency debt

What effect does the interest rate increase have?

Changes in interest rates affect the economy. with low interest rates Businesses will borrow more money to invest in expanding the business. resulting in economic growth But it will result in higher inflation.

But on the other hand, if the interest rate is at a high level. This will result in an increase in the interest payment burden of the business. make borrowing less the economy will slow down Inflation will also decrease.

Another effect of the interest rate hike is Money will flow to higher yielding places. Therefore, when the return on interest rates is low Investors will move more money to invest in the capital market to find compensation.