Off-shore vs. on-shore exchange rates in Thailand
Sep 10th, 2007, 08:14 AM
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Off-shore vs. on-shore exchange rates in Thailand
As many of you know, Thailand announced a change in its exchange rates earlier this year, and announced there will be a substantial difference between on-shore and off-shore exchange rates. I'm looking for anyone with recent experience using an ATM in Thailand with the money coming out of a foreign bank (US, UK, Europe, Australia - not an Asian account).
What country and what bank is your account based in? What kind of exchange rate did you get? Basically, was it similar to the listed online rate (before any bank charges) or was it a much worse rate?
It appears from the Thai Visa forum that there are at least some banks that do give the onshore exchange rate when you take money from an ATM, but it appears it may vary from bank to bank.
What country and what bank is your account based in? What kind of exchange rate did you get? Basically, was it similar to the listed online rate (before any bank charges) or was it a much worse rate?
It appears from the Thai Visa forum that there are at least some banks that do give the onshore exchange rate when you take money from an ATM, but it appears it may vary from bank to bank.
Sep 10th, 2007, 04:58 PM
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Kathie, actually there was no announcement such as you describe, and there is no policy on domestic vs offshore rates (the Bank of Thailand couldn't care less about offshore rates). The policy change you're probably referring to was in regards to the remittance of funds from short term investments, and was intended to slow or stop the strengthening of the Baht. The result was a shortage of Baht in international capital markets, and from there the law of supply and demand took over, and increased the value of the Baht outside of Thailand.
The gap got up to five or six Baht at one point, but currently it's down around two Baht. With the current chaos in money markets, exchange rates are fluctuating by up to two Baht in the space of a week. This means a lot depends on WHEN a transaction is processed. Today's 'onshore' rate may be the 'offshore' rate three days from now, when your bank might actually process the debit. So, I don't think it's as simple as which bank you use.
I still have an account at B of A in the US. I used my ATM/debit card to buy some Nok Air tickets last week, and got an exchange rate of 34+ Baht to the $, which is around the current onshore rate.
The gap got up to five or six Baht at one point, but currently it's down around two Baht. With the current chaos in money markets, exchange rates are fluctuating by up to two Baht in the space of a week. This means a lot depends on WHEN a transaction is processed. Today's 'onshore' rate may be the 'offshore' rate three days from now, when your bank might actually process the debit. So, I don't think it's as simple as which bank you use.
I still have an account at B of A in the US. I used my ATM/debit card to buy some Nok Air tickets last week, and got an exchange rate of 34+ Baht to the $, which is around the current onshore rate.
Sep 10th, 2007, 05:06 PM
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The only time it makes a different is for the credit card expenses for the US card holders. The local banks are making a huge profit from this. If I could only buy my raw materials with the offshore rate and sell my goods at the onshore rate...
Sep 10th, 2007, 05:14 PM
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I did use credit cards but not ATM cards. All of the hotels we stayed at in Thailand converted the charge to Thai baht from dollars before charging the credit card - we know this. I just checked my card charges in dollars to the receipt in Thai baht.
The Peninsula Bangkok converted baht to dollars at 33.91. The Anantara Golden Triangle converted baht to dollars at 31.82...looks to me like they made a bit of money on the exchange as the two charges were made 3 days apart and the rate didn't fluctuate hardly at all during that time. I charged another stay at the Peninsula to Japanese yen account and it was converted at 30, the going rate at the time. Looks like the Peninsula is better about using real rates for conversions.
I'd say you need to be careful with credit card charges from hotels as well...Is there any way we can see the conversion rate beforehand that they use? They just always say it will be charged in baht at the prevailing rate...does that mean it's their own prevailing rate?
The Peninsula Bangkok converted baht to dollars at 33.91. The Anantara Golden Triangle converted baht to dollars at 31.82...looks to me like they made a bit of money on the exchange as the two charges were made 3 days apart and the rate didn't fluctuate hardly at all during that time. I charged another stay at the Peninsula to Japanese yen account and it was converted at 30, the going rate at the time. Looks like the Peninsula is better about using real rates for conversions.
I'd say you need to be careful with credit card charges from hotels as well...Is there any way we can see the conversion rate beforehand that they use? They just always say it will be charged in baht at the prevailing rate...does that mean it's their own prevailing rate?
Sep 10th, 2007, 05:23 PM
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Never mind about the exchange rate comment. Thinking that it must be a mistake, I double checked my math...and being the math wizard I am, even with using a calculator I made a mistake. The Anantara's rate was 33.60...similar to the Peninsula. And I am checking the wrong thing.
We should check the price quoted in dollars for booking and then see what it is charged in baht. Doing that now.
We should check the price quoted in dollars for booking and then see what it is charged in baht. Doing that now.
Sep 10th, 2007, 06:29 PM
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Thanks, Kim for your math on that question.
I appreciate all the info. I had apparently misunderstood part of this confusing on-shore off-shore thing. And in reading the long thread on Thai visa, it appears I'm not the only one.
I typically use my HSBC card for ATM withdrawals, and use AmEX and a Chase Mileage Plus Visa card for charges. I'l be interested to see what kind of exchange rate I get on these.
I appreciate all the info. I had apparently misunderstood part of this confusing on-shore off-shore thing. And in reading the long thread on Thai visa, it appears I'm not the only one.
I typically use my HSBC card for ATM withdrawals, and use AmEX and a Chase Mileage Plus Visa card for charges. I'l be interested to see what kind of exchange rate I get on these.
Sep 10th, 2007, 06:46 PM
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Kathie,
You'll get something close to the current onshore rate for your card expenses. When the local Thai banks, who are the "middleman" in these transactions, pay the US credit card companies they can transfer Baht out of the country and convert it offshore into USD. It's very hard for the regular folks to transfer out Baht!
You'll get something close to the current onshore rate for your card expenses. When the local Thai banks, who are the "middleman" in these transactions, pay the US credit card companies they can transfer Baht out of the country and convert it offshore into USD. It's very hard for the regular folks to transfer out Baht!
Sep 10th, 2007, 06:53 PM
#10
Ok, Kim, now you have to compare those three rates versus the rates that your cc bank used to convert the THB charges to USD.
Or compare the amount in USD charged to your card, minus fees, with the quoted rate. If it is a Visa card then the amount might include a 1% conversion fee that Visa charges.
Or compare the amount in USD charged to your card, minus fees, with the quoted rate. If it is a Visa card then the amount might include a 1% conversion fee that Visa charges.
Sep 10th, 2007, 07:19 PM
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OK..
.Anantara - AMEX converted baht to dollars at 33.60 (fee included...I can't figure out how to determine how much the fee is....1%?)
Peninsula - Citibank converted baht to dollars at 34.21 (fee excluded)
JWMarriott - Citibank converted baht to dollars at 34.16 (fee excluded).
Japanese Post Office Visa card converted baht to yen at 29.29/100 yen and no fees.
.Anantara - AMEX converted baht to dollars at 33.60 (fee included...I can't figure out how to determine how much the fee is....1%?)
Peninsula - Citibank converted baht to dollars at 34.21 (fee excluded)
JWMarriott - Citibank converted baht to dollars at 34.16 (fee excluded).
Japanese Post Office Visa card converted baht to yen at 29.29/100 yen and no fees.
Sep 10th, 2007, 10:13 PM
#15
Then there is no significant difference between the rates that the Pen and JWM used versus the Citibank rates.
A $100 charge at the Pen cost you $100 plus 6 baht. Or about $100.17
That's a difference of less than one-fifth of one percent.
For a $100 charge at JWM, though, you made a profit. They charged 3374 baht but the bank converted your $100 in credit to 3416 baht. You would have made 42 baht per $100 through the two exchanges. Actually would be a discount. And a nice one, currency exchange-wise, at about $1.22 per $100 and probably a mistake in there somewhere. But still a trivial amount.
A $100 charge at the Pen cost you $100 plus 6 baht. Or about $100.17
That's a difference of less than one-fifth of one percent.
For a $100 charge at JWM, though, you made a profit. They charged 3374 baht but the bank converted your $100 in credit to 3416 baht. You would have made 42 baht per $100 through the two exchanges. Actually would be a discount. And a nice one, currency exchange-wise, at about $1.22 per $100 and probably a mistake in there somewhere. But still a trivial amount.
Sep 11th, 2007, 06:28 PM
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I have been in and out of Asia, in particular Thailand, many times over the past 11 years and have always found that I get the best exchange rate when I change my money in Thailand. I find the rates available when you change money in a different country to be quite a bit less than what you can get at the airport.
Thailand changes their exchange rates every day, today you get one rate, tomorrow the rate may be a little different (up or down) but not by much! I don't find a lot of difference between the various banks that change money over. There are lots of large banks and mini banks all over Bangkok and major cities that clearly post the exchange rates for that particular day. Hotels, stores and street vendors usually have a lower rate than what you can get in a bank (unless someone screwed up!)
Big notes like $100 bills get a little more than a $5 bill. Thailand is one place that the exchange rate is a tiny bit more for travelers checks over cash - but the difference is really small!
If you do bring travelers checks I would stick with the larger denominations like $100 or 100 Euro sizes. Any leftover Thai baht can be changed back to your home currency at the airport. With travelers checks you do pay a 33 baht commission to exchange the money over - this is still much cheaper than ATM fees! You don't want to pay a lot of fees for cashing very small denomination travelers checks.
When you use an ATM to get cash I would avoid a lot of small withdrawals and take out the maximum to cut down on lots of ATM fees. Remember you can change any leftover Thai baht back to your currency at the airport.
I avoid using credit cards for any purchases overseas. I use cash. I keep credit cards with me for emergencies only! In particular I would avoid using a credit card for any cheap purchases like in restaurants or small shops - this cuts down on the chance of credit card fraud. Use cash for cheap purchases! Some credit cards have big ATM fees and interest too!
When I need more cash I use a debit card. My debit card is through a credit union which pays for the first 5 ATM charges per month and around $2 for other ATM withdrawals. Take out the maximum to avoid fees. My credit union also sells travelers checks free of commission for their members. When I go on a trip overseas I pick up some travelers checks fee free! I move some money from my bank account to my credit union account to cover any expected cash needs when I am out of the country.
Remember to notify your credit or debit card provider that you will be overseas. Some banks may deny an ATM cash withdrawals from overseas thinking that the card is stolen. I used to read on some of the other Asia travel forums that some ATM's may not accept more than 4 pin numbers.
Use the security box in your hotel to safeguard your cash and valuables. You can record the serial numbers of travelers checks and hundred dollar bills on the internet in an email to yourself. If your TC's come up missing you will have a record of their serial numbers real handy. You can also use an email to record trip itineraries, flight schedules and accounting data and other must remember info. Thailand and most other Asian countries have lots of internet shops all over.
Hal
Thailand changes their exchange rates every day, today you get one rate, tomorrow the rate may be a little different (up or down) but not by much! I don't find a lot of difference between the various banks that change money over. There are lots of large banks and mini banks all over Bangkok and major cities that clearly post the exchange rates for that particular day. Hotels, stores and street vendors usually have a lower rate than what you can get in a bank (unless someone screwed up!)
Big notes like $100 bills get a little more than a $5 bill. Thailand is one place that the exchange rate is a tiny bit more for travelers checks over cash - but the difference is really small!
If you do bring travelers checks I would stick with the larger denominations like $100 or 100 Euro sizes. Any leftover Thai baht can be changed back to your home currency at the airport. With travelers checks you do pay a 33 baht commission to exchange the money over - this is still much cheaper than ATM fees! You don't want to pay a lot of fees for cashing very small denomination travelers checks.
When you use an ATM to get cash I would avoid a lot of small withdrawals and take out the maximum to cut down on lots of ATM fees. Remember you can change any leftover Thai baht back to your currency at the airport.
I avoid using credit cards for any purchases overseas. I use cash. I keep credit cards with me for emergencies only! In particular I would avoid using a credit card for any cheap purchases like in restaurants or small shops - this cuts down on the chance of credit card fraud. Use cash for cheap purchases! Some credit cards have big ATM fees and interest too!
When I need more cash I use a debit card. My debit card is through a credit union which pays for the first 5 ATM charges per month and around $2 for other ATM withdrawals. Take out the maximum to avoid fees. My credit union also sells travelers checks free of commission for their members. When I go on a trip overseas I pick up some travelers checks fee free! I move some money from my bank account to my credit union account to cover any expected cash needs when I am out of the country.
Remember to notify your credit or debit card provider that you will be overseas. Some banks may deny an ATM cash withdrawals from overseas thinking that the card is stolen. I used to read on some of the other Asia travel forums that some ATM's may not accept more than 4 pin numbers.
Use the security box in your hotel to safeguard your cash and valuables. You can record the serial numbers of travelers checks and hundred dollar bills on the internet in an email to yourself. If your TC's come up missing you will have a record of their serial numbers real handy. You can also use an email to record trip itineraries, flight schedules and accounting data and other must remember info. Thailand and most other Asian countries have lots of internet shops all over.
Hal
Sep 11th, 2007, 06:34 PM
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Mr.W, you aren't taking into consideration daily currency fluctuations.
When this on-shore/off-shore issue will really impact is when we're ready to buy a condo and have to transfer (lots of) money to a Thai bank!
When this on-shore/off-shore issue will really impact is when we're ready to buy a condo and have to transfer (lots of) money to a Thai bank!
