Surging baht shatters dreams of easy retirement
Brian Maxey moved to Thailand from the UK expecting his sterling pension to afford him an easy retirement. Instead, he is finding it harder to meet his visa’s financial stipulations because of the strong baht.
The pressure on foreign pensioners is just one example of how the baht’s sharp appreciation is rippling through Thailand. The currency is the world’s top performer against the dollar over five years, hurting export competitiveness and putting the economy on course for the weakest growth since 2014.
The Thai government issued almost 80,000 retirement visas last year, a climb of 30% from 2014. To qualify, foreigners must show a deposit of THB800,000 (USD26,176) in a Thai bank or have a monthly income of THB65,000. Another route is to have income and deposits totalling THB800,000 combined.
Britons accounted for the largest number of retirement visas in 2018, Immigration Bureau data shows. They were followed by Americans, Germans, Chinese, and Swiss pensioners seeking affordable, sun-dappled golden years.
Once best known for crashing and sparking the 1997 Asian Financial Crisis, the baht is today seen as a haven by global investors. A trade surplus and annual foreign tourism receipts exceeding USD60b underpin its resilience.
The currency has appreciated more than 6% against the dollar so far in 2019, the best performer in a basket of Asian economies tracked by Bloomberg. Some pensioners are already voting with their feet, according to Niels Colov, who moved from Denmark about 40 years ago and helps to organise a club for expats in Pattaya. At the same time, the cost of living in Thailand remains lower than in developed nations such as the US or in Europe, and officials continue to promote it as a retirement destination.
Baht strength leaves Pattaya retiree Maxey’s GBP1,000 (USD1,229) pension far short of the minimum monthly requirement. As a result, he maintains the equivalent of a GBP22,000 deposit to satisfy the bank savings rule when renewing his visa. – Bloomberg News.
The US Dollar Index (DXY) lost 0.16% to 98.864 on Thursday (3 October). The pound climbed 0.24% to USD1.2332, the euro was little changed at USD1.0965, and the Japanese yen strengthened 0.24% to 106.92 per dollar.
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