Bank of Thailand governor Vitai Ratanakorn said on Saturday that a weaker baht would be more supportive for the economy, adding that there was still room to lower interest rates if required to spur growth.
The baht has appreciated by roughly 6% against the US dollar so far this year, making it Asia’s second-best performing currency. Its strength, however, has raised concerns over the outlook for exports and tourism, two key drivers of Thailand’s economy.
Speaking to reporters in Chiang Mai, Mr. Vitai said the central bank wanted the baht to ease to a level that more accurately reflects current economic conditions. He did not provide a specific target but stressed the need for balance.
He also noted that the currency could weaken further, saying its recent strength was largely influenced by a softer dollar and Thailand’s current account surplus.
In September, the baht reached a four-year high, partly due to its close association with gold prices. Mr. Vitai said the situation should stabilise next year as the current account surplus is expected to narrow.
There is still space to cut interest rates if necessary, he added. “We are reviewing the data. There is room for a further cut,” he said.
Thailand’s headline inflation has remained in negative territory for seven consecutive months, which policymakers have attributed to supply-side issues rather than weak demand.
On October 8, the central bank’s Monetary Policy Committee kept the key rate at 1.50%, after four reductions over the past year. The next meeting is scheduled for December 17, and some economists expect another rate cut.
The economy has faced several challenges, including US tariffs, high household debt and the stronger baht. Growth in the third quarter was just 1.2% year-on-year, the slowest in four years, while GDP fell 0.6% compared with the second quarter.
The central bank forecasts growth of 2.2% this year and 1.6% next year, down from last year’s 2.5%.
To address the unusual strength of the baht, the government of Prime Minister Anutin Charnvirakul has launched a “Connect the Dots” task force to probe irregular money flows.
Authorities also plan to create a special team to track suspicious transactions linked to online gambling, scam accounts and other forms of “grey money”.
Mr. Vitai said the Bank of Thailand was prepared to act if speculative flows distorted the currency. But he cautioned that while volatility can be reduced, exchange-rate trends cannot be fully reversed.
