The Thai baht has surged to its strongest level in more than four years, prompting calls for regulators to step in and contain the rapid appreciation that risks damaging exporters and the wider economy.
On Tuesday, the baht reached 31.58 against the US dollar, the firmest level since 2019, strengthening from Monday’s close of 31.81, according to Kasikorn Research Center (K-Research). The rise came as other regional currencies also gained ground, fuelled by a weakening dollar.
“The dollar has faced selling pressure recently on expectations that the Federal Reserve will cut US interest rates by more than 25 basis points at its meeting next week,” said Kanjana Chockpisansin, head of research in the banking and financial sector at K-Research, speaking to the Bangkok Post.
“The baht has risen sharply and stronger than regional peers since Thursday, partly supported by a more stable domestic situation. Foreign funds are increasing in the Thai bond market, with inflows up to 10 billion baht on Monday and Tuesday alone.”
So far this year, the baht has strengthened 7.7% against the dollar, according to K-Research. Ms Kanjana noted, “The baht is likely to appreciate further, possibly hitting 31.50 to the dollar.”
Market Voices Call for Intervention
Market participants have grown increasingly vocal about the risks of a runaway baht. Wikij Tirawannarat, senior vice-president at Bualuang Securities, said regulators need to intervene.
“As the US sent a clear signal recently about monetary policy easing, the baht has been appreciating quickly. There is a need to weaken the Thai currency so the tourism and hotel sectors will benefit,” he said.
Nuttawut Wongyaowarak, head of research at Globlex Securities, shared similar concerns. “While importers are benefiting from the strong baht, the Thai economy is hurting more as the country is export-oriented,” he said.
The Bank of Thailand has signalled readiness to step in. Pimpan Charoenkwan, assistant governor for financial markets, said the central bank is monitoring the situation closely.
She explained that the recent appreciation of regional currencies, including the baht, has largely been driven by a weaker dollar as markets expect the Fed to ease monetary policy.
The central bank is also considering measures to reduce the baht’s volatility and counter the heavy influence of gold trading on exchange rates.
Poj Aramwattananont, chairman of the Thai Chamber of Commerce, argued the baht’s rise is disconnected from Thailand’s real economic conditions. He warned that it directly hurts export, tourism and agricultural industries, which are key drivers of growth.
He also pointed to Thailand’s substantial gold holdings as a factor. Rising global gold prices often lead to sales in foreign currencies before being converted into baht, creating strong demand for the local currency.
Another driver may be increased fund inflows linked to cryptocurrencies. The Thai Chamber and the Joint Standing Committee on Commerce, Industry and Banking have proposed separating the gold balance to better measure its impact.
“An overly strong baht, which does not reflect the real potential of the Thai economy, will jeopardise our competitiveness,” said Mr. Poj.
“We urge the relevant government agencies to implement appropriate measures to maintain the baht at the level that accurately reflects true economic conditions and does not undermine the competitiveness of Thai businesses.”
Impact on Exporters and Food Trade
Exporters are already feeling the strain. Visit Limlurcha, president of the Thai Future Food Trade Association, said if the baht continues to appreciate for another week or two, exporters may delay taking new orders out of concern for falling income.
He explained that at 32–33 baht per dollar, exporters can earn 2–3 baht profit on products costing 30 baht. But at 31 baht to the dollar, some face losses.
Small entrepreneurs, he added, may not benefit from hedging tools to offset the risk.
Mr. Visit warned that baht strength also affects crop prices, as producers may delay production until orders are confirmed. If the baht continues to climb, food exports could grow only 3% this year or even decline by the same margin compared with last year.
On the other hand, if the baht weakens, food exports are projected to expand by 5–7% from last year’s value of 1.64 trillion baht.
“The government must urgently address baht appreciation because it is driven by speculation on gold and cryptocurrencies, rather than the real sector. This speculation affects real business operations,” Mr. Visit said.
