Thai baht at 4-year high ahead of rate decision
by Bloomberg News
December 15, 2025
The baht has climbed to its highest rate against the US dollar in more than four years, heaping pressure on the central bank to stem the rally ahead of its policy decision this week.
The Bank of Thailand tightened gold traders’ foreign exchange forward transactions on Monday after the currency edged higher to 31.523 per dollar, holding at the strongest since June 2021. The baht has advanced more than 8% this year, making it the second best performer in Asia amid record gold prices and a weaker greenback.
The currency’s persistent strength is putting pressure on the BoT to signal further easing at its meeting on Wednesday as the nation’s exporters feel the added pinch from new US tariffs. While officials have managed to weaken gold’s influence on the baht, the current peak tourism season is giving the currency fresh tailwinds.
“We see the excessive baht strength as unwelcome given sluggish growth, disinflation, and political uncertainty,” Wee Khoon Chong, a senior strategist at BNY, wrote in a note to clients. “Baht strength is one reason we still see easing risk in 2026.”
The baht’s rally may lose some steam as an ongoing border clash between Thailand and Cambodia undermines investor confidence. Political risk is also set to weigh ahead of an election to be held as early as January.
The baht is likely to continue to benefit from a softer US dollar environment and positive fourth quarter seasonality, Barclays Bank Plc strategists including Audrey Ong wrote in a note to clients. That said, “baht political risk premium could build into the new year should it take time to form the new government.”
https://www.bangkokpost.com/business/ge ... e-decision
The Baht's Troubling Rise
-
Gaybutton
- Posts: 24325
- Joined: Sat Jul 31, 2010 11:21 am
- Location: Thailand
- Has thanked: 3 times
- Been thanked: 1671 times
-
Gaybutton
- Posts: 24325
- Joined: Sat Jul 31, 2010 11:21 am
- Location: Thailand
- Has thanked: 3 times
- Been thanked: 1671 times
Re: The Baht's Troubling Rise
This is part of the article. Click the link at the end to read the full article.
Economist predictions are notoriously unreliable, but the way the exchange rates have been going . . . well, we'll see.
_________________________________
Thai baht to strengthen until mid-2026
Yanyong Thaicharoen, Chief Executive Officer of Economic Research and Sustainability at Siam Commercial Bank, said that Thailand's currency advantage has now diminished, and the strong baht could affect the country's competitiveness.
In the short term, the baht may continue to strengthen against regional currencies and trade partners from late 2025 through Q1 2026. This could be due to interest rate cuts by both the Monetary Policy Committee (MPC) and the US Federal Reserve (Fed), as well as gold prices, which continue to support the baht’s appreciation.
However, by mid-2026, the baht may depreciate slightly as the US interest rate cycle declines and investors start shifting their funds back. Despite this, the real effective exchange rate (REER) shows that the baht remains stronger than other regional currencies.
The strong baht is affecting Thailand’s agricultural exports, which rely heavily on domestic production and labour, leading to significant impacts. In contrast, electronics, which depend largely on imported raw materials, may benefit from lower import costs.
The tourism sector may also face challenges, especially in comparison with Vietnam, as tourism markets are highly competitive in terms of prices. If the Thai baht strengthens while the Vietnamese dong weakens, the currency gap will widen, potentially affecting tourists' decisions.
"If the baht weakens, it could help absorb some of the economic challenges domestically, supporting exports and tourism. However, the current trend of a strengthening baht may exacerbate problems instead of improving the situation," Yanyong concluded.
https://www.nationthailand.com/business ... y/40059906
Economist predictions are notoriously unreliable, but the way the exchange rates have been going . . . well, we'll see.
_________________________________
Thai baht to strengthen until mid-2026
Yanyong Thaicharoen, Chief Executive Officer of Economic Research and Sustainability at Siam Commercial Bank, said that Thailand's currency advantage has now diminished, and the strong baht could affect the country's competitiveness.
In the short term, the baht may continue to strengthen against regional currencies and trade partners from late 2025 through Q1 2026. This could be due to interest rate cuts by both the Monetary Policy Committee (MPC) and the US Federal Reserve (Fed), as well as gold prices, which continue to support the baht’s appreciation.
However, by mid-2026, the baht may depreciate slightly as the US interest rate cycle declines and investors start shifting their funds back. Despite this, the real effective exchange rate (REER) shows that the baht remains stronger than other regional currencies.
The strong baht is affecting Thailand’s agricultural exports, which rely heavily on domestic production and labour, leading to significant impacts. In contrast, electronics, which depend largely on imported raw materials, may benefit from lower import costs.
The tourism sector may also face challenges, especially in comparison with Vietnam, as tourism markets are highly competitive in terms of prices. If the Thai baht strengthens while the Vietnamese dong weakens, the currency gap will widen, potentially affecting tourists' decisions.
"If the baht weakens, it could help absorb some of the economic challenges domestically, supporting exports and tourism. However, the current trend of a strengthening baht may exacerbate problems instead of improving the situation," Yanyong concluded.
https://www.nationthailand.com/business ... y/40059906
Re: The Baht's Troubling Rise
That's just the opinion of one analyst team.
The current exchange rate reflects the consensus views of all the participants in the market.
If they all thought the baht was going to rise, it would have already done so.
So it follows that there are probably equally well qualified people holding an opposing view.
The current exchange rate reflects the consensus views of all the participants in the market.
If they all thought the baht was going to rise, it would have already done so.
So it follows that there are probably equally well qualified people holding an opposing view.
Re: The Baht's Troubling Rise
The advantage of a strengthening baht is cheaper imports and downward pressure on prices. Not good for tourists/visitors or those expats dependent on external funds. May be, hopefully the government will use some of its levers...
-
Gaybutton
- Posts: 24325
- Joined: Sat Jul 31, 2010 11:21 am
- Location: Thailand
- Has thanked: 3 times
- Been thanked: 1671 times
Re: The Baht's Troubling Rise
As I have admitted many times, I understand virtually nothing about economics. I simply live with whatever the exchange rate happens to be at the time my pension money comes in. But these two articles seem to me to indicate that sooner or later at least these particular authors expect the baht to crash.
No complaints from me if they are right and that happens - and I like the idea of sooner rather than later . . .
_____________________________________________________________________
Triple Threat: Thai Authorities Launch Emergency Measures to Curb Surge in Baht
Financial regulators move to tax and regulate online gold trading as the Thai currency outpaces regional rivals, threatening economic stability.
by THE NATION
December 23, 2025
Thailand’s financial authorities have staged a dramatic intervention to halt the relentless appreciation of the Thai Baht, unveiling a three-pronged strategy aimed squarely at the nation’s booming online gold trade.
The emergency measures were announced during a joint press conference on Tuesday afternoon following an urgent meeting between the Ministry of Finance, the Bank of Thailand (BOT), and the Securities and Exchange Commission (SEC).
The move comes as the Baht outshines its regional peers, fuelled by a weakening US Dollar and record-breaking surges in gold prices.
Ministy of Finance revealed that since the start of 2025, the Baht has strengthened by a staggering 9.4 per cent against the US Dollar.
A primary driver of this volatility is Thailand’s unique relationship with gold.
As gold prices hit historic highs, local gold firms have engaged in massive sales of foreign currency.
The daily volume of gold trading has reached such significant levels that it now rivals the total trading volume of the Stock Exchange of Thailand.
During peak periods, net US Dollar sales from gold companies have accounted for up to 50 per cent of the nation’s total net sales, placing immense upward pressure on the Baht.
The Three-Point Intervention
To decouple the gold market’s volatility from the national currency, regulators have agreed on the following mandates:
Mandatory Data Transparency: The Revenue Department will now require online gold investment platforms to submit comprehensive transaction data. This brings the sector in line with existing electronic platforms for goods and services, allowing for stricter oversight of capital flows.
Specific Business Tax (SBT): Authorities are evaluating the implementation of a Specific Business Tax on the sale of gold bullion via online platforms. This fiscal measure is designed to cool speculative trading that often triggers sudden currency spikes.
Volume Ceilings: The Bank of Thailand is considering a regulatory "ceiling" on gold transaction volumes. By limiting the scale of trades on online platforms, the BOT aims to prevent concentrated bursts of dollar-selling from destabilising the Baht.
Clarification on Digital Assets
Amidst the intervention, the SEC moved to dispel rumours that stablecoin trading was contributing to the currency's strength.
Officials clarified that USDT transactions account for a mere 1.22 per cent of total foreign exchange inflows, and the conversion of USD to Thai Baht by digital asset firms represents just 0.17 per cent of the 29.1 trillion Baht total.
Consequently, digital assets were deemed to have "no significant impact" on the current crisis.
The three agencies have pledged to maintain a "vigilant watch" over the currency markets, warning that further measures may be deployed if the Baht continues to deviate from economic fundamentals.
https://www.nationthailand.com/business ... e/40060219
______________________________________________________
The Thai baht that looks too strong and the money no one sees
By Victor Wong (Peerasan Wongsri)
December 24, 2025
The Thai baht has strengthened to around 31.15 per US dollar. On the surface, this may appear reassuring. In reality, it should raise uncomfortable questions. This appreciation has occurred against the direction of the Dollar Index, and at a time when Thailand’s domestic economy is not expanding fast enough to justify such currency strength. Exports remain fragile, investment growth is uneven, and household debt is stubbornly high.
Currencies do not move like this by accident. For a national currency to strengthen so sharply in less than a year, the inflows involved cannot be modest. They must be large, sustained, and systemic on a scale comparable to national budgetary flows. In other words, money big enough to move the market itself. According to findings linked to the Bank of Thailand, one notable factor has been unusually high volumes of online gold trading, followed by the conversion of US dollars into baht through digital platforms. As dollars are sold and baht is aggressively bought, the currency naturally appreciates. Yet this has little to do with productivity, exports, or the real economy.
Alongside this sits a far more sensitive issue, grey money. It is widely estimated that funds linked to online scams and digital fraud circulating within Thailand may reach 200 billion baht. Of this, authorities have reportedly managed to freeze only a fraction measured in mere tens of billions. The gap between these numbers speaks volumes about the limits of enforcement in a digital financial ecosystem. And this does not include funds moving outside the traditional banking system altogether. Years ago, I warned that once online money systems became dominant, countries would begin to lose control over capital flows both inbound and outbound. That warning no longer sounds theoretical.
The real issue is not whether the baht is strong or weak. It is that large volumes of money are entering Thailand without passing through the central banking system. There are now multiple applications widely used by the public that offer better exchange rates, lower fees, and near instant transfers. Funds in the hundreds of thousands even millions can be moved from Europe to Thailand within an hour, often without meaningful visibility for monetary authorities. For individuals, this is convenience. For a nation, it is something else entirely. When capital flows bypass regulatory oversight, the state gradually loses its ability to manage monetary stability, enforce financial integrity, and understand what is truly driving its currency.
A strong baht may look impressive on paper. But if that strength is built on money the system cannot see, trace, or control, it is not a sign of health it is a warning. And in finance, warnings are usually ignored right up until the moment they are no longer theoretical.
https://www.pattayamail.com/latestnews/ ... ees-530364
No complaints from me if they are right and that happens - and I like the idea of sooner rather than later . . .
_____________________________________________________________________
Triple Threat: Thai Authorities Launch Emergency Measures to Curb Surge in Baht
Financial regulators move to tax and regulate online gold trading as the Thai currency outpaces regional rivals, threatening economic stability.
by THE NATION
December 23, 2025
Thailand’s financial authorities have staged a dramatic intervention to halt the relentless appreciation of the Thai Baht, unveiling a three-pronged strategy aimed squarely at the nation’s booming online gold trade.
The emergency measures were announced during a joint press conference on Tuesday afternoon following an urgent meeting between the Ministry of Finance, the Bank of Thailand (BOT), and the Securities and Exchange Commission (SEC).
The move comes as the Baht outshines its regional peers, fuelled by a weakening US Dollar and record-breaking surges in gold prices.
Ministy of Finance revealed that since the start of 2025, the Baht has strengthened by a staggering 9.4 per cent against the US Dollar.
A primary driver of this volatility is Thailand’s unique relationship with gold.
As gold prices hit historic highs, local gold firms have engaged in massive sales of foreign currency.
The daily volume of gold trading has reached such significant levels that it now rivals the total trading volume of the Stock Exchange of Thailand.
During peak periods, net US Dollar sales from gold companies have accounted for up to 50 per cent of the nation’s total net sales, placing immense upward pressure on the Baht.
The Three-Point Intervention
To decouple the gold market’s volatility from the national currency, regulators have agreed on the following mandates:
Mandatory Data Transparency: The Revenue Department will now require online gold investment platforms to submit comprehensive transaction data. This brings the sector in line with existing electronic platforms for goods and services, allowing for stricter oversight of capital flows.
Specific Business Tax (SBT): Authorities are evaluating the implementation of a Specific Business Tax on the sale of gold bullion via online platforms. This fiscal measure is designed to cool speculative trading that often triggers sudden currency spikes.
Volume Ceilings: The Bank of Thailand is considering a regulatory "ceiling" on gold transaction volumes. By limiting the scale of trades on online platforms, the BOT aims to prevent concentrated bursts of dollar-selling from destabilising the Baht.
Clarification on Digital Assets
Amidst the intervention, the SEC moved to dispel rumours that stablecoin trading was contributing to the currency's strength.
Officials clarified that USDT transactions account for a mere 1.22 per cent of total foreign exchange inflows, and the conversion of USD to Thai Baht by digital asset firms represents just 0.17 per cent of the 29.1 trillion Baht total.
Consequently, digital assets were deemed to have "no significant impact" on the current crisis.
The three agencies have pledged to maintain a "vigilant watch" over the currency markets, warning that further measures may be deployed if the Baht continues to deviate from economic fundamentals.
https://www.nationthailand.com/business ... e/40060219
______________________________________________________
The Thai baht that looks too strong and the money no one sees
By Victor Wong (Peerasan Wongsri)
December 24, 2025
The Thai baht has strengthened to around 31.15 per US dollar. On the surface, this may appear reassuring. In reality, it should raise uncomfortable questions. This appreciation has occurred against the direction of the Dollar Index, and at a time when Thailand’s domestic economy is not expanding fast enough to justify such currency strength. Exports remain fragile, investment growth is uneven, and household debt is stubbornly high.
Currencies do not move like this by accident. For a national currency to strengthen so sharply in less than a year, the inflows involved cannot be modest. They must be large, sustained, and systemic on a scale comparable to national budgetary flows. In other words, money big enough to move the market itself. According to findings linked to the Bank of Thailand, one notable factor has been unusually high volumes of online gold trading, followed by the conversion of US dollars into baht through digital platforms. As dollars are sold and baht is aggressively bought, the currency naturally appreciates. Yet this has little to do with productivity, exports, or the real economy.
Alongside this sits a far more sensitive issue, grey money. It is widely estimated that funds linked to online scams and digital fraud circulating within Thailand may reach 200 billion baht. Of this, authorities have reportedly managed to freeze only a fraction measured in mere tens of billions. The gap between these numbers speaks volumes about the limits of enforcement in a digital financial ecosystem. And this does not include funds moving outside the traditional banking system altogether. Years ago, I warned that once online money systems became dominant, countries would begin to lose control over capital flows both inbound and outbound. That warning no longer sounds theoretical.
The real issue is not whether the baht is strong or weak. It is that large volumes of money are entering Thailand without passing through the central banking system. There are now multiple applications widely used by the public that offer better exchange rates, lower fees, and near instant transfers. Funds in the hundreds of thousands even millions can be moved from Europe to Thailand within an hour, often without meaningful visibility for monetary authorities. For individuals, this is convenience. For a nation, it is something else entirely. When capital flows bypass regulatory oversight, the state gradually loses its ability to manage monetary stability, enforce financial integrity, and understand what is truly driving its currency.
A strong baht may look impressive on paper. But if that strength is built on money the system cannot see, trace, or control, it is not a sign of health it is a warning. And in finance, warnings are usually ignored right up until the moment they are no longer theoretical.
https://www.pattayamail.com/latestnews/ ... ees-530364
Re: The Baht's Troubling Rise
The articles start with an assumption that the baht is too strong.
I've yet to see any credible explanation of why they consider it to be too strong, so why accept that assumption?
Arguably, currencies like the USD and the GBP are too strong, as both countries are only capable of running horrific balance of trade deficits with current rates.
I've yet to see any credible explanation of why they consider it to be too strong, so why accept that assumption?
Arguably, currencies like the USD and the GBP are too strong, as both countries are only capable of running horrific balance of trade deficits with current rates.
That's the key point. We just have to adapt to whatever is put in front of us.
-
Gaybutton
- Posts: 24325
- Joined: Sat Jul 31, 2010 11:21 am
- Location: Thailand
- Has thanked: 3 times
- Been thanked: 1671 times
Re: The Baht's Troubling Rise
From my simplistic point of view - if the exchange rate means I'm getting less money per US dollar, then the baht is too strong . . .
Re: The Baht's Troubling Rise
I'm sure we would all love a weak baht.
However, to quote Ray Dalio: "Don’t confuse what you wish were true with what is really true."
However, to quote Ray Dalio: "Don’t confuse what you wish were true with what is really true."
-
Gaybutton
- Posts: 24325
- Joined: Sat Jul 31, 2010 11:21 am
- Location: Thailand
- Has thanked: 3 times
- Been thanked: 1671 times
Re: The Baht's Troubling Rise
Now you know why I don't like Ray Dalio . . .
And now you know why I do like Adit Chairattananont . . .Adit Chairattananont wrote:the most suitable exchange rate would be 40 baht per dollar
_______________________________________________________________________________________
Overstrong baht threatens Thailand’s tourism price competitiveness as ATTA eyes 39m arrivals in 2026
by Phonphailin Chullaphan
December 24, 2025
ATTA warns an overstrong baht could make Thailand pricier than rivals like Japan and Vietnam, but forecasts 39m foreign arrivals in 2026, led by nearly 9m Chinese tourists.
Thailand’s tourism industry is warning that an “overstrong” baht could undermine the country’s price competitiveness from the late-2025 high season through 2026, making Thai travel and services appear more expensive to foreign visitors compared with regional rivals such as Japan and Vietnam.
Adit Chairattananont, secretary-general of the Association of Thai Travel Agents (ATTA), said that if the baht strengthens beyond 30 to the US dollar, it could weigh on tourism for an extended period. He argued that Thailand already has the highest cost of living in ASEAN, and a stronger currency adds further pressure at a time when competition for international tourists is intensifying.
He pointed to Vietnam as a major competitor, saying it offers similar natural and environmental attractions but at a lower cost. Vietnam, he added, can market itself as a fresher destination and does not face the same tourist safety concerns.
Adit said that when the baht strengthens while Thailand’s economy is not performing well, the problem becomes more severe and tourism becomes harder to compete. In his view, the most suitable exchange rate would be 40 baht per dollar, similar to the period after the 1997 Asian financial crisis, when the baht was stable and supportive of both exports and tourism.
He added that Thailand’s fiscal position is currently weak, export growth is not strong, inbound tourism is contracting, and household debt remains high. Against that backdrop, he said, the baht should at least weaken back to around 35 per dollar, similar to the level seen in 2019, when Chinese group tours to Thailand were booming before the Covid-19 pandemic.
As an example, he said Chinese tourists last year could exchange 1 yuan for about 5.4 baht, but can now get only around 4.4 baht per yuan — a drop of about 20% — prompting many to choose cheaper destinations first and visit Thailand later.
“The Bank of Thailand should manage the baht at an appropriate level,” Adit said. “With Thailand’s economy not doing well, exports and tourism still under pressure, and household debt this high, Thai people do not have much money. From the private sector’s perspective, the baht is unusually strong, possibly driven by surging gold prices, abnormal transactions, or cryptocurrency-related flows that are hard to control.”
https://www.nationthailand.com/news/tourism/40060241
Re: The Baht's Troubling Rise
Ray Dalio knows more about markets and exchange rates than that idiot writing in The Nation ever will.
He undoubtedly knows of all the main psychological biases as well. Including optimism bias and confirmation bias.
He undoubtedly knows of all the main psychological biases as well. Including optimism bias and confirmation bias.