The Baht's Troubling Rise

[Undaunted]

The baht's troubling rise

Bangkok Post Editorial

September 22, 2025

The Thai baht, since the beginning this year, has appreciated nearly 8% against the US dollar. Such an escalation makes baht the strongest among Asian currencies. While a rapid currency appreciation should have been taken a signal of economic strength, the underlying realities paints a far more complex and worrying situation.

Usually, a currency strengthens when domestic interest rates are high; when an economy grows robustly or even when inflation is appropriate and stable. Economic conditions in Thailand, however, have gone in the opposite direction. Interest rates remain too low and so do economic growth and inflation. There is no rational explanation why the Thai currency has gone in the opposite direction.

Attention has therefore turned to the balance of payments. A persistent current account surplus appears to be a key driver.

Economist Supavudh Saicheua, chairman of the National Economic and Social Development Council (NESDC), raised concerns over inflows averaging US$3 billion per quarter over the past two to three years, reflected in the so-called "errors and omissions" line of the balance of payments.

He warned such flows could be distorting the currency and urged regulators to find out why these funds are entering the system -- hinting at possible illicit activities.

Since then, "errors and omissions" have become the focal point of an ongoing debate between the country's two key economic agencies -- the Bank of Thailand (BoT) and the NESDC.

The BoT has been quick to push back. Chayawadee Chai-anant, BoT's assistant governor of the Corporate Relations Group, said the central bank has not found any abnormal inflows and that "net errors and omissions" cannot themselves exert additional pressure on the currency.

Capital flows into Thai bonds this year, amounting to US$1.2 billion net, have been offset by net equity outflows. For the BoT, this represents the normal behaviour of investors seeking yield, not speculation or money laundering as feared.

In the meantime, the Finance Ministry and the BoT are reportedly weighing a new tax on online gold transactions settled in baht.

The move, aimed at curbing the currency's appreciation, raises more questions. Between January and July, gold exports surged 69% to 254 billion baht (about US$8 billion), with shipments to Cambodia attracting particular scrutiny. But is gold really the culprit behind the baht's strength? And would such a measure tackle the underlying fundamentals, or merely paper over them?

What ordinary Thais see is not clear explanation but the glaring disconnect between the country's economic agencies. The NESDC warns of hidden inflows, the BoT insists there are none. The Finance Ministry hints at taxes, investors remain uncertain. This cacophony of voices reflects a deeper problem: a lack of coordination and coherence in economic management.

Thailand now has a new government, a new finance minister, a new central bank governor, and a new NESDC secretary-general. The public has reason to expect a fresh start but what they witness is conflicting statements. That does not bode well for the country's economy, at home or abroad.

The baht's rapid rise is a symptom. The real illness is incoherence among policy makers at the top. It is time for them to collaborate and work on the same page.

https://www.bangkokpost.com/opinion/opi ... bling-rise#

[Gaybutton]

This cacophony of voices reflects a deeper problem: a lack of coordination and coherence in economic management.

What else is new . . . ?

I see that as also a perfect description of the thinking - or lack of thinking - behind the bank account freezes.

[Jun]

September 22, 2025
The Thai baht, since the beginning this year, has appreciated nearly 8% against the US dollar.

The dollar index is down 10.28% YTD. ie The dollar has fallen by 10.28% against a basket of currencies.

There isn't a Thai baht index, but if we created one using the same basket of currencies the USD index uses, we might quickly conclude that the Thai baht has weakened against that index by 2~3 %.

I would suggest that The Bangkok Post don't have a clue.

[Gaybutton]

I would suggest that The Bangkok Post don't have a clue.

Whether they do or they don't, all I know - or care about - is how much I'm getting for the dollar, and for now it is a lot less . . .

[Harald]

September 22, 2025
The Thai baht, since the beginning this year, has appreciated nearly 8% against the US dollar.

The dollar index is down 10.28% YTD. ie The dollar has fallen by 10.28% against a basket of currencies.

There isn't a Thai baht index, but if we created one using the same basket of currencies the USD index uses, we might quickly conclude that the Thai baht has weakened against that index by 2~3 %.

I would suggest that The Bangkok Post don't have a clue.

Dollar index DXY measures US dollar versus a weighted basket of six currencies: euro, Japanese yen, British pound, Canadian dollar,Swedish krona and Swiss franc. It has very little to do with tourists visiting Thailand ( Chinese, Indians, Russians, Malaysians etc).

[Gaybutton]

Warning over strong baht's tourism threat

by Lamonphet Apisitniran

September 22, 2025

The baht's appreciation is threatening to deal a blow to tourism and cause ripple effects on businesses, which are struggling to deal with the sluggish economy, warns the Federation of Thai Industries (FTI).

The strengthening of the baht could cause foreign tourist arrivals to miss this year's target of 40 million, resulting in Thailand losing an opportunity to benefit from their spending during their time in the country.

Foreign travellers' demand for the baht would decrease as they have to spend more to purchase goods and services.

"Thailand is becoming a more expensive tourist destination, compared with other countries," said Kriengkrai Thiennukul, chairman of the FTI.

"Travellers will spend less, affecting hotels, restaurants and other tourism-related businesses."

A slowdown in the tourism industry could also affect new investment projects in this sector, including plans to build new hotels, he added.

According to the Bank of Thailand, the weighted-average interbank exchange rate stood at 31.8 baht to the US dollar as of Sept 19.

This is not good for the Thai tourism industry as many foreign tourists have opted to travel to Vietnam, which saw its annual arrival numbers soar by 21% year-on-year to nearly 14 million last month, said Mr Kriengkrai.

Vietnam has also increased the number of direct flights to the country, implemented a visa policy that facilitates travel, launched new travel campaigns and promoted various types of tourism, including cultural and adventure tourism.

"But Thailand has no new tourist destinations to attract them," said Mr Kriengkrai.

The FTI has called on the Bank of Thailand to look into the baht's value after it appreciated by 8% to become the strongest currency in Southeast Asia.

"We expect the baht's value to weaken and eventually range from 34-35 baht to the dollar," said Mr Kriengkrai.

These rates are suitable for tourists as they would not be required to pay more to purchase products, while exporters would face fewer difficulties when selling their products abroad, he said.

A surge in the value of the baht is not good for exporters because it is a factor that reduces their competitiveness in the global market.

https://www.bangkokpost.com/business/ge ... ism-threat

[Jun]

Dollar index DXY measures US dollar versus a weighted basket of six currencies: euro, Japanese yen, British pound, Canadian dollar,Swedish krona and Swiss franc. It has very little to do with tourists visiting Thailand ( Chinese, Indians, Russians, Malaysians etc).

The Dollar Index has everything to do with The Bangkok Post article.

They looked only at the USDTHB exchange rate and seemed to have forgotten that every exchange rate is for a currency pair.

They discussed only the THB half of the pair & ignored the fact that the USD has fallen against other currencies too. That's the main reason for the exchange rate move they attempt to analyse. Perhaps the weak USD is due to the village idiot being re-elected as president.

They ignored the fact that the THB has fallen against other relevant currencies like the EUR, JPY & GBP. No mention of the CNY or INR.

There are good journalists around, but these days, they sadly seem to be a minority.

[Harald]

Dollar index DXY measures US dollar versus a weighted basket of six currencies: euro, Japanese yen, British pound, Canadian dollar,Swedish krona and Swiss franc. It has very little to do with tourists visiting Thailand ( Chinese, Indians, Russians, Malaysians etc).

The Dollar Index has everything to do with The Bangkok Post article.

They looked only at the USDTHB exchange rate and seemed to have forgotten that every exchange rate is for a currency pair.

They discussed only the THB half of the pair & ignored the fact that the USD has fallen against other currencies too. That's the main reason for the exchange rate move they attempt to analyse. Perhaps the weak USD is due to the village idiot being re-elected as president.

They ignored the fact that the THB has fallen against other relevant currencies like the EUR, JPY & GBP. No mention of the CNY or INR.

There are good journalists around, but these days, they sadly seem to be a minority.

But exchange rates with Chinese Yuan and India Rupee are much more important than , say, British pound because of corresponding number of arrivals in Thailand. And you are wrong: both of these currencies fell versus Thai baht for the same period of one year as a look at exchange rates shows.

[Jun]

And you are wrong: both of this currencies fell versus Thai baht for the same period of one year as a look at exchange rates shows.

Try reading my posts properly before suggesting I'm wrong.

1 I said nothing about the direction of movement of THBCNY or THBINR, other than saying they did not discuss this. So I can't be wrong there.

2 The Bangkok Post is referring to figures since the start of 2025. So that's what I'm using when making comparisons. Just because you choose to pick a different time period, it does not mean I'm wrong.

[Gaybutton]

The lowdown on net errors and omissions

Baht appreciation this year was attributed to a weak dollar, greater clarity in Thai politics and local gold trade.

by Somruedi Banchongduang

September 27, 2025

The baht has continuously appreciated this year, with the Bank of Thailand attributing it primarily to a weaker dollar. Greater clarity in domestic politics lifted investor confidence, and Thailand's gold trade further supported the currency.

Year-to-date the baht has strengthened by around 7% against the dollar. Foreign capital recorded a net outflow from the Thai stock market, but a net inflow into the bond market.

During Sept 1-17, foreign investors posted a net capital outflow of roughly US$100 million from the Thai stock market, while the local bond market had a net inflow of $534 million, according to the central bank.

Yet observers are curious about whether the stronger baht could be partly attributed to an expansion of net errors and omissions (NEO) in the balance of payments, with some speculating this expansion may be linked to unidentified or "grey" money.

What is NEO?

Chayawadee Chai-anant, assistant governor for corporate relations at the central bank, said NEO refers to statistical discrepancies in the balance of payments. The term reflects transactions between residents and non-residents that cannot yet be classified under specific categories.

These activities may involve trade in goods and services, changes in asset holdings between Thai residents and foreigners, or cross-border payments and currency exchanges.

In practice, it is challenging to capture every transaction completely or in real time. As a result, NEO typically arises from two main factors:

1. Delayed data availability, such as foreign direct investment or profit repatriation by foreign companies, which rely on financial statements submitted to the Business Development Department.

2. Incomplete or imprecise data, such as the broad range of tourist expenditures that are initially estimated through models and later reconciled with survey data from the Tourism and Sports Ministry.

The central bank generally publishes preliminary annual balance of payment data in March of the following year, followed by two revisions: one in September of the same year and another in September of the following year. For example, data for 2024 was first released in March 2025 and will be revised in September 2025 and again in September 2026.

Was the 2024 NEO considered high and a factor driving baht appreciation?

To determine whether NEO is elevated, it is more meaningful to assess it relative to total international trade. Countries with higher volumes of trade and cross-border investment typically record larger NEO.

According to Ms Chayawadee, the baht's appreciation against the dollar was not the result of an increase in NEO in the balance of payments, as such entries have already been recorded in the balance of payments accounts.

Based on the central bank's latest data revisions, the amount of NEO in the balance of payments has consistently declined from last year.

In the data revision for September 2024, NEO amounted to $7.3 billion, or roughly 230 billion baht -- less than half of the preliminary March 2024 figure of $15.2 billion, according to the central bank.

She said the decline reflected three main factors. The first is lower total import value. The Customs Department adjusted oil import prices to reflect actual data from importers, which were lower than earlier estimates. This raised the current account balance and reduced NEO by about $2 billion.

Second, adjustments to foreign investors' investment data in Thai businesses, based on financial statements submitted for trade development purposes, reduced NEO by about $2.7 billion.

Third, trade creditors extended payment periods for imported goods to the private sector, easing trade credit repayment burdens in 2024. This reduced NEO by roughly $4.2 billion.

The revised NEO for the balance of payments for March 2025 was around $2 billion, down from $7.3 billion in September 2024.

As a share of Thailand's international trade, NEO was 1% in 2024, below the 10-year historical average of 1.3% and the global average of 2.4%.

Thailand's ratio was also relatively low compared with five other middle-income Asian economies: China (2.8%), Kazakhstan (2.1%), Malaysia (1.3%), Mongolia (1.2%) and Indonesia (0.3%).

Comparing Thailand with Indonesia, the latter's NEO ratio was far lower despite Indonesia's gross domestic income being larger. According to the Bank of Thailand, each country's NEO ratio also depends on the openness of its economy.

Moreover, commodity goods account for a larger share of Indonesia's balance of payments compared with Thailand. As a result, Thailand's calculation base is larger, leading to a lower ratio, according to the Bank of Thailand.

Is NEO considered new money this year?

The NEO under discussion does not represent a new inflow of foreign currency this year. Rather, it is a component of the 2024 balance of payments that has already occurred. Because these transactions cannot be categorised under specific activities, they are recorded as NEO.

For example, a foreigner buys a condo in Thailand and registers as the homeowner, while his Thai wife makes the payment. In such a case, the transaction could be recorded as NEO, as the homeowner and payer do not match, said Ms Chayawadee.

Recording a transaction as NEO does not have any additional impact on the currency, as the effect on the baht's movement already occurred when the transaction took place.

The recent strengthening of the baht against the dollar was attributed to three factors: a weaker dollar as investors expect continued Federal Reserve rate cuts, increased investor confidence following greater clarity in Thai domestic politics, and support from Thailand's gold trade.

The central bank emphasised the importance of distinguishing between NEO in the balance of payments and "grey money". While it is possible that some NEO may involve grey money, this would require official verification, noted the regulator.

How does the regulator monitor grey money?

The central bank reiterated it does not want domestic businesses or transactions that involve corruption or illicit financial activities, and implements measures to prevent them.

1. Promoting digital finance -- encouraging the use of services such as PromptPay to ensure transactions leave a digital footprint that can be traced.

2. Enforcing customer due diligence regulations -- these include know your customer, customer due diligence and enhanced due diligence guidelines. These measures also address mule accounts and ensure financial institutions comply with Anti-Money Laundering Office requirements and terrorism financing regulations.

3. Scrutinising proposals for a financial hub -- some onlookers have voiced concerns that a hub with relaxed regulations could create loopholes for illegal financial activities. The central bank insists such gaps be addressed in advance.

4. Taking a cautious stance on cryptocurrency -- the regulator wants to monitor when these assets are used through unregulated channels, as it poses a higher risk of money laundering due to difficulties in tracking and verification.

https://www.bangkokpost.com/business/ge ... -omissions