Recently, the exchange rate of the Thai baht against the US dollar has risen to its highest level since March 2022, bringing new pressure to Thai exporters. Against the backdrop of a large influx of foreign capital and the weakening of the US dollar, the appreciation trend of the Thai baht has exacerbated the plight of Thailands export industry, attracting high attention from the market and the government.

The Surge of Thai Baht Affects Competitiveness

Affected by overseas investors massive purchases of Thai stocks and bonds, as well as Chinas introduction of stimulus measures to boost risk appetite, the exchange rate of the Thai baht against the US dollar once rose by 0.8%, reaching 32.56 Thai baht per US dollar. This level is the highest in the past 30 months, making the Thai baht the best - performing currency in Asian emerging markets this quarter, second only to the Malaysian ringgit.

The appreciation of the Thai baht has weakened the trade competitiveness of Thai exporters. Since Thai - exported goods are priced in US dollars in the international market, the strengthening of the Thai baht means that export revenues decrease when converted into Thai baht, squeezing profit margins. This is undoubtedly a worse situation for enterprises relying on exports.

The Government and the Central Bank Actively Respond

Facing the rapid appreciation of the Thai baht, the Thai Ministry of Finance and the central bank reacted quickly. Thai Finance Minister Pichai Chunhavajira called on the Bank of Thailand to take interest rate cut measures to slow down the rise of the Thai baht and support economic development. He said that the issue of the strengthening of the Thai baht has been put on the agenda of policymakers.

Pimpan Charoenkwan, an official of the Bank of Thailand, said in a statement that the central bank is closely monitoring the trend of the Thai baht and is ready to respond to any abnormal fluctuations that may affect enterprises and the economy. He emphasized that the central bank will take appropriate measures to ensure exchange rate stability and maintain the healthy development of the economy.

It is reported that the Thai Finance Minister and the central bank governor Sethaput Suthiwartnarueput plan to hold talks next week to discuss the issue of the appreciation of the Thai baht and possible policy response measures. The next interest rate policy meeting of the Bank of Thailand will be held in October, and the market is generally concerned whether the central bank will take interest rate cut actions.

External Factors Drive the Appreciation of the Thai Baht

Analysts pointed out that the appreciation of the Thai baht is mainly driven by external factors. On the one hand, overseas investors interest in the Thai capital market has increased, and a large amount of capital has flowed into the Thai stock and bond markets. On the other hand, the weakening of the US dollar and Chinas introduction of economic stimulus policies have increased investors risk appetite, driving the appreciation of emerging - market currencies including the Thai baht.

Christopher Wong, a foreign exchange strategist at Oversea - Chinese Banking Corporation in Singapore, said that the issue of the strengthening of the Thai baht has attracted the attention of policymakers. However, if the weak US dollar becomes the dominant trend, then the measures of the Thai government and the central bank may not be introduced immediately. He believes that relevant departments may first observe the market trend, but the possibility of taking response measures cannot be ruled out.

Exports and Tourism Under Pressure

The Thai economy is highly dependent on exports and tourism, and these two pillar industries are sensitive to exchange rate changes. The appreciation of the Thai baht has reduced the price competitiveness of Thai products in the international market, which may lead to a decrease in export orders. At the same time, exchange rate changes will also affect tourism revenues.

The Thai Exporters Association has expressed concern about the appreciation of the Thai baht and called on the government and the central bank to take measures to stabilize the exchange rate. They pointed out that if the Thai baht continues to strengthen, it may lead to a decline in exports, having an adverse impact on the overall economy.

Future Trends and Market Expectations

Market analysts believe that the appreciation trend of the Thai baht may continue in the short term, but the long - term trend still depends on the global economic situation and Thailands own economic fundamentals. If the US dollar continues to weaken, emerging - market currencies may continue to benefit, but the policy intervention of the Bank of Thailand may also affect exchange rate changes.

Some experts suggest that the Thai government should comprehensively use monetary and fiscal policies, not only to prevent the too - rapid appreciation of the Thai baht from affecting export competitiveness, but also to maintain stable economic growth. Interest rate cuts are regarded as a possible means, but the impact on inflation and capital flows needs to be weighed.