Baht at four-year high
Thailand’s new Prime Minister Anutin Charnvirakul has raised the alarm after the baht hit a four-year peak, warning that the sudden surge could destabilise the economy. At a hastily arranged emergency meeting with Finance Minister Ekniti Nitithanprapas and banking chiefs, Anutin vowed to intervene before the twin pillars of exports and tourism are crippled.
The figures are stark. The baht stood at 31.75 against the US dollar, its strongest level since June 2021. Since January, the currency has gained 7–8 percent, driven by a weakening dollar, speculation over US Federal Reserve rate cuts, and heavy capital inflows into Thai assets.
What delights investors has rattled policymakers. “The strength of the baht must be urgently addressed,” Anutin said after Sunday’s meeting. Details of the government’s plan will be released later, he added.
Exports and tourism under strain
More than 60 percent of Thailand’s GDP depends on exports, from electronics and automobiles to agricultural goods. A stronger baht makes them more expensive on the global market, and with US tariffs already at 19 percent, competitiveness is slipping fast.
The tourism industry, which contributes 12 percent of GDP and employs millions, is also at risk. A stronger baht means higher prices for foreign visitors. “In the long term, this could deter tourists,” warned Thienprasit Chaiyapatranun, president of the Thai Hotels Association.
Central Bank scrambles to act
The Bank of Thailand has been selling baht and buying dollars in an effort to curb the rise, pushing reserves to a record $289.68 billion. Yet volatility remains high at 8.7 percent this year. “Businesses must protect themselves with hedging strategies,” cautioned Burin Adulwattana of the Kasikorn Research Center.
Analysts believe the newly appointed central bank and finance ministry leadership may not be able to mount a full response until later in 2025.
Anutin’s fragile start in office
Anutin, just 10 days into his premiership, faces a daunting first test. The 59-year-old took power on September 5 after the Constitutional Court ousted Paetongtarn Shinawatra. Leading a minority government, he has pledged fresh elections within four months. Until then, he must steady the economy.
Forecasts are divided. Some analysts expect the baht to climb further, to as strong as 30.50–31.00 against the dollar. Others predict a sharp correction to 35.50 by year’s end if trade tensions escalate.