Thai Baht Continues to Slide
The Thai baht extended its decline last week, at one point trading at 32.53 baht per US dollar—the weakest level since late August. This downward movement stands in contrast to the recent modest gains seen in many other Asian currencies.
According to a recent analysis by Kasikorn Research, the baht is expected to trade between 32.00 and 32.80 per US dollar during the week of October 6–10. Four key factors will influence the currency’s direction: September inflation data, the Bank of Thailand’s Monetary Policy Committee meeting on October 8, global gold prices, and capital flows from foreign investors.
Capital Outflows Pressure the Market
Between September 29 and October 3, foreign investors significantly reduced their exposure to the Thai market. Kasikorn Research reports net sales of Thai equities worth 3.53 billion baht and a further reduction of 279 million baht in Thai bond holdings.
Analysts interpret this as a clear sign of growing caution among international investors, driven by uncertainty over US Federal Reserve policy and ongoing tensions surrounding the US budget. As a result, the baht’s brief attempt to rebound at the start of the week failed to gain traction.
Volatile Stock Markets, Tepid Recovery
The Thai stock market experienced notable volatility last week, though it managed a modest recovery by week’s end. The SET Index closed on Friday, October 3, at 1,293.61 points, up 1.16 percent from the previous week. Average daily trading volume rose by 6.56 percent to 38.77 billion baht.
In contrast, the mai Index, which tracks smaller companies, fell by 1.81 percent to 246.19 points. Profit-taking in large-cap stocks from the electronics, energy, and banking sectors contributed to interim declines, while recent ratings from Fitch also had a dampening effect.
Looking Ahead: Key Events in Focus
For the current trading week, Kasikorn Securities expects the SET Index to fluctuate between 1,270 and 1,315 points. Market participants are closely monitoring the Bank of Thailand’s interest rate decision on October 8, September’s Consumer Price Index (CPI) data, and any progress in the US budget negotiations.
Additional global cues include retail sales figures from the Eurozone, Japan’s producer price index, and fresh statements from leading US Federal Reserve officials.
Baht Remains Vulnerable
As long as uncertainty persists regarding the US budget, global interest rate trends, and gold prices, the Thai baht is likely to remain under pressure. Experts anticipate further short-term depreciation, especially if capital outflows continue and there are no positive signals from the domestic economy.
At a time when many Asian currencies are showing stability, the baht once again serves as a barometer for Thailand’s economic resilience in the face of global turbulence.