BANGKOK, THAILAND – Thailand’s currency hit a five-year high, triggering stark warnings from top officials about mounting risks to exports, tourism and economic growth.
Finance minister warns of heavy growth losses
At the World Economic Forum in Davos, Finance Minister Ekniti Nitithanprapas described the situation as a very serious concern for the export‑driven economy.
“Thailand is a small, open economy. We are a net exporting country. The appreciation of the baht is affecting our economy,”
said Ekniti Nitithanprapas, finance minister. Each gain of one baht against the US dollar was estimated to cost Thailand 0.1 to 0.2 percentage points of growth, a sharp blow with overall expansion expected at only about 2 percent this year.
Central bank concedes limited power over markets
In Bangkok, central bank governor Vitai Ratanakorn used even stronger language about the authorities’ constraints. He said the Bank of Thailand’s interventions had had only “minimal impact” on the exchange rate around 31 baht per US dollar, a level he said threatened international competitiveness.
“We do not have enough power to bring the baht to a level that weakens it as much as others would like,”
said Vitai Ratanakorn, central bank governor.
Speculation and gold-linked trading under scrutiny
According to Ekniti, three main drivers stood behind the currency’s strength: a weak US dollar, Thailand’s high current account surplus and speculative capital flows. A major disruptive factor was online trading in baht backed by gold, which speculators used to bet on a strong currency, further fuelling its rise. The government and central bank were preparing clear supervisory rules for this market, with new regulations due to be presented on 29 January.
Exporters and tourism feel the squeeze
The impact of the strong currency had already been felt across key sectors. Exporters receiving dollars for their goods were getting fewer baht in return, eroding their margins and competitiveness. Thailand also became more expensive as a tourist destination, with holidays costing visibly more for visitors from Europe and the United States, threatening to choke off the fragile recovery in travel.
Political stakes rise ahead of February election
The currency crisis hit just weeks before the parliamentary election on 8 February, intensifying pressure on the government. Major parties on the campaign trail were promising measures to revive sluggish growth, which was also weighed down by high US tariffs, record private debt and delays in government spending. Ekniti, a key figure in the ruling Bhumjaithai Party, relied on popular stimulus programmes aimed at easing living costs, but the power of global financial markets loomed over domestic pledges.
Daily limits and investment push as possible relief
As a concrete response, the central bank was considering a daily trading limit for online gold transactions in baht, with a cap of 50 to 100 million baht per person under discussion. In parallel, the government sought to boost foreign direct investment to diversify capital inflows and reduce dependence on volatile speculative money. Officials acknowledged that it remained unclear whether these steps would be sufficient, but agreed that the battle over the baht would shape the economic future of millions of Thais.