Bank of Thailand Reports Baht at a 16 Year Low

The Bank of Thailand announced today that it was closely monitoring the baht and was prepared to manage any excessive fluctuations in the currency, which reached its lowest level in nearly 16 years.

The baht, one of the region’s worst-performing currencies, reached its weakest level since December 2006 on Friday, when it reached 37 baht per dollar. It has lost approximately 10% against the dollar so far this year.

The central bank told reporters via text message that the baht is more volatile due to external factors, including expectations of more aggressive U.S. interest rate hikes and deteriorating risk sentiment in emerging Asian markets after China’s yuan fell below 7 per U.S. dollar.

Assistant governor Alisara Mahasandana stated in a statement that there was a unique factor for Thailand related to falling gold prices, which resulted in increased U.S. dollar purchases by gold companies.

She stated, “The BOT is closely monitoring the movement of the baht and is prepared to intervene if the baht moves in an unusually volatile manner so as not to impede the adjustment of the real economy.”

She observed that the baht tended to become more volatile as it depreciated beyond 37 baht per U.S. dollar.

Bank of Thailand projects a stronger economy

Thailand’s economy is projected to expand by 3% to 3.5% this year and 3% to 4% next year, aided by increased exports and a rebound in the vital tourism sector following the country’s reopening to tourists, according to the country’s finance minister.

Arkhom Termpittayapaisith stated on a Radio Thailand program that the Southeast Asian nation anticipates eight and ten million foreign tourists this year, having already welcomed five million.

Compared to the previous year, when the economy grew 1.5%, among the slowest in the region, this is a significant increase. Before COVID-19, there were nearly 40 million international tourists in 2019.

Thailand’s recovery has lagged behind others in the region due to a slow recovery in the tourism sector, which accounts for approximately 12 percent of the country’s GDP.

Source: Reuters

Keywords: bank of Thailand museum, bank of Thailand act, central bank of Thailand

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