Bangkok: Private sector officials are raising concerns about the Thai baht, which has strengthened by over 7% since the start of the year. They highlight the challenges faced by exporters due to both the tariffs imposed by the Trump administration and the strengthened baht, prompting plans for a meeting with the Governor of the Bank of Thailand.
According to Thai News Agency, Mr. Kriangkrai Thienukul, Chairman of the Federation of Thai Industries (FTI), expressed that the baht's current strength does not accurately represent the state of the Thai economy, which is marked by weakness and low purchasing power. Typically, such economic conditions would lead to a weaker baht. However, a weakening US dollar has led to regional currency appreciation, with the baht now the strongest in the region. Since the beginning of the year, the baht has appreciated by 7%, ranking second in Asia, just behind Taiwan. This appreciation has compounded issues for exporters who are already dealing with a 19% US tariff. Unlike other countries that manage currency values to offset tariffs, Thailand has not devalued the baht, leaving exporters at a disadvantage.
The strengthening baht poses additional challenges to the tourism sector, crucial for Thailand's economic recovery in the latter half of the year. Tourists may opt for other destinations, like Japan, if the baht remains strong. The FTI is set to meet with the Bank of Thailand's Governor to explore strategies to address the baht's rapid appreciation and lessen its impact on both the export and tourism sectors.