Thai Baht General Info
The Thai baht is subdivided into 100 satang.
The baht is termed an ‘exotic’ currency, which means that there is far less participation in the market for baht than in the market for more established currencies, such as euros or U.S. dollars. For this reason, the price paid to change your money into or from baht (the price being equivalent to the market bid-ask spread) is far higher relative to the amount of money being changed than it would otherwise be.
Thailand’s central bank manage the baht’s value under a ‘managed float’ regime, which means that the bank will intervene at times in the foreign exchange market to reduce what it sees as excessive volatility in the currency and to maintain national competitiveness, i.e. the bank will at times weaken the currency to boost demand for Thailand’s exports.
As an exotic currency, the baht is considered riskier than currencies from major developed nations, which means that its value will fall against the FX majors (especially JPY, USD, CHF, GBP and EUR) during periods of economic uncertainty or when global geopolitical risk is elevated, or during bouts of high market volatility.
Historically, the baht’s lowest valuation against the US dollar came in January 1998 when USD/THB reached 55.50. Its all-time high occurred in July 1981 when USD/THB fell to just 20.36. Since 2005, USD/THB has traded between 28.56 and 42.19.Read our Travel Guide to Thailand
THB - Currency Market News
In August, the Thai baht leapfrogged the Korean won to become Asia’s best performing currency of the year.
In the final week of August, the baht held a year-to-date gain over the dollar of nearly 8%, buying $0.03 (USD/THB 33.22), putting it back at mid-2015 levels.
Against the British pound, at £0.023 (GBP/THB 42.75) the baht remained within striking distance of multi-decade highs.
The baht has advanced this year on the back of strong growth in Thailand’s economy. On August 21st, the latest GDP data showed Thailand’s economy growing at an annualized rate of 3.7% – its fastest rate of growth in more than four years.
In an acknowledgement of the baht’s rapid rise this year, the deputy governor of the Bank of Thailand said in July that Thai companies should consider hedging against future baht appreciation.
In August, Standard Chartered forecast a further 7% rise in the baht with its prediction that USD/THB would fall to ฿31 in 2018, from August exchange rates around ฿33.22.
Also in August, analysts at Scotiabank predicted continued support for the baht, citing Thailand’s large current account surplus as their reason, and advised buying the baht on dips.