The Indian Rupee (INR) has recently reached a historic low against the U.S. dollar, trading at 90.42. This decline heightens the INR's depreciation trend, which has noted a 5% drop over the past year. Analysts attribute this weakness to several factors, including a significant widening of the trade deficit, aggravated by a U.S. tariff rate of 50% on Indian exports, which is escalating the demand for foreign currencies. Concurrently, foreign investment outflows have also been a critical issue, with about $17 billion withdrawn from Indian equities in 2025. The Reserve Bank of India (RBI) appears to be easing its defense of the rupee, choosing instead to allow it to weaken as it seeks to stabilize the currency amid these pressures.
In contrast, the Thai Baht (THB) is exhibiting strength, leading the Bank of Thailand to implement measures to mitigate this appreciation. The central bank is addressing the rising baht through strategies aimed at controlling foreign exchange linked to gold and increasing tax thresholds for expatriate income. Thailand is grappling with negative inflation, which has persisted for eight consecutive months, reflecting the impact of dropping energy prices. Additionally, economists expect a possible interest rate cut to 1.25% to stimulate the economy, as growth projections remain cautious amid a robust baht that could harm export competitiveness.
Recent exchange data shows the INR to THB rate at 0.3514, which marks a 3.1% gap below its three-month average of 0.3625. Although the INR has traded within a stable range of 8% over recent months, the pressure of a weakening rupee against a strong baht may push future forecasts towards further depreciation unless significant policy changes are implemented.
The fluctuation in global oil prices also plays a role in the currency dynamics, with WTI crude currently at $60.53 per barrel—5.2% below its three-month average of $63.82—indicating volatility that could have a ripple effect on both currencies. As oil prices continue to be influenced by broader market dynamics, its impact may reverberate through to exchange rates, particularly affecting the trade balances of both Thailand and India.
Given these factors, economists and market analysts will closely monitor developments regarding trade negotiations, central bank policies, and global economic conditions to better anticipate movements in the INR to THB exchange rate in the coming months.
