The Indian Rupee (INR) has experienced significant pressure in recent weeks, reaching a record low against the U.S. dollar and affecting its performance against the Thai Baht (THB). As of now, the INR to THB rate is at around 0.3581, which marks a 3.9% decline from its three-month average of 0.3727. Analysts indicate that the INR has traded within a relatively narrow range over the past months, reflecting stability despite broader pressures.
The recent weakness of the INR can largely be attributed to U.S. tariffs imposed on Indian goods, particularly a 50% tariff on key exports, which has raised concerns about the health of Indian trade relations. Additionally, significant foreign portfolio outflows and the intervention of the Reserve Bank of India to stabilize the currency also play a role in the current exchange landscape. As a result, forecasters project the INR to stabilize, predicting rates around 88.04 by the end of September, indicating that further major declines may be averted in the near term.
On the other hand, the Thai Baht is buoyed by the economic strategies of the new Prime Minister Anutin Charnvirakul, who is focusing on stimulus measures aimed at boosting economic growth and stability. Furthermore, declining inflation rates could prompt the Bank of Thailand to consider further interest rate cuts to support economic activity. The recent Consumer Price Index (CPI) data showing a 0.79% year-on-year decline in August suggests a cooling inflation environment, which may enhance the attractiveness of the THB in the eyes of foreign investors.
Additionally, the ongoing global volatility in oil prices, currently trading at 66.99 per USD, 2.9% below the three-month average, poses potential challenges for both currencies. Fluctuations in oil prices could influence economic conditions in both India and Thailand, given the reliance of these economies on energy imports.
In summary, while the INR faces headwinds from tariff impacts and outflows, forecasts suggest a stabilization around current levels. Conversely, the THB has prospects for strengthening due to new government policies and favorable inflation trends. Investors and businesses should remain vigilant, as developments in these areas may influence future currency strategies.
