Outlook
The Thai baht remains in a data-driven, modestly constructive posture amid a backdrop of softer US dollar and solid current-account dynamics. Domestic policy actions—the BoT’s FX reserve requirement hike—along with a recent MPC rate cut, create mixed impulses: liquidity tightening can support the currency on flow-related moves, while looser monetary policy can weigh on carry support. The Fiscal Policy Office still sees a baht around 31.8 per USD on average in 2026, supported by a weaker dollar, continued capital inflows, and a large current-account surplus, pointing to a gradual firming bias if external conditions stay favorable.
Key drivers
- Domestic policy tightening (FX liquidity): BoT raised the reserve ratio for foreign exchange deposits from 15% to 18% to curb speculative inflows. This reduces FX liquidity and can steady near-term moves, though it may limit sharp upside rallies.
- Monetary easing: The MPC cut the policy rate by 0.25% to 1.25% in December 2025 to stimulate growth. Lower carry can weigh on THB over a longer horizon, all else equal.
- External factors: The baht strengthened to about 30.93–30.95 per USD on January 21, 2026, helped by rising gold prices and a softer US dollar. This underscores the sensitivity to dollar direction and gold-market dynamics.
- Forecast and valuation: The Fiscal Policy Office’s 2026 average of around 31.8 per USD highlights a constructive medium-term path supported by current-account strength and capital inflows, though outcomes hinge on external risk sentiment and dollar moves.
Range
THB/USD: 0.030692–0.032456, current near 0.031690, about 0.5% above its 3-month average of 0.031533.
THB/EUR: 0.026511–0.027522, current 0.026734, about 1.0% below its 3-month average of 0.02701.
THB/GBP: 0.023143–0.023982, current 0.023143, about 1.9% below its 3-month average of 0.023605.
THB/JPY: 4.7152–5.1007, current 4.9038, just below its 3-month average.
What could change it
- A shift in US dollar strength or a retreat in gold prices could push THB toward the upper end of ranges.
- Further BoT policy steps or changes to FX liquidity rules could alter near-term dynamics—tightening tends to support THB, easing can weigh on it.
- A stronger or weaker current-account outcome, capital flows, or a revision to the 2026 FPO forecast could tilt the path toward firmer or weaker THB.
- Global risk sentiment and trade flows remain key: renewed risk-off sentiment or higher US rates could test support, while constructive global growth and stable risk appetite could help maintain firming momentum.
