The Thai Baht (THB) has shown some strength recently, trading at THB 0.031713 per US dollar, which is 1.8% above its three-month average. The baht has remained relatively stable, with fluctuations between THB 0.030446 and 0.032204 over the past few months. Similar trends are observed against other currencies, with the THB to Euro at 0.027045, 1.1% above its three-month average, and a volatility range of 4.6%. The performance against the British pound (THB 0.023549) and Japanese Yen (THB 4.9722) has also been noteworthy, though the latter has shown greater volatility.
Looking ahead, analysts at Thailand's Fiscal Policy Office predict that the baht will strengthen further, expecting an average exchange rate of THB 31.8 per US dollar in 2026. This anticipated appreciation is attributed to a decline in the US dollar's strength, increased capital inflows, and a robust current account surplus. However, there are warning signs regarding the potential impact of a strong baht on exports. The Thai National Shippers’ Council has highlighted concerns that a stronger baht could hinder export growth, forecasting only a 2-4% increase in 2026 due to a high base effect and softer global demand.
In addition, the Bank of Thailand's economic projections indicate a modest GDP growth of 1.5% for 2026, influenced by challenges such as an export slowdown and the overall strong baht's adverse effects on tourism. A joint committee has further underscored concerns regarding economic expansion, projecting an even lower growth of 1.6% due to various factors, including China's industrial overcapacity and recent severe flooding in southern Thailand.
Overall, while the baht's near-term strength looks promising, it faces significant economic challenges that could affect its trajectory in the months ahead. As such, businesses and individuals dealing with international transactions should remain alert to these developments when planning their currency exchanges.
