Bangkok, September 15th, 2025– In a warning to policymakers and business leaders, newly appointed Thai Prime Minister Anutin Charnvirakul declared on Monday that the escalating strength of the Thai baht currency demands immediate attention, announcing that key discussions on the matter would take place later in the day.
The statement comes at a precarious moment for Southeast Asia’s second-largest economy, as the baht’s rapid appreciation threatens to undermine Thailand’s export-driven growth and tourism sector.
Anutin, who assumed the role of prime minister just 10 days ago following a parliamentary vote on September 5th, explained the urgency during a press briefing in Bangkok. “The strength of the baht needs to be urgently addressed,” he said, adding that the issue would be a focal point in meetings with incoming Finance Minister Ekniti Nitithanprapas and representatives from the Thai Bankers’ Association. Ekniti, a senior finance ministry official, is expected to lead the dialogue on potential interventions to stabilize the currency.
Anutin’s elevation to the premiership marked a turbulent shift in Thai politics. The 59-year-old leader of the conservative Bhumjaithai Party was elected after the Constitutional Court’s removal of former Prime Minister Paetongtarn Shinawatra on ethics grounds, ending the tenure of the Shinawatra family dynasty. Backed by an unlikely coalition including the progressive People’s Party, Anutin’s minority government has pledged to dissolve parliament within four months to pave the way for fresh elections, amid ongoing instability that has seen three prime ministers in just two years.
The baht’s surge has been nothing short of dramatic, reaching a four-year high against the US dollar in recent weeks. As of Monday, the exchange rate stood at approximately 31.75 baht per dollar, reflecting a 7-8% appreciation year-to-date. This marks the currency’s strongest level since June 2021, driven primarily by a weakening US dollar amid disappointing American employment data, speculation of aggressive Federal Reserve interest rate cuts, and global capital inflows into Thai assets.
Analysts from Kasikorn Research Center (K-Research) project the baht could test even tighter levels, potentially dipping to 30.50-31.00 baht per dollar if current trends persist, fueled by the US economy’s vulnerabilities and Thailand’s record-high foreign reserves of $289.68 billion as of late August.
While a stronger baht has boosted the Thai stock market—sparking rallies in sectors like airlines, energy, and import-dependent industries such as telecoms due to reduced foreign-denominated costs—it poses severe risks to the broader economy. Thailand, heavily reliant on exports which account for over 60% of its GDP, faces diminished competitiveness on the global stage. Exporters in key industries like electronics, automobiles, and agriculture are already reporting squeezed profit margins, with the currency’s 5-6% year-to-date gain increasing pressures from a 19% US tariff on Thai goods imposed earlier this year.
Tourism, another economic pillar contributing around 12% to GDP and employing millions, is equally vulnerable. A strong baht makes Thailand less affordable for international visitors, particularly from major markets like the US, Europe, and China. Thienprasit Chaiyapatranun, President of the Thai Hotels Association, warned that while short-term impacts on the upcoming high season might be muted, prolonged strength could deter tourists and hinder recovery from pandemic-era losses. K-Research economists have cautioned that the baht’s volatility—up to 8.7% this year compared to 8% in 2024—further complicates business planning, increasing the need for hedging strategies.
The Bank of Thailand (BOT) has already intervened by selling baht and buying dollars to temper the appreciation, contributing to the nation’s swelling reserves. However, experts like Burin Adulwattana, Managing Director at K-Research, note that new leadership at the BOT and Ministry of Finance may introduce policies to ease the currency slightly later in 2025. Broader forecasts remain mixed: While short-term strength is expected to continue, influenced by US political uncertainties under President Trump’s administration and China’s economic slowdown, some projections anticipate a depreciation to around 35.50 baht per dollar by year-end due to escalating trade tensions.
Thailand’s economy, projected to grow by 1.8-2.3% this year according to the National Economic and Social Development Council, is already lagging regional peers at 2.5% expansion in 2024. The baht’s trajectory could drag this figure even lower, particularly if US tariffs intensify and global demand weakens. Anutin’s government, supported by anticipated interest rate cuts from the BOT under its new governor, faces an uphill battle to balance currency stability with growth imperatives.
Photos: Popular shopping areas in Pattaya by Adam Judd for The Pattaya News.
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