Strong Baht Deals Blow to Thai Exports and Tourism Earnings

Bangkok Business News: Baht at Four-Year Peak Fanning Concerns Over Growth

On September 9, the Thai baht surged to its strongest level in over four years, touching THB 31.58 per US dollar before easing slightly to THB 31.74 in the afternoon. The rise, which now marks about 7.5 percent appreciation since the start of 2025, puts Thailand among the strongest currencies in Asia. The baht’s strength is being driven by rising global gold prices and net inflows of foreign capital into Thai government bonds, coupled with a weakening US dollar as markets increasingly bet on an upcoming interest rate cut by the Federal Reserve.

This Bangkok Business News report notes that KResearch forecasts the baht may test THB 31.50 if downward pressure on the US dollar continues. Should it break levels of support, THB 31.30 is seen as another marker, though repeated interventions by the Bank of Thailand are expected to prevent an over-correction toward mid-1980s levels near THB 30 per dollar.

Thai baht surge sparks concern for exporters and tourism sectors
Image Credit: AI-Generated

Exporters Sound Alarm Over Competitive Disadvantage

The strong baht is not just a statistic—it is already eroding revenue for exporters. According to Thanakorn Kasetsuwan of the Thai National Shippers’ Council, a one-baht appreciation can translate into losses of tens of millions of baht on large deals. For example, a US$10 million export charged at THB 34/USD drops from THB 340 million to THB 320 million if the currency strengthens to THB 32/USD, or a loss of about 5.8 percent. Medium and small exporters without hedging mechanisms are especially vulnerable.

The private sector, led by the Thai Chamber of Commerce and supported by JSCCIB, is calling on authorities to manage the currency more systematically. They argue the baht is overvalued relative to underlying economic fundamentals, and warn that unchecked strength could undermine Thailand’s competitive position in exports, agriculture, and tourism.

Tourism and Agriculture Also Feel the Impact

For tourism, the appreciation means higher costs for foreign visitors, reducing incentives to travel here. Even if arrival numbers hold, spending per visitor is likely to drop as tourists operate on set budgets. Agriculture exporters, especially those relying on export crops, find that income no longer keeps pace with rising input costs under the stronger baht.

Thienprasit Chaiyapatranun, President of the Thai Hotels Association, warns that while high-season tourism toward the end of 2025 may be only marginally affected, the longer-term picture is bleaker if rival destinations maintain weaker currencies.

Policy Pressing for Intervention and Balance

Economists and business leaders suggest that while some appreciation reflects external forces—like gold price jumps or USD weakness—policy tools must aim to safeguard export competitiveness. This may include intervention via foreign reserves, adjusting exchange rate metrics (such as excluding the influence of gold transactions), and confidence-building measures to stabilize the baht.

Authorities are also under scrutiny for “currency distortion” concerns, especially in light of trade relations with the US and EU, which may view rapid currency shifts as affecting fair trade. Hence any effort to moderate the baht’s rise will need to walk a fine line.

While the baht’s recent strength reflects global trends and investor sentiment, its rapid climb is posing tangible challenges for Thai exporters, farmers, and the tourism sector. Without calibrated and timely policy responses, growth could be stunted, export orders reduced, and visitor spending slashed—effects which would ripple through the economy.

 for the latest on the Thai economy, keep on logging to Bangkok Business News