Thailand Intervenes to Cool Baht Amid Four-Year High

Thailand's central bank has taken action to moderate the baht's rapid appreciation, which hit 34.20 per U.S. dollar—the strongest level in four years—raising concerns over export competitiveness and economic imbalance.

Thailand's central bank has initiated measures to curb the baht's sharp rise, following the currency's surge to 34.20 against the U.S. dollar—a level not seen since late 2021. The intervention, confirmed by official statements, marks a shift in monetary policy as officials seek to prevent excessive currency strength from undermining export-driven industries. The baht's appreciation has been driven by robust foreign capital inflows, strong trade surpluses, and rising foreign exchange reserves, which climbed to $237 billion by end-December 2025. However, a strengthening baht reduces the competitiveness of Thai exports, particularly in electronics, automotive components, and textiles—sectors that contribute over 60% to the nation’s total exports. Market analysts note that the baht’s 8.3% gain against the dollar in 2025 alone has outpaced regional peers, including the Vietnamese dong and Indonesian rupiah, which have remained more stable. This divergence has intensified pressure on policymakers to act, especially as import costs fall but export margins tighten. The central bank’s intervention includes the sale of foreign exchange reserves to increase supply of U.S. dollars in the domestic market, aiming to stabilize the exchange rate. The move is expected to affect short-term market liquidity and may influence the yield on Thai government bonds, with the 10-year benchmark yield rising to 3.15% in response.