PATTAYA, Thailand – The Thai baht has surged to its strongest level in more than four years, unsettling exporters, tourism operators, and farmers alike. Analysts warn that the speed and scale of the currency’s appreciation could cause deeper and longer-lasting damage than policymakers had anticipated.
On September 9, the baht briefly touched 31.58 per U.S. dollar before easing to 31.74 later in the day, according to Kasikorn Research Center. Since the start of the year, the currency has gained 7.5 percent, making it one of the strongest performers in Asia. The rally has been fueled by a combination of a weaker U.S. dollar—down nearly 10 percent this year under political pressure on the Federal Reserve during Donald Trump’s presidency—rising global gold prices, and heavy foreign capital inflows into Thai bonds. Thailand’s significant gold reserves, together with speculative flows into local markets including cryptocurrency, have further boosted demand for baht.
The appreciation is rattling the country’s export-reliant economy. Thanakorn Kasetsuwan, president of the Thai National Shippers’ Council, described exporters as “shocked” by how quickly the baht moved from 34 to 32 per dollar within just a few months. He explained that every one-baht gain wipes out roughly 10 million baht in export value. For example, a $10 million shipment that would have been worth 340 million baht at an exchange rate of 34 now yields only 320 million at 32—a loss of 20 million baht, or 5.8 percent, on the same order. While large corporations can hedge against this volatility, most small- and medium-sized exporters cannot, leaving them exposed to significant losses.
The tourism industry, which has welcomed more than 22 million foreign visitors so far this year and generated over 1 trillion baht in revenue, is equally concerned. Thienprasith Chaiyapatranan, president of the Thai Hotels Association (THA), warned that a strong baht makes Thailand appear expensive compared with regional rivals. Tourists may not cancel their trips outright, but they are spending less. With fixed travel budgets, a stronger baht translates into fewer restaurant meals, less shopping, and fewer excursions. Although the upcoming high season may temporarily mask these effects, the longer-term picture is troubling as competitors like Vietnam and Japan—where the yen has fallen dramatically—become more attractive.
Farmers, too, are feeling the strain. Revenues from rice and field crop exports have been cut even as domestic costs continue to rise. The result is a squeeze on rural producers who already operate on thin margins, deepening financial pressure in the agricultural sector.
Business leaders are calling for urgent intervention. The Thai Chamber of Commerce has described the current situation as a “currency shock that runs counter to the real economy,” urging the government and the Bank of Thailand to act before competitiveness erodes further. The Joint Standing Committee on Commerce, Industry and Banking has gone so far as to recommend separating Thailand’s gold balance sheet from its core economic indicators, arguing that gold-related inflows distort the real strength of the baht. At the same time, officials are cautious, knowing that overly aggressive intervention could risk accusations of “currency manipulation,” particularly from the United States, which has linked exchange-rate issues to trade negotiations.
Kasikorn Research believes the baht could soon test the 31.50 per dollar level if U.S. interest rate cuts go ahead, with the next support point seen at 31.30. Few expect it to return to the historic peak of 30 baht per dollar reached in 1978, as the central bank is expected to quietly intervene to prevent excessive gains.
Yet the warning signs are already visible. Kriangkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), has stressed that the sharpest rally in four years is damaging exporters, tourism operators, and small businesses across the board. While cheaper imports such as oil offer some relief, the net effect is decidedly negative. If the baht continues to appreciate independently of economic fundamentals, he said, Thailand risks losing its competitive edge.
For policymakers, the paradox is stark. A strong baht is often hailed as a sign of investor confidence, but its rapid and excessive rise is inflicting real pain on the ground. Exporters are losing contracts, tourists are spending less, and farmers are taking losses they cannot pass on. With a new finance minister and central bank governor preparing to take office, the business community is urging swift action. Unless the baht is managed more carefully, Thailand could be left with a currency that looks strong on paper while the real economy weakens beneath it.
