The Thai baht remains a key focus for investors and businesses as it continues to appreciate, gaining more than 5% since the start of the year.
This sustained strengthening has driven Thailand’s foreign reserves to an all-time high, raising speculation in the market that the Bank of Thailand (BOT) has intervened to prevent the currency from rising too sharply.
Sanguan Jungsakul, senior director for money and capital markets business at Krungthai Bank, said the baht’s rise has been largely driven by external factors, particularly the US dollar’s persistent weakness since the beginning of the year.
He noted that the baht’s 5% appreciation mirrors regional trends, with currencies in South Korea and Taiwan strengthening by 6–8%. This has prompted the BOT to step in, buying dollars and selling baht to curb excessive or rapid appreciation.
Rising gold prices have added further support to the baht, reinforcing expectations that the BOT will continue to monitor and manage the currency closely. As a result, Thailand’s foreign reserves have increased significantly, reaching a record level of over US$280 billion.
“The situation today is similar to 2021, but with one key difference: the US Federal Reserve has not cut interest rates to 0% as it did back then,” Sanguan said. “Still, the dollar’s weakness persists, and many countries, including Malaysia and Indonesia, are also seeing their reserves climb to record highs, just like Thailand.”
Baht tipped to strengthen to 31.50 per dollar
The Thai baht is expected to continue its appreciation in the coming months, with analysts projecting it could reach 31.50 per US dollar or even break below 32 by the end of the year. In the short term, the currency is forecast to trade within a range of 32.20–32.30 per dollar.
Sanguan noted that the BOT is likely intervening to curb volatility. “The continuous rise in foreign reserves reflects efforts to reduce fluctuations in the baht, ensuring the real economy can adjust and manage risk more effectively.”
Kasikorn Research cites three drivers behind surging reserves
Thailand’s foreign reserves reached a historic peak of US$289.68 billion as of August 22, according to Kanjana Chokpaisansilp, head of research at Kasikorn Research Centre. She identified three key factors behind the record level:
Currency management by the BOT
Intervention to smooth volatility during the baht’s strengthening phase has contributed to the steady build-up of reserves.
Mark-to-market valuation of assets
Rising global asset prices, particularly gold, have boosted the market value of reserve holdings. Thailand’s gold share of total reserves has climbed to 9.5%, compared with 3.4% a decade ago and just 2.6% in 2005.
Positive balance of payments
Stronger exports, stable imports, and net capital inflows have kept the country’s balance of payments in surplus, providing further support to reserve accumulation.