Thai Baht Expected to Strengthen in 2023

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Thai baht reaches five-month high

The Thai baht is expected to have a strong year in 2023, buoyed by an influx of Chinese tourists and slowed US rate hikes.

Bangkok Post reports that Thailand’s currency may get a boost from a potential rise in the Consumer Price Index (CPI), as well as the US Federal Reserve Bank’s tightening cycle nearing its end.

Meanwhile, global anticipation of the return of outbound tourism from China following Beijing’s rescinding of Covid-19 controls has made economists optimistic.  China is also Thailand’s biggest export market, with efforts to bolster growth likely to impact the country.

The Bank of Thailand has already stated that it intends to continue raising interest rates until the first half of 2023, and any upside surprise in the data could cause markets to price in a lengthier tightening cycle.

Foreign-exchange analysts told Thai media that the baht could benefit alongside its Asian peers if the US Federal Reserve slows the pace of its own interest rate increases, driving down the dollar.

The Thai baht heavily influences the economy of Laos, which relies on Thailand for a significant volume of its imports.