Central bank intervenes in baht’s exchange rate

The Bank of Thailand has acknowledged its intervention in the value of the baht, citing it as a tool for managing the currency’s strength against the US dollar.
The central bank’s assistant governor for corporate relations group, Chayawadee Chai-anant, on Monday said the central bank has intervened in the baht’s exchange rate, ensuring that its fluctuations align appropriately with those of regional currencies.
The increase in the Bank of Thailand’s international reserves is attributed to both the intervention in the baht and the depreciation of the dollar, she said.
According to the central bank’s data, gross international reserves stood at US$235.6 billion as of August, up from $230.6 billion in July and $224 billion in June.
Meanwhile, net international reserves reached $262 billion in August, an increase from $258 billion in July and $252.6 billion in June.
Ms Chayawadee noted that while the baht’s appreciation against the dollar positions it as a leading currency in the region, it still trails behind the Malaysian ringgit.
She also admitted that the baht’s strengthening has occurred faster than anticipated. The central bank is closely monitoring the baht’s movement to prevent any negative effects on the overall economy, she said.
According to Ms Chayawadee, the appreciation of the baht against the dollar has varied implications for local businesses. For instance, a stronger baht may reduce the income of exporters due to foreign exchange conversion, especially for those utilising national foreign exchange hedging.
However, she said the stronger baht is unlikely to negatively impact the tourism sector in the final quarter of this year. Traditionally, in this high season overseas travellers anticipate a firmer baht against the greenback, allowing them to better manage their spending while visiting Thailand.
“The stronger baht against the dollar is not expected to affect foreign tourist arrivals in the final quarter of this year. Notably, key visitors to Thailand, including those from China, Malaysia and Japan, have also experienced currency appreciation relative to the dollar,” she said.
The central bank reported on Monday that the number of foreign tourists in August after seasonal adjustment reached 3 million, a slight decline of 0.1% from the previous month. Despite this, tourist spending in August remained steady compared to the previous month. However, the number of foreign travellers in September is showing signs of improvement compared to August.
In August, the Bank of Thailand reported overall economic activity in Thailand remained consistent with the previous month. Nonetheless, the number of foreign tourists declined, particularly from China and Malaysia, after a surge in arrivals in earlier months.
Conversely, there was an increase in tourists from certain countries, such as Japan and India. According to the central bank, tourism revenue, after seasonal adjustment, held steady from the previous month, primarily due to higher spending per trip.
According to Kasikorn Research Center, the baht strengthened to 32.17 bath per dollar during Monday’s trading, hitting the highest level in 31 months.