Thailand’s baht weakens against US dollar

Thailand’s baht has weakened against the US dollar this year. On Wednesday, the conversion rate was 36.73 baht per dollar, having been weakened by 8.8% this year. The baht hit its lowest point in 15 years in July, when the rate was 36.945 baht per dollar.

The US dollar has gotten stronger due to a drop in many countries’ foreign reserves, including Thailand’s. Thailand’s foreign reserves fell from US$278 to US$240 billion earlier this year, according to the Bank of Thailand (BoT). However, the kingdom’s foreign reserves remain high when compared to many countries, it said.

Last week, it was reported that emerging Asian central banks had seen a big drop in their foreign exchange reserves. The BoT said the fall in Thailand’s reserves has been due to the valuation of assets in multi-currencies that were converted into dollars. Foreign investors have still bought about 160 billion baht net of Thai assets so far this year.

The BoT said it hadn’t seen any unusual capital movements, and the baht’s weakness is mainly driven by the dollar’s strength. It noted that Thailand’s financial stability is still going strong.

The baht has been falling over the past year after fears Covid-19’s Omicron variant had spread throughout the world earlier in the year. This was after the baht had been slowly gaining ground on the US dollar.

SOURCE: Reuters | Bloomberg