The overly strong baht is causing concern: the Bank of Thailand is ready to act.

The Governor of the Bank of Thailand stated on Saturday, November 22, 2025, that a weaker baht would be beneficial for the economy.

He added that it was possible to reduce interest rates if necessary to support growth.

See: Thailand faces a dilemma: gold pushes up the baht, tourism suffers

On Sunday, November 23, 1 euro is worth 37.41 Thai baht and 1 USD is 32.39 baht.

See: Thai Baht (THB) Rate: Today's Exchange Rate Against the Euro

A strong baht that weighs on the Thai economy

Thai banknotes.

The baht has appreciated by about 6% against the US dollar since the beginning of the year, becoming the second-best performing currency in Asia.

The strength of the baht threatens exports and tourism.

See: Thailand: alert, the strength of the baht threatens tourism and exports

At an event in Chiang Mai, the Governor of the Bank of Thailand, Vitai Ratanakorn, told journalists:

The central bank wants to see the baht weaken to an appropriate level that reflects the real state of our economy.

I think the baht can weaken further.

He added that the strength of the currency had been fueled by the weakness of the dollar and Thailand's current account surplus.

In September, the baht reached its highest level in four years, partly due to its strong correlation with gold.

See: Thailand: Baht's rise linked to gold exports to Cambodia

The baht situation is expected to improve next year, as the country's current account surplus is expected to decline, said Mr. Vitai.

Towards a possible new interest rate cut?

Bank of Thailand ready to lower its rates.

Asked about monetary policy, the governor explained that it was possible to lower interest rates if necessary.

We are examining the data.

It is possible to make a further cut.

Negative inflation and weak growth: a fragile economic context

Bangkok's Chinatown. Photo: Viarami

Thailand's overall inflation rate has been negative for seven months.

Policymakers have attributed the continued decline in prices to supply-related factors rather than weak demand.

The central bank's monetary policy committee left its benchmark interest rate unchanged at 1.50% on October 8, after having lowered it four times during the past year.

Clearly, Thailand is experiencing negative inflation, sluggish growth, and external pressures, which complicates the central bank's actions.

The next interest rate meeting will take place on December 17, and some economists expect a further decline.

The Thai economy has faced multiple challenges, including US tariffs, high household debt, and a strong baht.

The economy grew by only 1.2% year-on-year in the third quarter, the weakest pace in four years.

Compared to the second quarter of this year, GDP contracted by 0.6%.

The central bank forecasts growth of 2.2% this year and 1.6% next year.

Last year's growth was 2.5%.

The government is investigating suspicious financial flows

A gold seller counts a bundle of 1,000 baht notes. Photo: CTN

The government of Prime Minister Anutin Charnvirakul has set up a 'Connect the Dots' task force to investigate irregular financial flows that could be fueling the unusual strength of the baht despite the poor health of the Thai economy.

The government has announced that it will set up a special task force to monitor suspicious fund movements related to online gambling, fraudulent accounts and other 'grey money' transactions.

Bank of Thailand ready to act to avoid distortions

Bank of Thailand. Photo: Money and Banking Online

The Bank of Thailand is ready to use its policy tools if speculators are attracted to the baht and cause distortions in the currency, said Mr. Vitai.

But he warned that the central bank could only reduce currency volatility, not reverse exchange rate trends.

See also:

Thai Airways suffers from competition and strong baht: -64.6% in Q3

Alert: Thailand could lose its status as a top tourist destination

Thailand-Cambodia Crisis: Warning of a Major Economic Impact

Thailand's economy 'on the brink'

Source: Bangkok Post