Thai Government Says It Will Work With Central Bank to Address Baht’s Strength

The Thai government will coordinate with the central bank to manage the baht, which has risen to its strongest level in four years, while monitoring capital flows and possible irregularities in gold trading, the country’s new finance minister said on Thursday.

Ekniti Nitithanprapas told reporters he had discussed measures to stabilize the currency with Vitai Ratanakorn, who will take over as governor of the Bank of Thailand on October 1.

He added that any unusual capital flows or irregularities in gold trading would be investigated. However, his deputy, Woraphak Tanyavong, acknowledged that foreign purchases of bonds and equities could drive the baht higher.

Following these comments, the baht eased to 31.88 per dollar from Wednesday’s close of 31.73, but it remains up about 8% this year—making it the second-best performing Asian currency after the Taiwan dollar.

Compared with its regional peers, the baht’s strength is seen as a threat to Thailand’s exports and tourism, the two key drivers of Southeast Asia’s second-largest economy.

Earlier this week, the central bank said it was considering imposing a tax on gold trading, among other measures, to curb the baht’s rise.

Between January and July, Thailand’s gold exports surged 82% year-on-year to $7.6 billion, with an unusually large $2.1 billion in shipments going to Cambodia alone.