Relevant government agencies, including the Bank of Thailand, are being advised to take quick action to ensure the baht remains at an appropriate level.

Ongart Kittikhunchai, president of the Thai Food Processors’ Association, said the central bank must manage the exchange rate more actively rather than allowing it to be driven by external factors such as gold prices, cryptocurrencies and international developments.

He said the baht’s appreciation has implications for all exporters, particularly those in the agricultural, agro-industrial and food sectors, with broader consequences for the national economy as exports account for 60-70% of GDP.

"If the baht continues to strengthen, it could affect business costs," said Mr Ongart.

"Exporters typically operate on single-digit margins, but the baht appreciated by 7-10% in 2025 and continues to strengthen."

He described the baht at stronger than 31 per US dollar as a dangerous scenario.

To cope with the situation, Mr Ongart suggested businesses focus on reducing operating costs by using technology to improve efficiency. Businesses must also negotiate with clients to raise product prices, as producers and exporters cannot continue supplying goods without price adjustments.

Dhanakorn Kasetrsuwan, chairman of the Thai National Shippers’ Council (TNSC), said the baht’s appreciation reduces export revenue by 5-10% when converted back into baht, depending on timing and contract terms. If prices cannot be increased, profits are directly eroded.

He said Thai products have lost price competitiveness against key rivals such as Vietnam, Indonesia and China.

"Exporters do not want the weakest possible baht, but rather a baht that does not appreciate significantly more than regional competitors and remains in line with other major currencies in the region," said Mr Dhanakorn.

The TNSC views 33 baht per dollar as an appropriate level, but given large inflows of dollars into Asia, the council acknowledges achieving this level would be challenging.

He said businesses are concerned about the baht’s volatility and movements that diverge from those of regional peers, as such instability complicates business planning and undermines long-term competitiveness.

The central bank should monitor baht appreciation to prevent excessive divergence from regional currencies, said Mr Dhanakorn, calling for measures to curb short-term speculation and scrutiny of cross-border capital flows to ensure compliance with know your client and know your source of funds principles.

In addition, small and medium-sized enterprises should be given better access to foreign exchange risk-hedging tools with low fees and simplified procedures, noted TNSC.

GROWING CONCERNS

ML Peekthong Thongyai, vice-chairman of the Federation of Thai Industries (FTI), said without swift action to address the baht’s appreciation, Thai competitiveness in the global market will erode as product prices rise.

He warned foreign tourist arrivals may also decline as travellers will opt for neighbouring destinations that offer more affordable trips.

These developments would deal a blow to manufacturers already struggling to maintain competitiveness, while also weighing on sales of goods and services in the tourism sector, said ML Peekthong.

The FTI called on state agencies to better manage fluctuations in the baht arising from various factors, including currency transactions, capital flows and trading in gold and digital assets. Such measures should aim to curb currency speculation and excessive volatility, while preventing transactions that are inconsistent with real economic activities, he said.

GOLD FACTOR

Central bank governor Vitai Ratanakorn said the baht appreciated past 31 to the dollar on Wednesday, driven mainly by a surge in gold prices.

"The baht’s strength exceeds levels justified by economic fundamentals and is primarily influenced by a surge in gold prices," he said.

"We would like to see the baht weaken against the dollar in line with economic fundamentals."

Mr Vitai said baht movements are typically driven by economic fundamentals, followed by capital flows and global gold prices, with gold acting as an amplifier of the currency’s appreciation.

In recent days, the baht has moved largely in line with gold prices. Gold trading volume accounts for about 35% of total foreign exchange-related transactions, while foreign capital inflows have added upward pressure on the baht.

Regarding the three core factors influencing baht movements, he said they are largely beyond the Bank of Thailand’s control.

While market intervention is a tool available to manage exchange rates, it can only play a limited role.

Mr Vitai said the central bank is monitoring gold trading conducted via digital platforms using baht.

The regulator is preparing to issue two notifications requiring large domestic gold traders to report baht-denominated transactions made through mobile apps, and imposing daily trading limits per individual.

The initial maximum trading volume is expected to range between 50-100 million baht, and the two notifications are scheduled to be issued later this month, he said.