Baht likely to weaken further in the next 1-3 months amid pressure from interest rate differential and Thailand’s slow economic recovery
- The Baht has depreciated and fluctuated since early 2024, ranking among the three weakest and most volatile Asian currencies, despite occasional strengthening driven by record-high global gold prices amid geopolitical risks.
- The Baht is expected to remain under pressure over the next 1-3 months, as the widely anticipated US interest rate cuts may not happen anytime soon, while the Thai economy is recovering at only a gradual pace.
- Given the potential for further weakening of the Baht, importers of raw materials for domestic production and sales should prioritize hedging against exchange rate risks in order to minimize any negative impacts that may arise.
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