The Thai baht’s recent decline is set to bolster the Southeast Asian nation’s exports and tourism — two key drivers of the economy, according to Vice Finance Minister Santitarn Sathirathai. The baht has weakened about 8% since climbing to a five-year high in January amid broader dollar strength. The decline also came in the wake of Thai authorities clamping down on speculative trading in gold and the relaxation of capital outflow rules.

"The baht has weakened, but it hasn’t weakened as much as other currencies," Santitarn said in an interview on Monday. "I do welcome some of the weakening that we have seen so far. It would help exporters as well as tourism." A weaker baht adds to Thailand’s appeal as a tourism hotspot, while helping its exporters remain competitive in the global market. The Thai currency ranks behind the Philippine peso, the Indian rupee and the Indonesian rupiah in a list of Asia’s worst performers this year.

Thai policymakers don’t target a specific exchange-rate level, and haven’t been forced to respond to the baht’s moves through interest-rate adjustments, said Santitarn, who served on the Bank of Thailand’s rate-setting committee from 2023 until early 2026. He added that the approach has helped the central bank preserve room to act if needed. Santitarn said the recent steepening of the Thai bond yield curve is driven more by the short end than by rising longer-term yields. Short-term bond yields remain anchored by the Bank of Thailand’s policy rate, which was held at 1% for a third consecutive meeting in August, as well as expectations that the central bank is unlikely to raise borrowing costs even if the Federal Reserve hikes rates, he said. The spread between two-year and 10-year bond yields has spiked to 106 basis points Monday, up from 93 basis points a month ago, according to data compiled by Bloomberg. The yield on benchmark 10-year bonds has risen 67 basis points this year, compared with a gain of about 80 basis points in the US 10-year yield, which hit its highest level since 2023 on Monday. Thailand’s long-term government bond yields have risen in line with the global market but much less than those in many other countries, Santitarn said. The relative resilience reflects the nation’s macroeconomic stability and its attractiveness to investors, he said.