Thailand’s baht may be nearing a turning point after a bruising eight months, with analysts seeing scope for a rebound as foreign money returns to the nation’s bonds and an improving current account supports the currency. Credit Agricole CIB sees the baht gaining about 3% to 32.8 per dollar in the first quarter of 2027, while Krung Thai Bank Pcl. expects it to reach that level by year-end, a turnaround from a slide of more than 8% since the end of February. Returning foreign inflows and a more predictable monetary-policy outlook are underpinning the forecasts.
The currency closed at 33.76 per dollar on Friday. Global funds have poured $604 million into Thai bonds so far in October, putting the market on course for its first monthly inflow in four months and helping steady the baht after it became emerging Asia’s second-worst performer since the Iran war began. The next leg of the baht’s recovery may depend on the inflows being sustained and a further boost to the current account from the peak tourism season.
Economists expect the central bank to keep interest rates unchanged Wednesday, providing a stable policy backdrop for the baht. “Reduced FX volatility alongside relatively anchored policy expectations have been helping to stabilize foreign investment interest and support the baht,” said Jeffrey Zhang, an emerging markets strategist at Credit Agricole and the top ranking forecaster for the dollar-baht in the third quarter. “We are beginning to see some resilience in the dollar-baht at current levels.” The current account posted a $2.4 billion surplus in August, the largest since February, with peak tourism offering scope for further improvement. The currency also has seasonality on its side. The baht has gained an average 1.8% against the dollar in the fourth quarter over the past decade, its strongest three-month period, according to data compiled by Bloomberg. “The baht will be supported by the seasonality effect of the high season of tourism especially in the final quarter of this year,” said Poon Panichpibool, a strategist at Krung Thai Bank.
He also expects “a gradual improvement in the current account balance from declining energy prices in the coming months from easing concerns over the Middle East,” his base-case scenario.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing