Weak tourist inflows cloud Thai baht’s end-of-year rally

Weak tourist inflows cloud Thai baht’s end-of-year rally

Analysts expect the Thai baht’s usual year-end strengthening to be muted this season as a drop in tourism—particularly from China—undermines the usual inflow of foreign exchange. Forecasts suggest the baht may appreciate only around 1% against the US dollar by year-end, significantly less than typical historical gains. A stronger baht and falling exports (after a more than 4.5% rise this year) are making Thai goods and tourism more expensive, damaging competitiveness. The Tourism Authority of Thailand anticipates a 6% decline in foreign arrivals, the first non-pandemic decline in a decade. While growth recovery, a weaker dollar or higher gold prices could help the baht, authorities may intervene if the currency becomes too strong vis-à-vis trading partners.