The Thai baht is expected to weaken further as the escalating Middle East war and delayed US interest rate cuts put pressure on the currency. On March 20, PPTVHD36 reported that the baht had already fallen to just above 32.80 per US dollar, its weakest level in five months. Analysts forecast the currency will remain in a range of 32.60 to 33.10 against the dollar over the next month.

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The downward trend is being driven by intensifying conflict in the Middle East, particularly ongoing attacks by Israel on Iran, including strikes on energy infrastructure. This escalation has reduced the likelihood of any near-term agreement between the two countries. A projected six-week continuation of the war is expected to keep Brent crude oil prices elevated at around US$108–115 per barrel, increasing pressure on US Treasury yields and strengthening the US dollar.

Additional pressure comes from growing concerns over stagflation in the United States, where the labour market is showing signs of weakening while inflation continues to rise, particularly in the service sector. These conditions may prompt the US Federal Reserve to maintain a hawkish stance, delaying or reducing expected interest rate cuts. Previously, two rate cuts had been anticipated this year, but analysts now suggest there may be only one, possibly in early Q4, or none at all if inflation exceeds 3.5 percent.

Mr Wachirawat Banchuen, senior financial market strategist at Siam Commercial Bank, noted that global capital flows are also shifting. Investors are moving away from emerging markets and towards the US dollar as a safe haven, contributing to the depreciation of regional currencies such as the yuan and the baht. He added that capital inflows seen in January and February have reversed, with approximately 80 billion baht exiting Thai stock and bond markets this month.

For exporters, the current weakness presents an opportunity to sell USD/THB holdings within the 32.85–33.35 range. They are also advised to consider hedging strategies, such as purchasing options, to guard against a potential rapid appreciation of the baht if the conflict subsides. Importers, meanwhile, may find value in gradually purchasing US dollars if the baht strengthens to around 32.50 or below.

The ThaiNewsRoom reported that the direction of the Thai baht will largely depend on developments in the Middle East conflict, global oil prices and US monetary policy decisions. Continued volatility is expected, with external factors likely to remain the dominant influence on the currency in the near term.

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Adapted by ASEAN Now Thainewsroom 22 Mar 2026

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Well good I suppose for tourism.

Although it makes importing already high priced oil etc more expensive.

It is good that the too expensive THB is weakening, but it is too late already. Many deals are probably missed because the THB was so expensive, and now with the expensive oil prices and problems in and around Iran, tourists will not come and looking for nearby and safer destinations. The weaker THB will show its effect maybe the second half of this year or next year..The expats however will get more a bit money to spend however now