Thailand’s recent weakening of the baht is expected to prove temporary, with the currency forecast to regain strength against the US dollar in the second half of 2026, according to Siam Commercial Bank Financial Markets (SCB FM).

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SCB FM senior financial markets strategist Wachirawat Banchuen said the baht’s recent fall against the US dollar, briefly approaching 33.5, was driven by short-term capital outflows rather than any fundamental deterioration in Thailand’s economy. He said foreign selling in the Thai stock market was the main factor behind the depreciation, but the currency stabilised once those outflows eased.

Mr Wachirawat stressed that the baht has not weakened significantly compared with other regional currencies and remains relatively stable. He also said the latest depreciation should not be compared with the 1997 Asian financial crisis, describing the recent movement as a one-off event rather than the start of a prolonged decline.

In the near term, SCB FM expects the baht to trade between 33 and 33.50 against the US dollar. The bank said downward pressure remains due to the widening interest rate gap between Thailand and the United States, with the Bank of Thailand expected to keep rates unchanged to support the country’s fragile economy while the US Federal Reserve is also expected to maintain relatively high interest rates because of persistent inflationary pressures.

Thailand’s external position has also weighed on the currency after the country recorded a trade deficit of around US$10 billion in May, followed by another deficit of roughly US$5 billion last month. Despite these headwinds, Mr Wachirawat believes market expectations for wider interest rate differences between Thailand and the US are overly aggressive.

He said both the Federal Reserve and the Bank of Thailand are likely to leave policy rates unchanged for the rest of the year as inflationary pressures begin to ease. As a result, the US dollar is expected to lose momentum, reducing pressure on the baht.

Mr Wachirawat also said Thailand’s external position should improve as the trade deficit narrows and the current account gradually returns to neutral. Based on these factors, SCB FM forecasts the baht will strengthen to between 32.5 and 33 against the US dollar by the end of 2026.

The Bangkokpost reported that strategist advised exporters to hedge around 60% of expected foreign currency receipts through spot transactions while using options to retain flexibility during continued market volatility. Importers, meanwhile, were advised not to rush into buying US dollars at current exchange rates, instead hedging only around 20% of their foreign currency needs before increasing purchases once the baht strengthens later in the year.

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Adapted by ASEAN Now Bangkokpost 5 July 2026

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