Thai Baht Strength Posts Risks to Economy, Finance Minister Says

The strengthening of the Thai baht is a risk to Thailand’s economy at the moment as it reduces export volumes, the finance minister said on Friday, driven by external factors and the central bank is monitoring the movement of Thai currency.

Finance minister Arkhom Termpittayapaisith said in a ministry event that the business sector needs to hedge against foreign exchange risks.

Thai baht has been picking up steam as of late, gaining more than 2% in the past week after the U.S. Federal Reserve raised the rate by 25 basis points and pointed out that the hike could be longer than expected as the job market remained strong, while global demand shrank.

Thai baht has become Asia’s second-best performer this year with a gain of 2.7%.

The finance ministry expected economic growth at 3.8% this year, up from estimated growth of 3.0% in 2022. The government will report official 2022 gross domestic product (GDP) data on February 17.