Bangkok: The Federation of Thai Industries (FTI) is urging the Bank of Thailand to take measures to address the appreciation of the baht, which is impacting the competitiveness of key sectors such as exports and tourism. This comes after a meeting between the FTI, led by Chairman Kriangkrai Thiennukul, and Bank of Thailand Governor Vitai Ratanakorn and his executives to discuss financial strategies to support Thai entrepreneurs.
According to Thai News Agency, the FTI presented three main concerns to the Bank of Thailand: counteracting the strengthening baht, addressing the effects of US tariffs and trade conflicts, and promoting liquidity and debt resolution for small and medium-sized enterprises (SMEs). Mr. Kriangkrai highlighted that the baht’s appreciation, surpassing that of regional competitors, is affecting the competitiveness of Thai exports, which comprise over 60% of Thailand’s GDP, and the tourism industry, which accounts for more than 10%.
Mr. Kriangkrai pointed out that earlier this year, the baht strengthened by over 7%, while currencies of competing countries like Vietnam weakened by over 3%, creating a nearly 10% competitive gap. This has resulted in increased prices for Thai exports and deterred tourists due to higher costs compared to neighboring countries. The FTI suggests that maintaining the baht at approximately 34-35 baht per US dollar would enhance competitiveness and support tourism.
He identified several factors contributing to the baht’s appreciation, including short-term capital movements into Thailand’s financial market, significant cross-border gold transactions, and activities related to gray businesses and money laundering. Mr. Kriangkrai emphasized the need for collaboration between agencies like the Bank of Thailand, the Ministry of Commerce, the Customs Department, and the Anti-Money Laundering Office to manage these factors effectively.
The FTI warned that failure to stabilize the currency could lead to limited economic growth of just 1.6% in 2026, with continued contraction in exports. In response to challenges posed by US tariffs and trade tensions, the FTI proposed joint financial measures for affected businesses, including restructuring and supply chain adjustments to meet US requirements and exploring new export markets.
To support SMEs, the FTI recommended targeted low-interest loans and establishing an “SME Fund” to design specialized financial products and facilitate loans for digital and clean energy initiatives. Bank of Thailand Governor Vitai Ratanakorn assured that the central bank is committed to working with the private sector to maintain economic stability and align the baht with economic fundamentals.
Mr. Vitai stated that the BoT will continue to develop financial tools to manage risks for entrepreneurs and address structural economic challenges collaboratively to ensure sustainable growth for the Thai economy.