This year, the strengthening of the Thai baht has been closely watched. Starting from around 34.00 baht per US dollar early this year, it has now plunged to as low as 31.38 baht per US dollar, marking the strongest level in over four years. Naturally, this affects exporters and overseas workers who receive fewer baht. But beyond that, what is driving this baht appreciation? Is it just gold trading or US dollar weakness, or could money laundering be involved?
Today (17 Dec 2025), the Thai baht continues to strengthen, opening at 31.47 baht per US dollar. Analysts expect the currency to trade within a narrow range. For example, Krungthai GLOBAL MARKETS forecasts a range of 31.40 to 31.60 baht per US dollar today. The main factors driving baht fluctuations are the US dollar exchange rate and the Bank of Thailand's monetary policy interest rate outlook.
After the Monetary Policy Committee (MPC) cut interest rates as expected but did not provide clear signals for further future cuts or significantly revise Thailand's economic outlook, market participants may still anticipate additional rate cuts by the MPC down to around 1.00%. This could encourage foreign investors to buy Thai long-term bonds, which might support the baht.
Historical data analysis shows the baht rarely weakens significantly unless the MPC substantially downgrades its economic outlook for Thailand, which would increase depreciation risk.
Latest developments Prime Minister and Minister of Interior Anutin Charnvirakul has tasked the Ministry of Finance, Ministry of Commerce, and the Bank of Thailand to urgently address the baht's appreciation, recognizing it as a major issue for Thailand.
Another key factor affecting baht movement is the stance of the Bank of Thailand (BOT). Yesterday (16 Dec 2025), BOT Governor Vithai Ratanakorn stated that the baht has appreciated 2.5% in December alone. The main causes are: 1) the weakening US dollar, 2) Thailand's seasonal inflows from tourism, exports, and capital, and 3) foreign exchange transactions by gold traders.
"Foreign exchange transactions by gold businesses can account for up to 20% of total foreign exchange trading at times, contributing to baht volatility. Additionally, the BOT has discussed with the Ministry of Finance the need for appropriate regulatory agencies to oversee the gold business, especially online gold trading platforms, whose large transaction volumes have clearly impacted baht fluctuations," Vithai said.
The BOT has started measures to manage the baht by tightening controls on US dollar sales for baht purchases by gold businesses. Banks have been instructed to rigorously verify documentation for these foreign exchange transactions. The BOT is also requesting a Ministry of Finance announcement to empower it to demand relevant data and audit currency trading activities.
For those following the baht's appreciation, the BOT has focused mainly on gold transactions. However, social media debates question whether illicit funds and scammers laundering money through Thailand—via gold or cryptocurrencies—are affecting the baht.
This question is not new. The private sector, including the Federation of Thai Industries, has repeatedly raised concerns that baht appreciation might stem from money laundering and scammers, especially given the surge in gold trading and crypto transactions.
Furthermore, Dr. Phiphat Luangnarumitchai, Chief Economist at Kiatnakin Phatra Financial Group (KKP), has highlighted vulnerabilities in Thailand's financial system exploited by criminals. One example is the crypto market, where even with customer identification at exchanges, tracking funds moved outside exchanges remains difficult. Implementing the Travel Rule could help mitigate this issue.
However, there is also a perspective from Rung Sanguanruang, Senior Director of Global Markets Planning at Bank of Ayudhya (BAY), who told Thairath Money that gold trading is a significant factor in baht appreciation due to its large volume. Although crypto transactions are substantial monthly, as they mostly occur within exchanges, they are not seen as significantly impacting the baht's movements. Nonetheless, ongoing monitoring and analysis of the baht's underlying causes remain essential.
Ultimately, understanding what drives baht appreciation requires close attention from the government and relevant agencies, as rapid strengthening can impact Thai consumers and businesses.
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