Thai Baht: Consolidation expected in defined range against US Dollar – Commerzbank

Thai Baht (THB) is expected to consolidate within a defined range around the US Dollar (USD) in the near term, according to Commerzbank analyst Charlie Lay. The USD/THB pair has weakened from around 33.90 in late July to approximately 32.70, driven by a softer Dollar. The Bank of Thailand (BoT) maintains its expectation of near-term consolidation in the USD/THB pair, with a range of 32.50-33.00.

The BoT's benchmark one-day repurchase rate remains unchanged at 1.00%, and the Monetary Policy Committee (MPC) voted unanimously in favor of maintaining this rate. The BoT appears comfortable with an accommodative stance and may remain on hold for an extended period, potentially until H1 2027, as the current policy setting provides sufficient support to growth while inflation expectations remain anchored.

The Bank of Thailand has noted that recent THB volatility has largely been influenced by Middle East developments and changing expectations for the Federal Reserve. Given the fragile domestic recovery, excessive THB appreciation would be undesirable, but the MPC has not indicated any policy shift in response to currency fluctuations.