Thai Baht Near Year’s Low as Oil Shock, Dovish BoT Weigh

The Thai baht (THB) is trading close to its lowest point in over twelve months against the US dollar, according to OCBC analysts Sim Moh Siong and Christopher Wong. The sell-off has been driven by a combination of global and domestic headwinds.

Volatile crude oil prices are adding pressure, as Thailand is a net oil importer and higher energy costs weigh on the trade balance. Meanwhile, the Bank of Thailand’s (BoT) dovish policy stance—keeping rates accommodative—is further undermining the currency.

On the external front, a broader US dollar rally and rising US Treasury yields are adding to THB’s weakness. The analysts note that the baht may remain under pressure in the near term unless there is a reversal in these trends.