Bangkok: Analysts at Merchant Partners Asset Management are cautioning investors regarding the unusual appreciation of the Thai baht, which persists despite numerous negative factors impacting the economy. The baht’s surge is seen as atypical in light of the prevailing negative sentiment.

According to Thai News Agency, Mr. Prakit Siriwatthanaket, Managing Director of Merchant Partners Asset Management, highlighted that the continued rise of the Thai baht is highly unusual, considering the country’s ongoing current account deficit, trade deficit, and capital account deficit. These economic challenges are compounded by the border conflict with Cambodia, a decrease in foreign tourists, and sluggish domestic consumption. Mr. Prakit emphasized that the baht’s appreciation contradicts the prevailing economic reality and is a highly abnormal strengthening.

“The recent appreciation of the Thai baht reflects global market movements that are difficult to pinpoint. Therefore, the inability to find the cause and answer is a negative sign. Investors must be extremely cautious amidst several worrying and unusual factors,” Mr. Prakit said.

Krungthai Global Markets, a subsidiary of Krungthai Bank, reported that the Thai baht continues its strengthening trend and has the potential to appreciate beyond the year-end level of approximately 31.85 +/- 0.25 baht per dollar. The baht opened this morning at 31.47 baht per dollar, “slightly stronger, almost unchanged” from yesterday’s closing level of 31.51 baht per dollar. The Bank of Thailand governor has expressed concern over the rapid strengthening of the baht and has ordered stricter scrutiny of dollar-denominated transactions. It was also revealed that foreign exchange trading by the gold business accounted for as much as 20% of transactions at certain times.