Thailand's central bank has taken action to moderate the baht's fluctuations, according to Bank of Thailand Assistant Governor Chayawadee Chai-anant, following the currency's climb to four-year highs, posing risks to the nation's fragile economic recovery.
The baht was trading at approximately 31.87 against the dollar, marking an eight percent increase for the year and representing the second-best performance among Asian currencies, trailing only Taiwan's dollar.
"The central bank is closely monitoring and managing the movements of the baht during this period, as evidenced by the increase in foreign reserves," Chayawadee Chai-anant states.
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"Our approach remains the same, ensuring the baht does not fluctuate or move too fast."
The currency's outperformance compared to other regional currencies poses challenges for exports and the tourism sector, which are vital components of Southeast Asia's second-biggest economy.
Several factors have contributed to the baht's recent rally, including dollar weakness, a current account surplus, gold trading activities, and political stability, according to Ms Chayawadee. The newly appointed Prime Minister Anutin Charnvirakul's cabinet has secured royal endorsement.
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Nevertheless, the Bank of Thailand currently has no immediate intentions to implement a gold tax, as the matter requires additional deliberation, Ms Chayawadee noted.
She emphasized that taxation represents "merely one option," while the central bank explores other potential cooperative measures with market players, such as encouraging gold transactions denominated in US dollars.
Chayawadee also indicated that no abnormal speculative currency trading through capital flows has been observed.
New Finance Minister Ekniti Nitithanprapas stated that the Thai government will collaborate with the central bank on baht management while keeping watch over capital flows and gold trading for any anomalies.
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During the January-July timeframe, Thailand's gold exports jumped 82 percent compared to the previous year, reaching $7.6 billion, including remarkably high shipments of $2.1 billion to Cambodia.
Chayawadee mentioned that the central bank is coordinating with appropriate authorities to examine gold shipments destined for Cambodia.