Strong baht to affect Q4 exports, TNSC says
Shippers’ Council worried that the rapid rise in the value of the baht will negatively affect an already-depressed export market
The Thai National Shippers’ Council (TNSC) is concerned that the rapid strengthening of the baht, currently at more than 34 baht to the US dollar, could hinder the growth of the export sector in the fourth quarter of the year.
The sector expanded 2% year on year in the first half of 2024, said TNSC chief Chaicharn Charoensuk on Wednesday, adding that amidst the high number of negative external factors, the only supporting factor for this growth is the weak baht.
He pointed out that in July the baht remained at 36 to 36.5 per US dollar, but now it had risen to up to 34.5 baht per US dollar, or up by two baht in a short time.
Chaicharn stressed that the strong baht could hurt exporters in the last quarter. The pain would be made worse by the lower quantity of agricultural products available during the period to help push the growth trend.
Exports of agricultural products in the first half of this year expanded 20% year on year, he added.
Chaicharn urged shippers to take extra caution when accepting orders that must be delivered in the next three months. He also advised exporters to have insurance covering exchange rate risks.
Kasikorn Research Centre (KResearch) reported that baht peaked on Wednesday at 34.06 baht per US dollar, the strongest it has been in 13 months.
KResearch attributed the fast strengthening of baht during July-August to foreign investors’ anticipation that the US Federal Reserve would cut the policy rate during the last three meetings this year.
The centre estimated that the baht will remain at around 34.5 baht per US dollar until year end.
