Thai baht rally may reverse as dovish policy clouds 2026 outlook
What's next: Analysts see the baht weakening to 33.50-34.4 per US dollar as oil imports, fiscal strain and Fed hikes build pressure.
Thailand’s recent baht gains may prove brief as investors brace for a central bank that is expected to keep interest rates low even as higher oil prices strain the economy. The currency has risen 0.9% so far in August, making it one of Southeast Asia’s stronger performers, but analysts at BNP Paribas and MUFG Bank expect it to weaken later this year. Forecasts range from 33.50 per US dollar by the end of 2026 to 34.4 in the fourth quarter. Thailand’s current account shifted to a US$17.7 billion deficit last quarter as energy imports climbed, while planned new borrowing of US$12 billion has added to concerns over fiscal sustainability. Economists also expect elevated US yields and possible Federal Reserve rate hikes to widen the gap with Thailand’s 1% policy rate.