Siam Commercial Bank (SCB) expects the baht to gradually weaken against the US dollar this year, projecting the currency to reach 33 baht per dollar by the fourth quarter, amid a mix of domestic and global pressures.
The bank forecasts the baht at 31.50 per dollar in the first quarter, edging up to 31.70 in the second quarter, 32 in the third quarter and 33 by year-end.
Wachirawat Banchuen, senior strategist at SCB Financial Markets, said the depreciation outlook reflects both internal and external dynamics.
Domestically, improving political stability has bolstered investor confidence, drawing foreign capital into Thailand’s equity and bond markets. Foreign investors posted net inflows of 54 billion baht into Thai equities in February following the election, while bond markets recorded net inflows of 43 billion baht in January.
He added that the Bank of Thailand’s recent 25-basis-point policy rate cut to 1%, coupled with clearer signs of economic recovery, should further support sentiment. SCB expects foreign capital to remain in net inflow territory throughout the year.
On the external front, the US dollar is likely to stay firm as markets anticipate a relatively hawkish stance from the US Federal Reserve. Ongoing concerns over the Fed’s independence, slowing US economic growth and heightened global trade uncertainty linked to US tariff measures are expected to keep currency markets volatile, limiting any sustained dollar weakness this year.
Patrick Poulier, first executive vice-president and head of SCB Financial Markets, noted that the baht appreciated more than 8% year-on-year in 2025, with volatility climbing above historical averages. The stronger and more volatile currency has weighed on exporters’ revenues and created broader economic ripple effects.
In response, businesses have stepped up foreign exchange risk management. The volume of forward contracts and options has increased significantly, now accounting for more than 60% of total forex transactions.
“With higher currency volatility, we are encouraging clients to hedge their exposure and diversify across currencies to reduce reliance on the US dollar, helping stabilise costs and revenues,” Mr Poulier said.
SCB has also expanded its use of digital and artificial intelligence tools to help clients manage foreign exchange risks through online platforms offering integrated forex and cash flow management solutions.
Digital channels currently account for about 40% of the bank’s total forex transactions. SCB aims to lift this share to more than 50% by the end of 2026. Online forex transactions rose more than 30% year-on-year last year, he added.