BANGKOK, Sept 23 (TNA) – Thailand’s central bank has identified the more than 40% surge in global gold prices as a key factor behind the recent appreciation of the Thai baht.
This rapid rise has prompted a rush of gold sales abroad, with foreign currency being converted back into baht, putting upward pressure on the currency and making it stronger than its regional counterparts.
A Bank of Thailand (BOT) official noted that while a weaker U.S. dollar and improved domestic economic confidence are also at play, the relationship between gold prices and the baht is particularly volatile.
The BOT is now considering new measures to mitigate the pressure, including a proposal to encourage direct gold trading in U.S. dollars.
The central bank plans to meet with gold traders next week to follow up on this and other joint initiatives aimed at stabilizing the currency.
The BOT plans to meet with gold traders again next week to follow up on joint measures aimed at easing the pressure from gold trading on the baht’s value. -819 (TNA)