Thailand Faces Volatility of the Baht Amid Gold Market Pressure

CoinBasedThinking · 2026-02-09T06:03:37+00:00

Thailand is facing challenges regarding the stability of the baht, influenced by rising gold prices and a weakening US dollar. The central bank has implemented strict regulations for gold trading to manage these issues and ensure macroeconomic stability.

CoinBasedThinking

2026-02-09 06:03:37

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Recently, Thailand has been facing a series of challenges related to the stability of the baht in the foreign exchange market. Earlier this week, developments in the gold market put pressure on the exchange rate, forcing authorities to implement strong measures to stabilize the situation.

Increased Foreign Capital Flows from Gold Trading

The significant rise in global gold prices combined with the weakening of the US dollar has created a “perfect storm” for the Thai market. As gold prices surged, Thai investors quickly sold off their gold holdings, resulting in a large influx of foreign currency into the country. This directly exerted pressure on the baht, causing the currency to appreciate uncontrollably.

Central Bank Affirms Management Capabilities

On January 30, Chayawadee Chai-Anant, Deputy Governor of the Bank of Thailand, announced in Bangkok that the country has sufficient capacity to manage the baht exchange rate. Although the US currency monitoring list is watching Thailand for potential currency manipulation, he emphasized that the likelihood of such an event is very low. Additionally, the central bank committed to maintaining ongoing communication with the U.S. Department of the Treasury to clarify related concerns.

New Regulations to Control Gold Transactions

To limit speculative activities and volatility of the baht, the central bank is tightening regulations on online gold trading. These new rules, effective from March 1, include stricter payment and reporting requirements. Accordingly, online platforms are prohibited from conducting net payments and short selling, while investors are only allowed to sell physical gold they actually hold. Furthermore, all gold transactions must be settled through electronic systems, with cash payments completely banned.

These measures not only help stabilize the baht but also reduce speculation risks in Thailand’s gold market, demonstrating the central bank’s determination to maintain macroeconomic stability.

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