BOT Reassures Markets as Thailand Rejoins US Currency Watch List

 

 

The Bank of Thailand insists its inclusion on the US Treasury watch list is due to trade surpluses and will not hinder its ability to stabilise the Baht.

 

The Bank of Thailand (BOT) has moved to calm market concerns after the United States returned the kingdom to its "Monitoring List" for currency practices.

 

Central bank officials stated on Friday that the move was expected and will not obstruct their mandate to maintain the stability of the Thai Baht.

 

The US Treasury’s latest semi-annual report, published on Thursday, highlighted Thailand’s current account surplus, which reached 3.8% of GDP between July 2024 and June 2025.

 

This exceeded the 3% threshold set by Washington, placing Thailand alongside nine other major economies—including Japan, South Korea, Germany, and Singapore—under heightened scrutiny.

 

Chayawadee Chai-anant, assistant governor and BOT spokesperson, clarified that Thailand met two of the US Treasury’s three criteria: a significant trade surplus with the US and a global current account surplus.

 

"This is not a new situation for us," Chayawadee told reporters. "Thailand was on this list previously between 2020 and 2021 for several cycles. We maintain an open, transparent dialogue and exchange data with the US Treasury at all times."
 

 

 

 

 

 

Maintaining Policy Flexibility

A key concern for investors is whether the US designation will prevent the BOT from intervening to curb the Baht’s volatility.

 

However, the BOT insists its policy remains "two-sided," meaning it intervenes to manage both rapid appreciation and depreciation rather than steering the currency in a single direction to gain a trade advantage.

 

"The US evaluation focuses on the net value of interventions," Chayawadee explained. "Because we manage the Baht in both directions to reduce volatility, we retain sufficient 'room' and flexibility to ensure the exchange rate remains in line with economic fundamentals without breaching strict US criteria."

 

Following the report's release, the BOT noted that financial markets showed no negative reaction, suggesting the move was already anticipated by investors.

 

 

 

Low Risk of ‘Manipulator’ Label

The BOT has largely dismissed the risk of Thailand being formally labelled a "Currency Manipulator"—a designation that could trigger formal sanctions.

 

Officials noted that the global financial context has shifted away from fixed exchange rates, and the latest US report did not apply the label to any of its trading partners.

 

"As long as we focus on reducing volatility and maintain our two-sided management, we can justify the necessity of our actions for financial stability," Chayawadee said. "It is important to note that in this latest report, no country was designated as a currency manipulator."

 

 

 

 

Future Outlook and Trade Concerns

The US evaluates its partners twice a year on a staggering six-month basis.

 

The next review will cover January to December 2025, with the report expected in mid-2026.

 

Given Thailand’s persistent trade and current account surpluses—currently sitting at approximately $17.7 billion—it is likely the kingdom will remain on the list for the foreseeable future.

 

Regarding fears that this could lead to new import tariffs, the BOT emphasised that currency monitoring and trade negotiations (handled by the US Trade Representative) are separate, parallel processes.

 

The bank concluded that the scrutiny is unlikely to impact trade talks, as the list is a monitoring tool rather than a punitive measure.