To the delight of British tourists and expats, the UK pound touched 46 on the early morning of Thursday March 21. This translates to a tourist rate of slightly above 45 and a half baht in most Thai currency exchange shops.
The pound’s improvement – it is now at its highest level against the baht for several years – is mostly attributed to the weakness of the Thai economy according to financial commentators. Kasikorn Research Center points to sluggish exports, public investment and domestic consumption. Revenue from international tourism still lags behind pre-covid levels.
The public disagreement between the Thai premier and the Bank of Thailand about whether to reduce interest rates is a further worry to financial markets. The central bank authorities are concerned about the effects on inflation if interest rates are reduced to improve domestic consumption.
The British economy, meanwhile, is viewed as broadly neutral present. The March 2024 budget contained no surprises, whilst the cut in national insurance contributions and the freezing of duty on alcohol and fuel had been anticipated by international markets. Kasikorn also points out that the Thai currency is falling against the US dollar as the Federal Reserve declines to reduce borrowing rates for the time being.
