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Thailand’s ‘Super-Baht’ May Be Too Strong For Its Own Good

  • Strong currency can sting as exports make up 70% of economy
  • Since crisis, Thailand improved regulations, trade position
Operations At A Krung Thai Bank Branch And Chief Executive Officer Vorapak Tanyawong Interview
Photographer: Brent Lewin/Bloomberg
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Two decades ago, Thailand became ground zero of the Asia financial crisis, when its government scrapped a dollar peg with the baht, a devaluation that unleashed a wave of speculative attacks on other regional currencies and shook the global economy. Now, the baht is again posing challenges for Thailand--but this time because it may be too strong.

Near-record foreign exchange reserves and a current-account surplus have burnished the baht’s appeal as a regional haven and attracted foreign capital to Thai bonds. The currency is the strongest performer in Southeast Asia in the past year. The super baht, however, is a complication for policy makers trying to nurture a recovery in an economy where exports account for about 70 percent of gross domestic product.