The Bank of Thailand is preparing to weaken the Thai baht by 2026 amid new regulatory policies

Fitch, BMI’s research division, has published a forecast regarding upcoming changes in the currency market. According to the analysis, by the end of 2026, the Thai baht may significantly weaken, with the USD/THB parity expected to be at 32.00. Experts emphasize that current market volatility is driven not only by macroeconomic factors but also by increased regulatory measures from Thai authorities.

Gold Transactions Under New Regulation

Starting March 1, the Bank of Thailand will implement a fundamentally new regulation for precious metal transactions. The institution will set a daily limit of 50 million baht for gold transactions. Any operations exceeding this amount will require prior approval from the central bank. This restriction aims to control uncontrolled capital flows previously associated with active gold trading within the country.

Decoupling of Gold and Baht

BMI notes a significant change in the correlation between gold prices and the value of the Thai baht. While these assets previously showed a positive interdependence, the introduced regulatory measures will gradually weaken this established link. It is expected that new restrictions will slow capital inflows into gold-oriented strategies, impacting the baht’s exchange rate.

Monetary Policy and Exchange Rate Outlook

Fitch analysts forecast that the Bank of Thailand may lower interest rates to support economic growth. A projected reduction of 50 basis points in 2026 would bring the rate to 0.75%. This policy, combined with regulatory restrictions, creates conditions for the Thai baht to weaken further throughout the remainder of the year.