On the heels of a week marked by economic surprises and shifting investor sentiment, Thailand's financial landscape is drawing intense scrutiny from both domestic and international observers. As the Stock Exchange of Thailand (SET) index posted a modest 3-point gain on September 12, 2025, underlying currents in the currency and commodities markets have sparked debate—and concern—among business leaders and policymakers alike.
According to Thansettakij, the spotlight has landed squarely on the Thai baht, which has appreciated sharply in recent months, defying expectations amid a lackluster domestic economy. The baht's climb—over 7% since the start of the year, making it the second-strongest currency in the ASEAN region after Taiwan—has left exporters, tourism operators, and analysts scratching their heads. "The reality is that the Thai economy is not performing well," said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), during a high-level meeting of the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB). "Normally, the baht should be weakening, but instead, it has strengthened considerably, which is quite abnormal."
One of the key drivers behind this currency anomaly, he noted, is a sudden boom in gold exports—particularly to Cambodia. Data from January through July 2025 shows Thailand exported over $2.1 billion (about 68 billion baht) worth of gold to Cambodia, accounting for 28.2% of all gold exports and ranking second only to Switzerland. The surge, up 28.3% from the previous year, is raising eyebrows given Cambodia's relatively small economy. "Cambodia is a small country, so why does Thailand export so much gold there? It brings in a large amount of foreign currency, which then has to be converted into baht, increasing demand for the currency and causing it to appreciate," Kriengkrai observed.
The JSCCIB has flagged these unusual gold flows as a matter of urgent concern, calling for the government, the Ministry of Commerce, the Ministry of Finance, and the Bank of Thailand to investigate. While there is no definitive proof yet, the committee worries that the pattern could be linked to underground or illicit economic activity, especially given Cambodia's reputation as a hub for online scams. "We need the authorities to separate out the value of gold trade to determine exactly what irregularities exist and to ensure the Bank of Thailand manages the baht's movements appropriately," Kriengkrai urged.
The abnormal strength of the baht is having a double-edged effect on the Thai economy. On one hand, it signals a robust inflow of foreign currency, but on the other, it is hurting exporters and tourism operators—two pillars of the Thai economy. Exporters are feeling the pinch from both the strong baht and a 19% U.S. import tariff, making Thai goods less competitive abroad. The tourism sector, which the government is banking on for recovery, is also at risk. As Kriengkrai explained, "If the baht remains strong, tourists who want to come to Thailand—where everything is good, from the places to the food and service—may hesitate because of economic concerns. They might choose other destinations in the region, like Vietnam, where costs are lower, even if the service isn't quite as good."
Meanwhile, the policy response has been somewhat muted. The Bank of Thailand recently cut interest rates by 0.25%, a move that, under normal circumstances, would be expected to weaken the baht. Yet the currency has continued to strengthen, suggesting that other forces—like the gold export surge—are at play. The JSCCIB is closely monitoring the situation and has already sounded the alarm that the baht's appreciation is out of step with the country's real economic conditions. "We have already sent signals that the baht is too strong and does not reflect the true state of the Thai economy," Kriengkrai noted.
The broader market context, however, is not entirely bleak. On September 11, 2025, Bernstein, a global investment research and management firm, issued a bullish report recommending investors to buy shares of a company referred to as 'Rising Star.' The report, as cited by Investing.com, outlined four reasons for optimism about the stock's future performance. Bernstein's analyst, Venugopal Garre, expressed confidence in the company's growth prospects, suggesting that market sentiment could be turning more positive despite the macroeconomic headwinds.
Bernstein's report also touched on the improving trade relations between the United States and India, which could provide a much-needed boost to global investor confidence. According to the firm's analysts, a potential trade agreement between the two countries might benefit sectors like IT and manufacturing in India, and could help "de-risk" certain industries. "The impact—whether positive or negative—of a trade deal will be driven more by sentiment than by fundamentals in the short term," Garre and his team noted in their briefing to clients.
The report comes at a time when U.S. President Donald Trump has been vocal about ongoing trade negotiations with Indian Prime Minister Narendra Modi. Trump recently doubled tariffs on Indian goods to 50% and has called on the European Union to impose 100% tariffs on India and China as part of a broader effort to pressure Russia over the war in Ukraine. Despite the tough rhetoric, both Trump and Modi have expressed optimism about reaching a mutually beneficial agreement. "I am confident there will be no difficulties in achieving a successful conclusion for our two great countries!" Trump posted on social media, as reported by Media. Modi, for his part, described the U.S. and India as "close friends and natural allies," adding that he is "confident" the talks will "unlock the limitless potential of the India-U.S. partnership."
While these global developments are stirring excitement in equity markets, Thai analysts caution that the immediate effects on Thailand may be limited. According to Bernstein, the excitement in stock markets is being driven by sentiment rather than fundamentals, at least in the short term. The real challenge for Thailand lies in managing the complex interplay between currency movements, export competitiveness, and the need for regulatory vigilance in the gold trade.
As the SET index edges higher and foreign investment appears poised for a rebound, all eyes are now on the Bank of Thailand and the new government to see how they will address the currency conundrum. The call for transparency and decisive action is growing louder. "What Thailand needs to do is either devalue the currency or maintain its stability," Kriengkrai concluded. In a region where economic winds can shift quickly, Thailand's ability to adapt—and ensure fair play in its financial system—may well determine its fortunes in the months ahead.