In the latest report from the Ministry of Commerce in Thailand, compared to the same period in July last year, 2021, was raised by 7.66% in 2022. The report has shown unexpected forecasts from many economic analysts which are only 7.50%. Now, The Thai baht is depreciated to 35.97 per USD (05/07/2022) which has reached the new high Thai baht depreciation record in 16 years, since 2006.
The CPI (The Consumer Price Index in Thailand) is the key way to measure the changes in purchasing trends and inflation. The spike increased in the CPI in the group of Electricity, fuel, and water supply increased by 33.03%, and the group of Energy increased by 39.97% compared to last year. The overall commodities increased by 7.66%.
Moreover, the Russian invasion of Ukraine and the pandemic-related shutdowns in China are the causes of the worldwide energy crisis that led to disruptions in the global supply chain and also leading to all commodities prices.
The weakening and fluctuation of the baht were driven by expectations the US Federal Reserve would accelerate policy tightening, and concerns over a global economic slowdown, said Daranee Saeju, senior director at the BoT, in a text message to media. Such factors have pushed up the dollar to its strongest level in nearly 20 years, resulting in a steady weakening in regional currencies and the baht, she mentioned.
However, The Baht need to be kept an eye on, there’s a risk that tends to be more depreciated to reach 36.00 baht per USD which may be caused by the China re-lockdown again due to the reported increase in the pandemic. As well as, the BOT has to be kept an eye on the fiscal strategy that will assist with this baht depreciation situation.
By Ashley Jones