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The Thai Baht weakened past 32 per USD, hitting a one-month low after the central bank kept its policy rate unchanged at a near four-year low. The Bank of Thailand unanimously held rates at 1%, its lowest since late 2022, in a widely expected move as policymakers prioritize growth support over near-term inflation risks. The decision reflects a focus on cushioning the economy from heightened external volatility, particularly the impact of the ongoing Middle East conflict. Officials noted that Thailand was already lagging regional peers due to weak demand, high household debt, and political uncertainty. They also warned that the geopolitical tensions could further weigh on growth by lifting costs and eroding purchasing power, while tourism may soften as higher fuel prices discourage travel. Although inflation remains subdued, allowing room for loose policy, the low-rate environment underscores Thailand’s weaker yield appeal compared with regional peers, adding pressure on the baht.

The Thai baht weakened past 32 per dollar in mid-April, retreating from a four-week high, and was among the weakest performers across Asian peers, as the US dollar gained momentum amid renewed escalation in US-Iran tensions. The US military is set to begin a blockade of Iranian ports on April 13, which will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas. Simultaneously, President Donald Trump is reportedly considering limited strikes on Iran. The move follows unsuccessful peace talks, heightening fears of a prolonged conflict. The ongoing tensions are placing significant pressure on Thailand’s economy, particularly through higher energy costs, with officials warning that the impact could exceed that of the 2020 pandemic. Still, the Bank of Thailand has signaled that it will keep interest rates unchanged for as long as possible to support growth, despite rising inflation pressures from higher oil prices.

The Thai baht strengthened to around 32 per dollar, marking its third straight session of gains and hitting its highest level in nearly a month, as the Middle East ceasefire reduced demand for the safe-haven US dollar. The ceasefire agreement revealed that the US and Iran had agreed to a two-week truce, narrowly averting what could have been a devastating escalation in the region. Iranian Foreign Minister Seyed Abbas Araghchi confirmed that access to the Strait of Hormuz would remain open, contingent on coordination with Iran’s armed forces. The Middle East war is severely impacting the Thai economy, especially with rising oil costs, and officials cautioned that the damage could exceed that of the COVID-19 era. Investors are now turning their attention to the Bank of Thailand's monetary policy decision on April 29, after the central bank surprised the markets in February 2026 by cutting its benchmark interest rate by 25 bps to 1%, defying expectations that it would hold rates steady.