According to reports, the baht reached 32.86 to the U.S. dollar on Monday, its strongest level in about 17 months.
Industry groups, including the Thai Chamber of Commerce, have urged the Bank of Thailand (BOT) to cut interest rates to mitigate the baht's rise.
They argue that the strong currency increases production costs, weakens export competitiveness, and could reduce tourist spending.
The government, under both former Prime Minister Srettha Thavisin and current Prime Minister Paetongtarn Shinawatra, has also pressured the BOT for rate cuts to stimulate the economy.
However, BOT Governor Sethaput Suthiwartnarueput has resisted these calls, emphasizing the central bank's independence. He stated that following the U.S. Federal Reserve's rate cuts is not necessary for Thailand and warned that while lower rates might boost short-term growth, they could lead to inflation, increased debt, and speculation.
The standoff between the BOT and government officials has intensified, with Commerce Minister Phumtham Wechayachai criticizing the central bank's approach as outdated and slow.
Despite raising rates eight consecutive times between August 2022 and September 2023 to a decade-high of 2.5 percent, the BOT remains firm in its monetary policy stance, creating tension with those seeking economic stimulation through rate cuts.
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