Baht slide continues as BoT likely to hold interest rate

Dollar strength persists as markets expect higher US interest rates by year-end

The baht has depreciated by 4.9% against the US dollar since the start of 2026. (Bangkok Post File Photo)

The baht is likely to continue its depreciation trend in the near term after falling below 33 to the dollar, unless the Bank of Thailand sends a hawkish signal on Wednesday about a potential interest rate increase, says Kasikorn Research Center.The Thai currency weakened to a 13-month low of 33.18 baht to the greenback on Tuesday from Monday’s close of 32.93 amid growing expectations that the US Federal Reserve may raise interest rates later this year to curb inflation risks, said Kanjana Chockpisansin, head of banking and financial sector research at the K-Research.

Fed funds futures are now pricing in a 54% probability that the Fed will deliver two 25-basis-point rate hikes before the end of this year.

Meanwhile, uncertainty in the Middle East remains elevated despite progress in peace negotiations between the US and Iran. Although Washington has temporarily allowed Iran to resume oil exports for 60 days, several key issues remain unresolved and are still subject to ongoing talks, Ms Kanjana said.