Thai baht to continue dropping against the USD

The Thai baht is forecast to droop to a 4-year low over the next trading week, and its largest monthly currency drop for over 20 years. The Baht’s challenges shadow US dollar gains over concerns about the US Fed’s (US Federal Reserve) ‘tapering’ plans as it reins in enthusiastic stimulus of the US economy.

Thailand’s baht has been the region’s worst-performing currency over 2021, dropping over 11% in value against the USD. The US dollar is now close to a one-year high as investors worry that the US Fed could start pushing up interest rates during the next 12 months.

For its part, the Bank of Thailand has responded this week by leaving its policy rate unchanged despite Thailand’s tourism-dependant economy being ravaged by the government’s closed borders.

According to Reuters, Thailand’s central bank says its economy remains “extremely fragile” and has a “very…