The Thai baht has climbed to levels not seen in more than four years, adding strain on Thailand’s export sector as policy makers and businesses grapple with the implications of the currency’s rapid rise. The baht has been trading around 31.4 to the US dollar this month, a peak not reached since mid 2021, and has strengthened by around nine per cent this year against the dollar, making it one of Asia’s best performing currencies. The move has been fuelled by a softer US dollar, steady capital inflows, record gold prices and strong seasonal tourism receipts, according to market data and reporting. The scale and speed of the appreciation have elevated the issue from a market concern to a political one, placing currency management back on the agenda in Bangkok as officials assess the risks to growth.

Thailand’s export industries are feeling the impact as the stronger baht erodes the local currency value of dollar denominated revenues. Manufacturers and traders say margins are being squeezed at a time when global demand remains uneven and competition from regional peers is intense. The currency’s rise has been closely watched by the Bank of Thailand and the finance ministry, both of which have acknowledged concerns from exporters about competitiveness. The strength of the baht this year has stood out in Asia, amplifying pressure on policy makers to respond without triggering …