Thai Baht Drops to Three-Year Low as Tourism Recovery Stalls
The Thai baht slid to 37.2 per dollar, a three-year low, as Chinese tourist arrivals continued to lag pre-pandemic levels by 30%.
Baht Under Pressure From Multiple Fronts
The Thai baht weakened to 37.20 per dollar on November 23, its lowest level since November 2022, as the country's tourism recovery continued to disappoint and widening interest rate differentials with the United States weighed on the currency. The baht has depreciated 9.4% against the dollar this year, making it the worst-performing currency in Southeast Asia.
The Bank of Thailand estimated that 24.8 million international tourists visited the country in the first 10 months of 2025, representing 72% of the 2019 pre-pandemic level. Chinese arrivals, historically the largest source market, reached 4.6 million, roughly 70% of the 6.7 million recorded in the same period of 2019.
Chinese Tourists Spend Less
Beyond the shortfall in visitor numbers, average spending per trip by Chinese tourists has declined 28% from pre-pandemic levels, according to the Tourism Authority of Thailand. The shift reflects both a weaker Chinese economy and changing travel preferences, with younger Chinese tourists favoring Japan and South Korea over Southeast Asian destinations.
"Thailand's tourism model relied heavily on Chinese group tours with high per-capita spending," said Pipat Luengnaruemitchai, chief economist at KKP Financial Group in Bangkok. "That model has structurally changed, and Thailand needs to diversify its source markets more aggressively."
Central Bank Holds Rates
The Bank of Thailand held its policy rate at 2.25% in November, diverging from regional peers including the Philippines, Indonesia, and South Korea, which have all begun easing. The central bank cited lingering inflationary risks from the weaker baht, which raises import costs for the food- and energy-importing economy.
However, the rate differential with the U.S. Federal Reserve's 5.0% benchmark has widened to 275 basis points, creating persistent capital outflows from Thai bond markets. Foreign investors sold a net 82 billion baht ($2.2 billion) of Thai government bonds in the third quarter.
Economic Growth Underwhelms
Thailand's GDP grew 2.3% year-over-year in the third quarter, the weakest among major ASEAN economies. Household debt, at 91% of GDP, remains the highest in the region and has constrained consumer spending. The government's 10,000-baht digital wallet stimulus program, which began distributing payments in September, has provided a modest boost but fell short of the 2 percentage-point GDP uplift officials had projected.
Exports grew 4.1% in October, supported by electronics and automotive parts, but the trade balance remained in deficit due to elevated energy import costs.
Government Responds
Prime Minister Paetongtarn Shinawatra directed the Ministry of Tourism to launch a 5-billion-baht marketing campaign targeting Indian, Middle Eastern, and European travelers. Thailand also extended its visa-free entry program for Chinese and Indian nationals through 2026.
Analysts at Standard Chartered expect the baht to stabilize around 36.5 by mid-2026, contingent on an improvement in tourism flows and a potential Fed rate cut. The currency's next key support level is 37.50, last tested during the early-pandemic market disruption of 2022.
