Analysts believe that the strength of the Thai baht may have been one of the factors prompting the Bank of Thailand’s surprise decision to cut interest rates. The baht has risen 1.8% so far this year, building on last year’s gain of more than 8%. The baht’s appreciation has prompted Thai authorities to take a series of measures to curb its strength and protect exporters. Lloyd Chan, a foreign exchange strategist at Mitsubishi UFJ Financial Group, Inc., stated that given negative inflation and a generally weak growth outlook, he had long expected the Bank of Thailand to make a non-consensus decision to cut interest rates, despite the recent political clarity following the election and the rebound in economic growth in the fourth quarter. The baht’s strength may also be a factor contributing to policy easing. Against the backdrop of a weaker U.S. dollar and firm gold prices, the baht is likely to appreciate moderately, with the USD/THB exchange rate projected to reach 30.50 by the end of 2026. As the Bank of Thailand nears the end of its easing cycle, policy-related downside risks to the baht are diminishing, and the focus in the foreign exchange market will shift to growth and external drivers rather than expectations of further rate cuts.