Thailand’s current account balance is improving in July from the previous month on robust exports, easing pressures on the baht.
Thailand’s current account – the broad measure of goods and services trade – has been in deficit since November 2020 largely due to lack of tourist arrivals amid the pandemic. In July, the deficit narrowed to USD680m (THB21.9bn) against USD1.3bn in June thanks to a lower deficit in net services, Bank of Thailand data showed on Tuesday.
Net services, which have been in deficit since February 2020, improved from a deficit of USD5.2bn to USD4bn deficit in July. Exports stayed robust, rising 21.7% year-on-year to USD22.55bn in July.
To help the tourism sector – a crucial cog in Thailand’s economy – the government since 1 July has introduced the so-called ‘Phuket sandbox’ which allows vaccinated international tourists to visit without quarantine requirements.
The government also plans to resume domestic flights between high-risk areas for COVID starting Wednesday. The move followed easing measures such as allowing cross-province travels and malls and diner operations amid a falling number of daily cases (around 16,000 in recent days from over 23,000 in early August).
Baht edges up
Expectations on economic reopening have boosted the Thai baht. The currency surged nearly 2.5% against the US dollar last week. The uptrend continues, as the local unit edged up to 32.27 to the dollar in afternoon trade in Asia (versus 32.50 on Monday).
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The recent rally has curbed baht’s losses against the greenback. So far this year, the local unit has lost around 7.3% of its value against the dollar, much improved from over 10% depreciation slightly over a week ago.