Bangkok: Siam Commercial Bank (SCB) has urged Thai businesses to quickly adapt to ongoing global market volatility as they navigate the challenges of 2026. The strengthening Thai baht is putting pressure on exports, and SCB is committed to enhancing the role of its SCB Financial Markets (SCBFM) group as a strategic financial risk advisor. The bank estimates the exchange rate will fluctuate between 31.00 and 32.00 baht per US dollar in the coming months.
According to Thai News Agency, Mr. Patrick Pulia, Senior Vice President and Head of Financial Markets at SCB, stated that the Thai baht is projected to appreciate by over 8% annually by 2025, impacting the income of Thai exporters and the country's GDP. Thai businesses have become more aware of the need to hedge against exchange rate risks, as evidenced by the increased volume of forward and options transactions at SCBFM, which now account for over 60% of all FX transactions. The bank is also promoting currency diversification to mitigate the impact of US dollar volatility.
SCB identifies 2026 as a challenging year for the financial market due to geopolitical tensions, potential changes in US policies, high global interest rates, and structural changes in supply chains. To support business clients, SCBFM has defined strategies like FX Advisory, focusing on tailored financial instruments and recommending increased use of risk management tools to 70-80% in 2026. The Go Global initiative supports international investment diversification, while Digital and AI Adoption aim to develop a comprehensive online risk management solution.
Mr. Wachirawat Banchuen, Senior Financial Market Strategist at SCB, highlighted the increased volatility of the Thai baht, influenced by factors such as gold prices and significant capital inflows into the Thai stock market. The baht is expected to remain strong against the US dollar due to continued capital inflows into Asian emerging markets and potential US interest rate cuts. The Thai economy faces challenges such as negative inflation, weak domestic demand, and high household debt, which the Monetary Policy Committee monitors closely for potential further interest rate cuts.