BANGKOK — Thailand’s business leaders are raising alarms over irregular gold exports to Cambodia that may be artificially strengthening the baht and threatening the country’s economic recovery.
Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries, said the Joint Private Sector Committee (JPSC) has discovered unusual patterns in trade data, particularly gold shipments to Cambodia worth tens of billions of baht.
“We noticed that Cambodia is a small country, yet Thailand exports an unusually high volume of gems and jewelry there. When we examined the details, we found it was primarily gold, and the amounts were far higher than historical norms,” Kriengkrai said.
Potential Links to Underground Economy
The JPSC, which includes the Thai Chamber of Commerce, Federation of Thai Industries, and Thai Bankers’ Association, suspects these exports may be contributing to the baht’s strength. The committee plans to meet with the Bank of Thailand, Finance Ministry, and other agencies to investigate.
Kriengkrai noted that the gold exports may involve both legitimate and illegitimate activities, given Cambodia’s reputation as a hub for scam operations. “We need to verify the exact proportions and examine whether this connects to underground businesses,” he said.
Baht Strength Defies Economic Logic
The Thai baht has strengthened to 31.70 per dollar as of September 11, with analysts predicting it could reach 31.50. This appreciation seems counterintuitive given Thailand’s weak economy and recent interest rate cuts by the Monetary Policy Committee.
“The baht’s current strength doesn’t reflect our economic reality. With poor purchasing power and weak domestic conditions, the currency should typically be weaker,” Kriengkrai explained.
Since mid-year, the baht has appreciated over 7%, making it the region’s second-strongest performer after Taiwan’s currency.
Double Hit for Exporters and Tourism
The currency strength creates additional challenges for Thai businesses already struggling with 19% US import tariffs. More concerning is the potential impact on tourism, a key sector Thailand hopes to revive in the second half of the year.
“If the baht remains strong, tourists considering Thailand might choose cheaper alternatives like Vietnam or Japan instead,” Kriengkrai warned.
The investigation into Cambodia’s gold trade highlights how illicit financial flows could undermine Thailand’s broader economic recovery efforts, affecting everything from manufacturing exports to tourist arrivals.
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