The exchange rate between the UAE Dirham (AED) and the Thai Baht (THB) has shown recent stability, currently trading near 30-day lows of approximately 8.7736, which is just below its three-month average. The exchange rate has remained within a tight range of 3.9%, fluctuating between 8.6081 and 8.9426.
Recent developments influencing the AED include a notable currency swap agreement between the UAE and Turkey, valued at approximately 18 billion AED. This agreement, aimed at enhancing local currency liquidity, is anticipated to support the AED's stability in the region. Moreover, the International Monetary Fund (IMF) recently provided a positive outlook for the UAE economy, projecting a growth rate of 4.8% for 2025. This economic resilience may bolster confidence in the AED moving forward.
On the other hand, the THB faces challenges due to escalating US-China trade tensions, which have prompted the Thai central bank's Deputy Governor to predict slower economic growth in Thailand. This uncertainty may weigh on the baht. Additionally, the Thai government is actively collaborating with the Bank of Thailand to monitor and manage the baht's strength to mitigate potential negative impacts on exports and tourism, crucial sectors for Thailand’s economy.
The price of Brent Crude oil, a key driver for both currencies, also presents mixed signals. Current oil prices at $65.07 are 1.7% below the three-month average, suggesting a volatile market with fluctuations ranging from $60.96 to $70.13. Since Thailand is a net oil importer, lower oil prices could benefit its economy by reducing import costs, while sustained high oil prices could support the AED due to the UAE's oil-exporting status.
Considering these developments, analysts remain cautious but optimistic about the AED's stability amidst a turbulent global economic landscape. In contrast, experts suggest that the THB may continue to experience pressure from both external trade considerations and domestic policy intervention, making its near-term outlook more uncertain. Overall, the market dynamics indicate that those involved in currency transactions may benefit from closely monitoring these factors as they play out.
