The exchange rate forecast for the Indian Rupee (INR) against the Thai Baht (THB) suggests a challenging landscape influenced by geopolitical tensions and trade policies. Recent developments indicate that the INR is facing mixed influences, particularly as the US-imposed tariffs under President Trump's administration continue to impact global currencies. Analysts noted that the rupee's risks are currently "broadly balanced," yet its value has steadily weakened against the dollar due to fears surrounding surging energy prices, which could escalate inflation and prompt interest rate hikes in India.
The Indian economy's heavy reliance on oil imports means that any increase in crude oil prices will adversely affect domestic inflation. As the dollar thrives amid expectations of strong US growth fueled by potential tax cuts and deregulation, investors are retreating from Asian currencies, including the INR. Furthermore, heightened uncertainty and volatility surrounding Trump's trade policies are poised to affect the typically stable Indian rupee.
On the other hand, the Thai Baht has also come under pressure, impacted by the same trade tensions as it faces a 36% reciprocal tariff rate on goods. The recent announcement of new tariffs on China has dampened hopes of a short-lived trade conflict and has contributed to a decline in the Thai baht alongside other regional currencies. Reports indicate that the baht has slid about 2% in response to these events, part of a broader trend affecting emerging Asian currencies.
The INR/THB exchange rate is currently at 90-day lows around 0.3760, which is 3.4% below its three-month average of 0.3891. It has remained within a relatively stable 7.5% range between 0.3760 and 0.4042. This stability is under scrutiny, especially given the THB's sensitivity to oil price fluctuations. With oil prices currently trading at approximately $74.23, this figure is 10.9% above the three-month average of $66.94 and has experienced considerable volatility, trading within a 24.7% range from $60.14 to $75.02.
In summary, forecasts point towards continued volatility in the INR to THB exchange rate, shaped by global trade dynamics and rising oil prices. Both currencies are likely to remain under pressure amid these economic uncertainties, impacting international transaction costs for individuals and businesses.