Thailand to evade US currency list

Treasury assesses manipulation A man walks past a foreign exchange house, with vinyl featuring dollar bills on its door and walls, in Ciudad Juarez, Mexico, on Feb 10. (Photo: Reuters) Thailand is likely to be removed from the US Treasury's Currency Monitoring List in the next review after meeting only one of the three assessment criteria, while the Bank of Thailand continues to manage the exchange rate primarily to maintain orderly market conditions rather than to gain a trade advantage, says Kasikorn Research Center (K-Research).Thailand's current account surplus is expected to remain below the US threshold, according to the think tank. The US Treasury kept Thailand on its list in its latest semi-annual report, unchanged from the previous review. Nine other economies remained on the list: China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland and Switzerland. Thailand's assessment improved, only ticking one of the criteria instead of two after its current account surplus dropped below 3% of GDP. The country's bilateral trade surplus with the US, however, remained above the US benchmark. K-Research noted the July 2026 report is based on data for the four quarters that ended in December 2025, meaning Thailand's economic developments this year are not included. The new report also signals a shift in the US Treasury's evaluation framework, as the assessment of the Bank of Thailand's exchange rate policy is largely unchanged, recognising that foreign exchange intervention is intended to preserve orderly market conditions rather than secure a competitive trade advantage, said the think tank. The report provides substantially greater detail on the policy framework and instruments used to manage the exchange rate, suggesting the Treasury is emphasising the transparency of exchange rate policy, the rationale for intervention and the implementation of policy tools, rather than focusing solely on exchange rate movements. The document also broadens its discussion of Thailand's capital flow management and regulatory measures. Instead of referring only to general policy principles, the report identifies specific measures, including raising the threshold for mandatory repatriation of foreign income by residents from US$1 million to $10 million, prohibiting domestic financial institutions from conducting non-deliverable forward transactions with non-residents, and strengthening oversight of digital platform-based gold trading and reporting requirements for large gold transactions. While the report does not suggest these measures are intended to create an exchange rate advantage, K-Research said their inclusion indicates the US Treasury is widening its scrutiny beyond direct foreign exchange intervention to encompass a broader range of policy tools that could influence exchange rates and cross-border capital flows. "The US Treasury no longer focuses solely on whether authorities intervene in the foreign exchange market," noted the research house. "Instead, it is placing greater emphasis on the transparency of exchange rate policy, the rationale for intervention, and the policy tools and measures that could influence exchange rates and capital flows." Looking ahead, K-Research said Thailand has a strong chance of being removed from the Currency Monitoring List if it continues to meet no more than one of the three criteria. The think tank expects the Treasury's future assessments to extend beyond foreign exchange intervention to include capital flow management measures, regulatory policies and other instruments that could affect exchange rates, capital flows and the functioning of the foreign exchange market.