The dollar depreciated against most currencies in 2024

The US dollar fell against most major currencies in 2024 as markets anticipated the first post-pandemic interest rate cut by the Federal Reserve.

Lower interest rates are hurting the dollar's attractiveness against other currencies, particularly those in higher-interest-rate economies, according to a Visual Capitalist analysis based on data from PinPoint Macro Analytics.

According to the quoted source, the largest known depreciation of the dollar this year was against the Thai baht (-11.5%), followed by the Polish zloty (-11.4%), the Malaysian ringgit (-11.3%) , the South African rank (-8.2%); British Pound (-8.1%), Swiss Franc (-7.6%), Australian Dollar (-6.6%), Swedish Krona (-6%), Singapore Dollar (-5.6%), New Zealand Dollar - Zealander (-4.6%). Against the single European currency (euro), the dollar has lost 4.4% this year, according to the source.

• BOT: Rising Thai baht hurts exporters and tourism

The significant appreciation of the Thai baht is hurting exporters and tourism spending, according to the Bank of Thailand (BOT), which adds that the country's currency is gaining ground amid a weaker dollar against stronger regional currencies such as the Japanese yuan and the Chinese yen.

According to Reuters, exports and tourism are the key drivers of Southeast Asia's second-largest economy, Thailand.

In this context, the central bank of Thailand decided yesterday, surprisingly, to cut the interest rate for the first time in the last four years, according to bangkokpost.com. The reduction, the first after May 2020, is 25 basis points, to 2.25%. The previous interest rate of 2.50% was a ten-year high, set in September 2023.

The BOT's next monetary policy meeting is scheduled for December 18.

The Thai government has been pressuring the central bank for months to cut borrowing costs to support the economy. Also, the ministers argued, inflation has been below the central bank's target range of 1-3% for several months.

Consumer prices in Thailand rose 0.35% in August 2024 from the same month in 2023, bringing the eight-month average to 0.15%, reflecting a contraction in the first quarter.

Thailand Chamber of Commerce President Sanan Angubolkul said on Oct. 9 that low interest rates on loans would help companies cope with high spending and the strong baht.

The local currency rose 14 percent in the third quarter, making the country's exports more expensive compared to competitors.

Thailand's central bank revised its growth forecast for 2024 up to 2.7 percent from 2.6 percent previously, but cut its 2025 forecast to 2.9 percent from 3 percent. The World Bank has estimated that Thailand's economy will grow by 2.4 percent this year and 3 percent next year.