The baht plunged against the US dollar on Friday, primarily influenced by external factors, with seasonal fluctuations expected to exert continued pressure on the local currency, potentially weakening to 37 per dollar during the second quarter.
The baht opened on Friday at 36.33 per dollar, a significant decrease from Thursday's close of 36.05 per dollar.
The Swiss National Bank surprised some Thursday by reducing its policy rate by 25 basis points, making it the first European central bank to do so. The move devalued the Swiss franc against the dollar.
Members of the Bank of England unanimously voted to maintain its policy rate.
The US Federal Reserve is expected to cut its policy rate three times this year, starting in the second half. These moves signal a dovish monetary policy globally, according to Siam Commercial Bank's financial markets unit.
Kobsidthi Silpachai, head of capital market research at Kasikornbank (KBank), said the Bank of Thailand is unlikely to adjust its policy rate before the Fed, as doing so could lead to capital outflows and further depreciation of the baht.
KBank predicts the Bank of Thailand will commence its rate reduction in June, in line with the Fed, potentially becoming the first central bank in the region to do so.
The Bank of Thailand is expected to lower its policy rate twice by 25 basis points each, ending the year at 2%.
On Wednesday, the Fed decided to maintain its policy rate within a range of 5.25% to 5.5%.
Market analysts predict the Fed will trim its rate three times over the course of this year, down from earlier projections of 4-7 reductions.
This adjustment is expected to narrow the interest rate differential between the US and Thailand, putting further pressure on the baht, said Mr Kobsidthi.
Seasonal factors such as dividend payments to foreign investors are also expected to contribute to the baht's depreciation in the second quarter, he said.
SET-listed companies are projected to distribute dividends totalling roughly 81 billion baht to foreign investors from April to May, with the largest portion, 21.4 billion baht, scheduled for April 22-26.
"Seasonal volatility during dividend payments could potentially drive the baht to weaken to 37 per dollar. Importers and exporters should prepare for foreign exchange hedging," said Mr Kobsidthi.
According to KBank, the baht is expected to strengthen against the dollar in the second half of the year, supported by improvements in the economy and seasonal factors related to tourism. KBank forecasts the baht to appreciate to 35.2 per dollar by the end of the year.