The baht depreciated to its weakest level in four years yesterday, but a senior Bank of Thailand official said it is expected to move within its current range at least until the new year.
Central bank spokeswoman Roong Mallikamas said the movement is in line with thin trading volume in the currency markets during the year-end along with fragile market sentiment, making it more volatile than usual.
It cannot be predicted whether the weakening baht is only a short-term occurrence since the US dollar is projected to gain, depreciating regional currencies, she said.
Mrs Roong said external factors are at play.
Notable among them is the US Federal Reserve's announcement it will begin tapering its monetary stimulus programme next month.
But the baht has depreciated faster than other regional currencies.
This reflects investors' concerns about the ongoing domestic political turmoil, said Mrs Roong.
The baht slipped to 32.70/74 against the dollar yesterday after briefly hitting a trough at 32.68/75 from 32.61/64 last Friday.
The weakening is being put down to political concerns about the Feb 2 election after the Democrat Party announced it will boycott it.
She predicts greater baht volatility in the year to come compared with 2013, and while the central bank is allowing market mechanisms to determine the baht's value, it is ready to move if the baht fluctuates further.
The Bank of Thailand is monitoring the potential increase of the US government debt ceiling closely, but its concerns have eased as the Democrats and Republicans appear to have reached an agreement on two years of budget disbursement, said Mrs Roong.