The Bank of Thailand has attempted to allay concerns about its accumulated losses by clarifying that they stem from its financial operations to mitigate baht appreciation through foreign currency purchases.
"The central bank has purchased foreign currencies to prevent the baht from appreciating too quickly, which would have an adverse effect on Thailand's fragile economic recovery," said Chantavarn Sucharitakul, assistant governor for corporate strategy and relations group.
"Once such purchases are made, the central bank prudently manages the country's foreign reserves by taking long-term interest into account and disclosing outstanding foreign reserves data each week."
An increase in Thailand's foreign reserves is attributed to substantial foreign capital inflows, causing the country's current account to have recorded a hefty surplus in recent years and investment flows from foreigners, she said.
"Whenever the baht appreciates, this causes a valuation or accounting loss. On the contrary, foreign reserves quoted in baht record a valuation or accounting gain when the baht depreciates," said Mrs Chantavarn.
"Usually a currency's value strengthens when economic conditions improve and the central bank often records a valuation loss.
"But if the economy is not healthy, the currency depreciates, resulting in a valuation gain for the central bank."
Foreign reserves totalled US$215.4 billion baht (6.8 trillion baht) as of April 27. Thailand's current account surplus stood at $17.1 billion in the first quarter, while last year's current account surplus was logged at $48.1 billion.
The value of foreign reserves in baht terms will fluctuate according to foreign exchange rate, while a valuation loss does not mean that the central bank's foreign reserve value is impaired or indicate problems related to the country's economic stability, said Mrs Chantavarn.
The Bank of Thailand's accumulated losses widened to 879.4 billion baht as of April 19. That was up from losses of 725 billion at the end of 2016 and an increase from the 635 billion and 573 billion recorded in 2015 and 2014, respectively.
The central bank posted total revenue of 78 billion baht for 2016, while total expenses came in at 158 billion, the bank said in its annual report. The net loss in 2015 stood at 89.1 billion baht.
Meanwhile, in a Facebook post, former Finance Minister Thirachai Phuvanatnaranubala said Thailand is not yet ready to let the baht move freely.