Guidelines for Dealing with Thai Baht Volatility in Industrial
Businesses
PASITHPHOL TEMRITIKULCHAI*, THANIN SILPCHARU, SUNEE WATTANAKOMOL
Faculty of Business Administration,
King Mongkut’s University of Technology North Bangkok,
1518 Pracharat 1 Road,Wongsawang, Bangsue, Bangkok 10800,
THAILAND
*Corresponding Author
Abstract: - Since Thailand switched the exchange rate to a floating system in 1997, Thai industries engaged in
import and export activities have experienced profits and losses due to fluctuating exchange rates continuously. The
objective of this research was to investigate strategies for managing the volatility of the Thai baht in the
industrial sector and to develop a structural equation model based on these findings. The study employed a
combination of qualitative and quantitative approaches. In-depth interviews were conducted with 9 experts to
develop the quantitative research tools, and a group discussion involving 11 experts was held to establish a
consensus on the study's model. As for the quantitative study, the data were collected from 500 industrial
business executives awarded PRIME MINISTER'S EXPORT AWARD, using the developed questionnaires.
Descriptive, referential, and multiple statistics were employed to analyze the data. The study revealed that 4 major
guideline areas for handling the volatility of the baht in the industrial sector were found, prioritized as follows:
risk control (𝑥 = 4.36), resource-centered (𝑥 = 4.34), analysis of the environment (𝑥 = 4.31), and innovation and
technology (𝑥 = 4.30) respectively. The most important guideline item in each area was: always have the policy to
review profit and loss from exchange rates, select personnel with financial and language skills to analyze and
forecast the volatility of the baht, continuously analyze the GDP of the major currency country, connect the
demand for products to digital technology and corporate partners, and respectively. As for the hypothesis testing
results, it was found that small and medium-sized businesses, and large businesses differently prioritized
guidelines to cope with baht volatility in the industrial sector at the statistical significance level of 0.05. The
analysis of the developed structural equation model revealed that the evaluation criteria were consistent with the
empirical data with its Chi-square Probability, the Relative Chi-square, Goodness of Fit Index, and the Root Mean
Square Error of Approximation of 0.055, 1.148, 0.964, and 0.017, respectively.
Key-Words: - Structural Equation Model, Currency Volatility, Exchange Rate, Industrial Business Risk Control
Received: May 29, 2023. Revised: August 14, 2023. Accepted: September 5, 2023. Published: September 11, 2023.
1 Introduction
Since 2019, the baht has appreciated about 5
percent against the US dollar, resulting from both
external and beyond control factors, especially the
change in the direction of monetary policy by the
Federal Reserve and the trade war between China
and the United States. Due to the mentioned
situations, efforts have been made to reduce the
importance of using the US dollar in the world
market, [1].
Apart from those factors mentioned above, four
main factors have been found to cause the Thai
baht’s appreciation current account surplus, large
foreign currency inflow, political stability, and the
increase of the Thai weight index by MSCI. As for
the surplus factor, Thailand had a current account
surplus of 12 billion US dollars, and since 2019 the
current account surplus has increased up to 29
billion US dollars, causing the appreciation of the
Thai baht. Regarding the foreign currency inflow, it
was found that Thailand has had a large inflow of
foreign currency to invest in the stock market and
bond market. Regarding political stability, after
having an elected democratic government, Thai
politics became more stable, resulting in many
funds being invested in Thailand. The last factor,
MSCI has increased the weight index of Thailand,
and foreign investment fund had increased their
investment in the stock market, [1].
Consideration of the currency fluctuation can
be reflected in the country's competitiveness in
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Pasithphol Temritikulchai,
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E-ISSN: 2224-2899
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trade. Calculating the real effective exchange rate
index (REER) shows the currency value compared
with other currency values. When the REER is
higher, the prices of Thai exports will increase and
make Thai products less competitive (Bank of
Thailand, 2019). Incidentally, a study on REER for
the past 5 years was conducted by the Bank of
Thailand. It was found that an appreciation of
REER by 1% would cause Thailand's gross product
(GDP) to decrease by about 0.02% in 1 year as
shown in Fig. 1.
According to Fig. 1, in comparison with
Thailand's major competitors, the Thai REER index
was at a higher level. When looking at the REER
from the weakest point to the strongest point during
2016-2020, the baht fluctuated by 12.36 units and
was appreciated higher than other competitors in
2020, meaning that the baht has appreciated more
than the currency of Thailand's major competitors.
As a result, Thai products decrease in competition
over competitors in the region. On the other hand,
if the REER index is lower compared to other
competing countries, it will result in Thailand
having an advantage in trade because importing
countries can perceive cheaper costs of the
products.
In taking into consideration the currency
volatility between the strongest exchange rate and
the weakest exchange rate in Fig. 2, the volatility of
Thailand is the highest of all countries compared.
The exchange rate of the baht against the US dollar
fluctuated as much as 16.6% during the 5-year
period from 2016-2020.
When ordering the average inter-quarter
volatility of various currencies in Southeast Asia,
Thailand’s average inter-quarter volatility rate
ranked 4th as shown in Fig. 3.
Fig. 1: Real Effective Exchange Rate Index, [1]
Fig. 2: Currency volatility of major competitors in Southeast Asia region during the year 2016-2020, [2]
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Fig. 3: Average volatility during the quarter, years 2016-2020
The above issues indicate that Thai industrial
businesses are affected when exchange rates
fluctuate. Researchers found that small to medium
industrial businesses had more effect on their
financial statements compared to large industrial
businesses. Researchers aim to find relevant
components that large industrial businesses use to
handle their operations during the volatility of the
baht. With these relevant components, the
researcher uses them to construct guidelines for
Thai entrepreneurs to increase their ability to
analyze the direction of the currency, how to handle
currency fluctuation, and resulting in improved
business competitiveness.
1.1 Research objectives
(1) To study the components of guidelines for
coping with the volatility of the baht in the
industrial sector
(2) To develop a structural equation model for
handling the volatility of the baht in the
industrial sector.
2 Literature Review
2.1 Volatility
Volatility is the change in the performance of
investment over time. It can be calculated by
measuring the fluctuation of the return of investing
in securities or the price of a particular type. The
greater the volatility, the higher the risk of the asset.
How to measure volatility can be made through
various statistical tools. Standard deviation and
average true range are popular statistical tools. The
volatility measure indicates how much the price
moves beyond normal bounds, depending on the
tool, [3].
2.2 Concepts and Theories Related to
Environmental Analysis
The concept of environmental analysis refers to
collecting information on how the external
environment affects currency fluctuations. It can be
useful in forecasting direction and used as a
preparation measure to cope with currency
fluctuations in the industrial sector effectively.
The study, [4], said that the factors that affect
exchange rates are interest rates, economic growth,
and demand of currency. In addition, when supply
and demand do not match, there will be fluctuation
in the exchange rate.
In, [5], the author states that the exchange rate is
determined by the comparative price level and
adjustments in exchange rates due to differences
between changes in price levels.
In, [6], the authors investigated the need to use
critical data to analyze and gain a competitive
advantage in an intensely competitive marketplace.
Four aspects of external situations, namely, politics,
economic situations, social conditions, and
technological change were analyzed. It was found
that the economic situation and the social condition
were extremely important for customers’ purchasing
power analysis.
2.3 Concepts and Theories Related to
Resource Centric
At present, management and administration is an
important process that every organization, society,
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and nation will coordinate as a network, and use
limited resources to enable the organization to move
towards the desired goals efficiently.
According to, [7], to manage and administer
work effectively as specified, executives or
managers must rely on systematic management
suitable for the environment of the organization.
The resource-centered approach is the organization's
management based on internal factors. When
industrial business executives understand the
strengths and the weaknesses of the organization,
they will be able to create appropriate strategies for
planning and responding to various events to reduce
negative impacts effectively.
In, [8], the authors describe two issues of
financial management: 1. Financial management in
all businesses, either large or small, can be divided
into 3 forms according to the nature of the business,
namely, 1) sole proprietorship, 2) partnership, and
3) the owner holds approximately 80 percent of the
business. 2. The components of capital consist of
different types of debt, including preferred stock and
common stock.
In, [9], the authors define human capital as a
human factor in an organization that is related to
knowledge, expertise, skills, and abilities that create
good products for the organization. Human capital is
an intangible asset but can increase in value through
investment in development. Human resource
development will result in people becoming
valuable assets to the organization.
Moreover, [10], discuss resource-based theory
and the relationship between organizational
resources and organizational performance. They
state that resources are assets that enable
organizations to think and execute strategies. They
add that the success of the organization depends
very much on the intrinsic qualities of the
organization.
Similarly, [11], reveals that medium and large
industrial businesses employing large numbers can
build effective work teams more easily than small
industrial businesses. A focus on team building will
help businesses have employees work more, so the
owner and the manager’s concepts and policies can
be carried on. The employees will become a
workforce that can help the business grow.
2.4 Concepts and Theories Related to
Innovation and Technology
Innovation refers to creating new things by
developing the existing ones. This concept
originated in the early 20th century with a focus on
creativity, research, and development in science and
technology, bringing new ideas, or utilizing the
existing ones in new ways to create economic
benefits. Innovation is closely related to invention.
The invention is the discovery of new things; new
knowledge that no one has invented or discovered
before. Such new knowledge or discoveries can be
applied in the form of technology or other different
forms. New inventions as well as those developed
from the existing ones are so important that
academics and practitioners should realize their
values and make them more modern and effective as
it will stimulate further research and sustainable
supply chain innovations.
The study, [12], states that the adoption of
innovation will help to achieve good, efficient, and
effective work. In terms of engineering, it can
extend processing techniques. The most important
goal of the company's innovation strategy is to
improve the quality of service and products, to
increase market share, and to reduce production
costs.
In, [13], the authors mention that technological
advances have resulted in changes in many areas of
organizational management, including building
monitoring and control systems using real-time
technology. This will increase administrative
efficiency and reduce costs.
In, [14], the authors add that improving process
quality such as reducing defects is an innovation
process that aims to improve quality or a so-called
“Quality Process Innovation.” It meets the need for
better coordination.
In, [15], the author claims that innovation can
create new markets and manage existing markets,
and it can also use new technologies or existing
technologies which may lead to more innovations.
In, [16], the authors investigated the major
problems and obstacles of online trading business
operators. They found that the problems and
obstacles that needed an urgent solution were
unfavorable state regulations on electronic
transactions which caused the operators’ inability to
use modern technology conveniently, resulting in a
slow adjustment to use technology for business
development.
2.5 Concepts and Theories Related to Risk
Control
Risk refers to an opportunity/event that is uncertain
or causes the current plan or action to fail to achieve
the set objectives, eventually resulting in impact or
damage to the organization, such impacts can affect
both monetary and the image and reputation of the
organization. Enterprise risk management is a
process performed by the board of directors,
executives, and all personnel in the organization to
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formulate and implement strategies. The risk
management process is designed to identify events
that may occur and have an impact on the
organization, and able to manage those risks within
the acceptable level to gain reasonable assurance in
achieving the objectives set by the organization,
[17].
The study, [18], classified the types of exchange
rate risks into 3 categories: namely, transaction risk,
translation risk, and economic risk. She proposed 8
ways to manage foreign exchange risk as follows: 1)
Transfer currency risk to other companies, 2)
Netting, 3) Diversification, 4) Forward contract, 5)
Futures contract, 6) Options to buy or sell foreign
currency, 7) Hedges by using the money market,
and 8) Foreign exchange contracts (Swap).
3 Methodology
3.1 Synthesis of Components
Based on the mentioned concepts and theories, four
guideline components for dealing with the volatility
of the baht in the industrial sector can be induced:
environmental analysis, resource centric, innovation
and technology, and risk control.
3.2 Population and Samples
The quantitative part of the study was conducted
using a survey technique. The population used in
this research was executives responsible for
accounting and finance at the manager level upward
from small, medium, and large enterprises awarded
PRIME MINISTER'S EXPORT AWARD during
the year 1992-2020, and the industry award during
the year 1993-2021. According to the Ministerial
Regulations on the Characteristics of Small and
Medium Enterprises B.E. 2562, the enterprises
classified as small and medium enterprises must
have a total income of no more than 500 million
baht a year, while the large ones earn more than 500
million baht. The suitable size of the sample groups
as specified by, [19], was 500 and so 500 executives
with the specified characteristics were obtained and
were sub-divided into 250 from small and medium
businesses, and another 250 from the large ones.
3.3 Research Tools
The tool used in this study was a 5-point rating scale
questionnaire constructed according to the Likert
method, [19]. The created questionnaire draft was
assessed by 5 experts to determine the quality of the
tool. It was found that the calculated Index of Item-
Objective Congruence (IOC) ranged from 0.60-1.00,
where the appropriate value is 0.50 or more, [20].
Then the questionnaire was tried out with 30
informants with similar characteristics to the studied
population. The purpose of the trial was to find its
values of discrimination, standard deviation,
correlation, and reliability. The calculation showed
that the discrimination of the questionnaire varied
from 0.45-3.17 while its reliability was 0.99 greater
than the normal criteria of 0.80. It was, therefore,
considered as a good and appropriate tool for the
study, [21]. Then the constructed questionnaire was
used to collect the data from the set sample group.
3.4 Data Analysis
Researchers use both descriptive and referential
statistics to analyze the data via SPSS software
while a structural equation model was developed
with AMOS. The analyzed data shows that there are
differences in concern for the items between large
enterprises and small and medium enterprises.
Lastly, the researcher uses AMOS to finalize the
model to verify the relevance of components and
their observation, the data-model fit was assessed
using the following four criteria, included: 1) Chi-
squared Probability > 0.05, 2) Relative Chi-squared
< 2.00, 3) Goodness of Fit Index > 0.90, and 4) Root
Mean Square Error of Approximation < 0.08, [22].
4 Results
(1) The analysis of the Environmental Analysis
component found that the entrepreneurs realized
the importance of analyzing the environment at
a high level with a mean of 4.31. When
considering each aspect, it found that
continuous analyzing of the GDP of the major
currency countries” was of the highest level
with an average of 4.60.
(2) The analysis of Resource Centric component
found that entrepreneurs realized the importance
of resource-centric at a high level with a mean
of 4.34. When considering each aspect, it was
found that the “selection of personnel with
knowledge and skills in finance and language to
analyze and forecast the volatility of the baht”
gained the highest level of importance with a
mean of 4.50.
(3) The analysis of the Innovation and Technology
component found that entrepreneurs realized the
importance of innovation and technology, as a
whole, at a high level with a mean of 4.30.
When considering each aspect, it was found that
“Digitally sharing of demand for products to
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partners” gained the highest level of importance
with an average of 4.51.
(4) The analysis of Risk Control components found
that entrepreneurs realized the importance of
risk control, as a whole, at a high level with an
average of 4.36. When considering each aspect,
it was found that “Set policy to review profit
and loss from exchange rates regularly” with the
mean of 4.56 was: always provide a policy to
review profit and loss from exchange rates.
Table 1. Comparison of the importance level of the guidelines for dealing with Thai baht volatility in the
industrial sector, categorized by industrial business sizes, as a whole and by aspect
Guidelines for dealing with Thai baht volatility in the industrial sector
t-Value
P-Value
The importance level of the components as a whole
-3.78
0.00*
Environmental Analysis
-5.38
0.00*
Resource Centric
-3.65
0.00*
Innovation and Technology
-3.36
0.00*
Risk Control
-1.89
0.06
*The statistical significance level of 0.05
Table 1 shows that the importance level of the
overall guideline components for dealing with Thai
baht volatility in the industrial sector, categorized by
industrial business sizes, were different at the
statistical significance level of 0.05.
As for the development of a structural equation
model (SEM) on guidelines for coping with the
volatility of the baht in the industrial sector,
Multivariate Statistics analysis and advanced
statistical analysis software called AMOS were used
to analyze the data. The model and the latent
variables were adjusted until they were all
consistent with the empirical data and the four
criteria; namely, Chi-square Probability: CMIN-p,
Relative Chi-square: CMIN/DF, Goodness of Fit
Index: GFI, and Root Mean Square Error of
Approximation: RMSEA). The results of the
analysis of the structural equation model are as
follows:
(5) The analysis of the study concerning objective
1, that is, to study the components of the
approaches to deal with the volatility of the
baht in the industrial sector, revealed that there
were 4 major components: namely,
environmental analysis, resource centric,
innovation and technology, and risk control.
All four were derived from reviewing relevant
literature. It appeared that they were consistent
with the empirical data with p-value = 0.055,
CMIN/DF = 1.148, GFI = 0.954, and RMSEA
= 0.017, all of which passed the specified
criteria with the statistical significance level of
0.001 as shown in Table 2 and Fig. 4.
Fig. 4 showed the results of the analysis of the
overall influence, the direct and indirect influences
of the structural equation model on guidelines to
deal with the volatility of the baht in the industrial
sector in the standardized estimate mode after the
model was improved. It was found that the highest
overall influence was on the environmental analysis,
and it affected the overall influence on innovation
and technology with a standardized regression
weight of 0.92.
.
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Table 2. Observed variables for countermeasures against baht volatility in the industrial sector.
Guidelines for Dealing with Thai Baht Volatility in Industrial Businesses
Environmental Analysis
Continuously study and follow up government policies, especially on the economy and
finance.
Analyze political situations that can affect the volatility of the baht.
Continuously study innovative technology in currency management to be competent and up-
to-date.
Analyze risk factors arising from external threats such as epidemics, disasters, and wars.
Keep track of interest rate, policy, and economy of partner countries and owner countries of
currency to be exchanged
Continuously analyze the inflation rate of the country's major currencies.
Analyze treasury reserve of trading partner currency.
Resource Centric
Select specialized employee with good financial and language skills to analyze and forecast
the volatility of the baht.
Reserve funding sources to cope with currency fluctuations.
Setup a collaboration team between sales and cost to continue evaluating appropriate selling
prices when there is a high degree of volatility.
Choose leaders with vision and quick decisions to handle volatile situations.
Determine the properties of raw materials that can be easily substituted and used in
conjunction with other products in the organization.
Innovation and Technology
Adopt data management software to support real-time data analysis.
Utilize enterprise resource management (ERP) software to analyze company conditions in a
timely manner.
Use digital currency to receive and pay for goods to cope with currency fluctuations
Use big data to forecast the direction of the currency.
Promote links and exchange of up-to-date information both inside and outside the
organization.
Use real time technology to track data and analyze currency direction.
Risk Control
Analyze risks related to the direction of baht fluctuations.
Continuously Review financial ratios.
Review business' foreign currency requirements ahead of the maturity date so that method to
hedge against currency fluctuations can be chosen.
Set a policy to review profit and loss from exchange rates regularly.
Use forward contract tools.
Prepare a manual for money management in the organization in accordance with the goals in
a currency volatility situation
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Fig. 4: Structural equation model for dealing with baht volatility in the industrial sector in standardized estimate
mode after model improvement
5 Discussion and Conclusion
The research results can be concluded by using
Descriptive Analysis and Structural Equation
Model, and the result can be concluded as follows:
(1) According to the research results, when
comparing the components of the studied guidelines
as a whole and in 3 aspects; namely, environmental
analysis, innovation and technology, and resource
centric, it was found that large industrial enterprises
placed the importance on them differently from
those small and medium ones. This was confirmed
with a statistical significance level of 0.05.
However, no differences were found in the risk
control component. This indicated that larger
enterprises realized the importance of guidelines to
deal with volatility more than small and medium
ones. This finding was in accordance with the study
by, [23], who investigated success factors of the
development of large enterprises for future change.
They stated that a significant factor in contemporary
organization design to support changes from the
unpredictable business environment was that there
must always be a context to monitor and assess
external factors continuously and regularly. The
finding was also consistent with that of, [24], who
stated that the cost-benefit assessment approach of
large-scale projects required an integrated
environmental assessment and monitoring model.
This would provide executives and related parties
with perspective in planning and making decisions
that created the value of perfect and sustainable
results. Furthermore, the research by, [25], also
addressed a model for assessing the variable
exchange rates of Nigerian small and medium-sized
agricultural enterprises from another perspective
that although the country had a floating exchange
rate policy, most small and medium enterprises still
relied on management methods under fixed
exchange rate data, taking into account and basing
on the ease and speed of management for decision-
making. The finding was also consistent with the
study by, [26], in that the ability of large companies
to manage the risk of currency volatility was greater
while, [27], found that small and medium
enterprises did not like to buy and sell derivatives to
reduce currency risk.
(2) With respect to the results of one
hypothesis test, it was found that the environmental
analysis element had the highest direct influence on
the innovation and technology component with a
standardized regression weight of 0.92. This
empirically showed that, for organizations to be
resilient to currency volatility, it was necessary for
them to analyze the factors that influenced
organizational transformation drive, and to create
innovations in terms of products or management
innovation all of which would result in changes in
technology suitable for any particular situation,
competitive advantages, and ability to use
technology or management innovation to reduce the
impact of currency fluctuation. This finding was
consistent with that of, [28], which stated that
technology collaboration (TCN) in terms of the
macroeconomic cycle, industry life cycle, and the
age of the company, affected the innovation
efficiency and success of small and medium
enterprises (SMEs). It was also in line with the
study, [29], in that when the integration of
information technology, creativity, innovation, and
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communication was applied, they not only boosted
convenience and speed but also helped the
management of the work and human system within
the organization be more effective. Moreover, [30],
mentioned in their study that due to rapid changes in
technology, especially automation technology and
modern machinery technology, industrial businesses
focusing on speed and accuracy would naturally be
pressured to adapt and invest in technology to
enhance production efficiency.
(3) With regard to another hypothesis test, it
was found that the environmental analysis
component directly influenced the resource centric
component the most with the standardized
regression weight) of 0.87. This empirically showed
that an organization had to find the internal
strengths or strategic resources and analyze the
external environment to create advantages to know
the obstacles that the organization encountered. This
would enable the organization to formulate strategic
plans and provide personnel, knowledge,
enhancement of administrative processes, raw
material management, and investment in modern
machinery suitable for business and economic
conditions. In, [31], the authors investigated
companies listed on the Pakistan Stock Exchange
and found that factors such as GDP growth, and
corporate tax rates, were related to financial
decisions of business organizations. In, [32], this
study focused on the analysis of internal and
external factors of Honda Motor Company, Japan. It
found that changes in currency values and interest
rates were important variables that affected cash
flow. Normally, Honda traded derivatives to reduce
volatility and to create a strategy for managing
liquidity in converting assets into cash effectively.
Both studies were in line with the present study.
(4) The component of risk control in the study
entitled guidelines for dealing with the volatility of
the baht in the industrial sector gained the highest
mean of 4.36. This reflected the importance of risk
control management, which was an important factor
in preparing for currency fluctuation handling.
Having a good risk management system would
result in smooth business management. Results of
organizations’ risk studies could be used to create
organizational strategic plans that would allow the
organization to go through the crisis with minimal
impact. This was in line with a study by, [33], on
having a strong enterprise risk management (ERM)
system. They found that good enterprise risk
management could create corporate strategies. An
organization with a good ERM system would result
in good business performance and reduce the
likelihood of business failure. In addition, many
studies compared the performance of companies
with and without exchange rate risk, such as the one
conducted by, [34], who found that hedged
companies Increased profitability, resulting in a
reduction in the chances of business bankruptcy. In
addition, studies by, [35] [36], [37], [38], also stated
in the same direction that firms with hedged
derivatives had higher enterprise values than those
without hedging policies. This was so because
financial instruments could help reduce the risk of
fluctuating exchange rates, the negative impact of
investment, and the likelihood of a financial crisis,
but increase the economic value of the business.
(5) As it was found in the study on guidelines
for coping with the volatility of the baht in the
industrial sector the continuous analysis of major
currency countries’ GDP gained the highest
importance rate with a mean of 4.60, the finding
supported that GDP was the most important to the
country economy. In the economic system, there
must be a circulation of income and expenditures of
households, business sectors, and governments
domestically and internationally. This means that
people have jobs and income to spend on goods and
services, and to pay taxes to the government. In
addition, if people have some money left, they can
save it in financial institutions, or invest in
businesses or the stock market as well as in various
mutual funds. GDP is considered an indicator of the
growth of the domestic economy each year and how
much it has grown or decreased. GDP, however,
remains one of the most important indicators that
organizations should look at when examining the
fundamental health of the economy. In addition,
forecasting the exchange rate can be used to analyze
the GDP direction of the currency. This is consistent
with the study on predicting exchange rates using
GDP as a variable by, [39], who employed the
ANFIS method for forecasting exchange rates. They
collected GDP and currency data of 36 countries
and found that between the rises and falls in
exchange rates, the GDP data of those countries was
very useful for comparing and predicting the
exchange rate. The finding was also in accordance
with the study by, [40], who investigated the effects
and relations of the exchange rate of the USD and
the Rupee. They observed and collected data on the
effects of macroeconomic variables such as GDP,
interest rates, inflation, and exchange rates against
the US dollar using annual data from years 1996 to
2014. They designated exchange rate fluctuations as
dependent variables and found that GDP and
exchange rate were related to each other. This
supported the idea that the GDP variable can be
used to forecast exchange rates.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.169
Pasithphol Temritikulchai,
Thanin Silpcharu, Sunee Wattanakomol
E-ISSN: 2224-2899
1945
Volume 20, 2023
6 Suggestions
(1) Bank of Thailand should place importance
on monitoring and supervising currency fluctuations
by adhering to the harmonization of monetary and
fiscal policies and preparing quarterly reports on
monetary policy performance regarding: 1. Recent
monetary policy performance, 2. Guidelines for the
next phase of monetary policy, and 3. Forecasts of
future economic conditions to notify the Minister of
Finance. It should quarterly disseminate the
monetary policy report and future monetary policy
in general. This will increase awareness of the
private sector to understand the MPC's monetary
policy, which will be useful for future currency
forecasting, and increase transparency and the
efficiency of monetary policy in the future.
(2) The Federation of Thai Industries should
promote and support the study of information on
currency fluctuations as well as provision of training
to educate Thai industrial business operators about
the value of a currency and how to reduce the risk of
currency fluctuation. It should also give advice and
recommendations to the government in issuing
monetary and fiscal policies concerning the
exchange rate of the baht to be consistent with the
Thai economy.
(3) The industrial business sector should
focus on monitoring the environment in all aspects,
including political, economic, social, and
technological factors, to be able to accurately
forecast the direction of the Baht. The appropriate
risk management tools should be chosen.
(4) The industrial business sector should set
indicators for monitoring, analyzing, and
determining the interval for continuous monitoring
of indicators. Information from indicators should be
used to accurately predict the direction of the baht.
(5) The industrial sector should designate
work positions or units to take care of currency risk
management, keep track and analyze indicators, and
be able to make decisions in implementing a forex
maintenance plan, including coordinating strategy
planning so that organizations can get the most out
of currency fluctuations.
(6) For future improvement, if there will be
research on a similar study comparing the
component concerned with dealing with bath
volatility of Small-Medium Enterprise and Large
Enterprise, the researcher suggests studying
specifically based on the business sector.
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Pasithphol Temritikulchai,
Thanin Silpcharu, Sunee Wattanakomol
E-ISSN: 2224-2899
1946
Volume 20, 2023
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Pasithphol Temritikulchai,
Thanin Silpcharu, Sunee Wattanakomol
E-ISSN: 2224-2899
1947
Volume 20, 2023
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
The authors equally contributed in the present
research, at all stages from the formulation of the
problem to the final findings and solution.
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
No funding was received for conducting this study.
Conflict of Interest
The authors have no conflict of interest to declare.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
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WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.169
Pasithphol Temritikulchai,
Thanin Silpcharu, Sunee Wattanakomol
E-ISSN: 2224-2899
1948
Volume 20, 2023