Finance Minister Pichai to meet Bank of Thailand chief before flying to Washington for crisis talks. Focus will be on US bond holdings, currency risks and recession fears as Thailand braces for fallout from Trump tariffs and global economic shocks.
Minister of Finance Pichai Chunhavajira is to meet Governor Sethaput Suthiwartnarueput of the Bank of Thailand in preparation for next week’s talks with US negotiators in Washington DC. The talks will take place before the Thai delegation flies out on Thursday. The importance of these discussions goes to the heart of how serious this economic threat is to Thailand. In particular, Mr. Pichai wants to learn more about Thailand’s investments in US Treasuries as part of its foreign reserves.
Deputy Prime Minister and Minister of Finance Pichai Chunhavajira on Tuesday said he has invited Bank of Thailand Governor Mr Sethaput for talks ahead of next week’s crucial negotiations in Washington DC. The central bank boss is expected to meet with Mr. Pichai and the negotiating team either on Tuesday or Wednesday.
At length, Mr. Pichai aims to learn what the central bank is planning in the wake of President Donald Trump’s sweeping new tariff regime. Following the March 28th earthquake that rocked Bangkok, Trump’s April 2nd announcement is now seen as an economic earthquake.
In short, today’s world and geopolitics have significantly shifted. Particularly, Mr. Pichai would like to understand what plans the bank has, including measures to protect the financial system. In addition, he is looking for potential moves that could aid already hard-pressed exporters.
Pichai seeks clarity on currency trends and Thai monetary response after White House trade measures
In particular, Minister Pichai is also trying to grasp Thailand’s future monetary policy and potential currency movements. Shortly after the April 2nd announcement from the White House, Bank of Thailand Assistant Governor for Corporate Relations Ms. Chanawadee Chaianan announced a review of market conditions. She said the bank was particularly reviewing assets affecting Thailand’s financial stability.
“The BOT is assessing the impact on the Thai economy, considering all factors and channels through which these measures will affect the economic sector. The BOT will closely monitor the situation and is prepared to manage market volatility, particularly to minimise impacts on businesses and overall financial stability,” Ms. Chanawadee explained.
Significantly, on Tuesday, Mr. Pichai mentioned he wants to discuss Thailand’s central bank investment in US government bonds. Presently, Thailand’s central bank holds significant US Treasury holdings. Indeed, this is part of the country’s $216.711 billion in foreign reserves as of February 2025. Additionally, the central bank holds $21.558 billion in gold reserves.
Concerns grow over Thai exposure to US assets as central bank monitors fallout from trade conflict
These holdings help ensure financial stability in Thailand, particularly supporting international trade financing through Thailand and stabilising the baht. The bank does not publicly disclose its US Treasury holdings.
Notably, following the escalating US-China trade war, the Chinese government has begun cautiously selling US Treasuries. However, it is not rushing to divest all holdings. China holds approximately $1.3 trillion in US assets, including Treasuries and equities, as of December 2024.
This includes $759 billion specifically in US Treasuries.
These investments help maintain the strength of the US dollar and restrain the Chinese currency. Any large-scale divestment by China could weaken the dollar, leading to a rise in the yuan.
Of course, this could potentially diminish Chinese export competitiveness.
Meanwhile, the seriousness of the current situation was underscored by Pongnakorn Pochakorn from the Fiscal Policy Office on Tuesday. This is a unit under the Ministry of Finance. Mr. Pongnakorn warned that Thailand could already be entering a technical recession.
Thai economy faces recession risk as global slowdown and trade barriers hit exports and GDP outlook
The economist indicated that revised GDP forecasts would be presented on April 28th. In brief, it would reflect Thailand’s struggle with export barriers in its largest market. At the same time, the impact of a slowing global economy.
Just last week, Amnouypan Chawla, Chief Economist at CIMB Thai Bank, downgraded Thailand’s 2023 growth projection to 1.5%. He also criticised Thailand’s previously declared export growth driven by Chinese goods as ‘Zero Dollar’ exports. Certainly, he questioned if Thailand truly benefits from its trade relationship with China.
In preparation for the 16–17 April meeting, the Ministry of Finance is expected to push for concrete steps in response to growing financial volatility. A key area of focus will be the sharp 36% tariffs introduced by Washington but temporarily paused just 13 hours later on April 9th.
Even the baseline 10% rate has added sudden pressure on Thai exports. Consequently, this fuels turbulence in domestic money and capital markets.
In the days following the initial April 2nd announcement, the baht depreciated against the dollar while safe-haven assets such as gold spiked. The Bank of Thailand has been tasked with tracking these fluctuations closely. In short, it must ensure they do not spiral into systemic risk.
Officials weigh regulatory easing as volatility and pressure mount on baht, banks and exporters
Officials say the Ministry hopes to better understand the Bank’s current position on liquidity management. At the same time, Thai officials wish to explore whether there is scope to ease certain regulatory conditions—especially to assist commercial banks and exporters.
Businesses with overseas exposure are expected to be particularly vulnerable. Indeed, some observers have speculated that monetary policy tools may need to be adjusted. At length, this all depends on how global sentiment evolves.
Concerns have also been raised about the longer-term implications of maintaining large positions in US assets—particularly US Treasuries—at a time of growing uncertainty. Though Thailand’s exact holdings remain undisclosed, officials say any reassessment of asset distribution would need to be calibrated.
For instance, it must take into account shifts in interest rate trends and currency risks. According to CEIC Data, Thailand’s foreign exchange reserves covered 7.9 months of imports in January 2025. Significantly, this provides a crucial cushion, but the new global financial landscape may require a fresh look at reserve composition.
Bank of Thailand to step up stress tests as risks rise from falling exports and capital outflows
At the same time, the Bank of Thailand is expected to continue stress-testing the domestic financial system. It is examining possible easing measures to maintain resilience. While liquidity remains sufficient at present, there are incoming challenges. Deteriorating export figures and capital outflows could trigger credit tightening later this year.
A coordinated response between the central bank and the Finance Ministry is seen as critical. The mission is to cushion the impact and offer targeted support.
Mr. Pongnakorn, in his remarks, warned that the Thai economy may already meet the technical definition of a recession. This comes following two quarters of contraction. He attributed the downturn not only to the US trade actions. For example, Thailand has been hit also by the ripple effects of the March earthquake in Myanmar. This has disrupted regional supply chains.
Undoubtedly, a previous 3% growth forecast made in January may now be revised down significantly, he said. After that comes a possible recalibration of Thailand’s medium-term fiscal strategy covering 2026 to 2029.
Finance Ministry prepares emergency credit as Pichai signals policy shift on debt and spending
Minister of Finance Pichai has already talked about raising the 70% public debt-to-GDP ceiling. This is set under the State Fiscal and Financial Disciplines Act 2018. In the final analysis, this appears to be preparation for GDP contraction, not growth.
Nonetheless, he is already being warned politically about this.
In anticipation of continued headwinds, the Ministry of Finance is said to be preparing emergency credit packages for affected sectors.
Thaksin does not rule out joining talks in the US as the Thai team finalises plans. They fly out on Thursday
These are to be routed through key state-owned banks. These include the Export-Import Bank of Thailand, the Government Housing Bank and the Bank for Agriculture and Agricultural Cooperatives, among others.
The talks this week are intended to deliver a unified framework before Mr. Pichai heads to Washington.
Starting on Monday, April 21st, Thailand will take part in high-stakes economic discussions involving multiple global counterparts.
As Thailand simultaneously faces internal and external shocks, government officials are under pressure. They must deliver a response plan that can stabilise the economy. The vista ahead appears to be one of prolonged turbulence.
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Further reading:
Thaksin does not rule out joining talks in US as Thai team finalises plans. They fly out on Thursday
Trump’s remaking of World trade, if it works, will force Thailand to decide between the US and China
US offers a 90-day tariff pause but Thailand must move faster as it already faces shaved GDP in 2025
PM addresses the nation in shock over last week’s earthquake and this week’s Trump tariff bombshell
Finance Minister to travel to US to import more US food and motorbikes while lowering Thai tariffs
Trump’s trade war coming down hard on Thailand despite reports of talk. Reciprocal tariffs days away
