Bangkok: Thailand’s Finance Ministry has pledged to work closely with the central bank to address the rapid appreciation of the baht, which has reached its strongest level in four years, raising concerns over its impact on exports and tourism.

Incoming Finance Minister Ekniti Nitithanprapas said the government would coordinate with the Bank of Thailand to monitor foreign capital inflows and gold trading, sectors that officials believe are contributing to the currency’s surge. “We will carefully examine these areas and take necessary steps to ensure stability,” Ekniti told reporters on Thursday.

The baht, which had risen about eight percent against the U.S. dollar so far this year, slightly retreated after the minister’s remarks, moving from 31.73 to 31.88 per dollar. Despite the dip, the currency remains one of Asia’s top performers, second only to the Taiwan dollar.

Deputy Finance Minister Vorapak Tanyawong warned that the baht could strengthen further as foreign investors continue to buy Thai bonds and stocks. He noted that while capital inflows indicate confidence in the Thai economy, excessive appreciation poses risks for the nation’s competitiveness.

One area drawing particular scrutiny is the gold trade. Government data showed Thailand’s gold exports surged by 82 percent in the first seven months of the year to 7.6 billion dollars, with shipments worth 2.1 billion dollars sent to Cambodia alone. Officials suggested that such unusual trading activity may be linked to speculative capital flows and are considering measures such as taxing gold transactions.

Thailand’s economy depends heavily on exports and tourism, both of which can be hurt when the baht becomes too strong. A firmer currency makes Thai goods more expensive for foreign buyers and raises costs for international visitors.

The government’s announcement comes ahead of the October 1 handover at the central bank, when Vitai Ratanakorn will take office as the new governor of the Bank of Thailand. Analysts expect currency management to be one of his immediate priorities.

Markets and investors are watching closely for details of any new measures, with the balance between attracting foreign investment and protecting Thailand’s economic competitiveness likely to dominate policy discussions in the weeks ahead.