Investigation Demanded as Surging Thai Gold Exports to Cambodia Fuel Baht Rally
An unprecedented surge in Thai gold exports to neighboring Cambodia has sparked immediate calls for a comprehensive investigation from industry leaders, as these massive shipments are believed to be a major factor fueling the Thai baht’s recent sharp rally, a development that gravely threatens to undermine the nation’s vital export and tourism sectors.
In the first seven months of 2025 alone, Thai gold shipments to Cambodia experienced a dramatic 19% jump compared to the previous year, totaling an astonishing 71.3 billion baht (equivalent to approximately $2.25 billion).
This rate of export places Cambodia on track to potentially surpass last year’s record of 106 billion baht.
According to data analyzed from Thailand’s Customs Department, this surge puts Cambodia in a position to rival global gold refining centers like Switzerland and major regional trading hubs such as Singapore for the volume of Thai gold shipments received.
This development underscores Cambodia’s emergence as an inexplicably out-sized destination for Thai gold, raising serious questions over the actual economic drivers behind this trade flow and its direct implications for the baht’s unexpectedly fast appreciation this year.
The Bank of Thailand (BoT) has already publicly vowed to take decisive steps to mitigate the baht’s volatility and to limit the undue influence of the rapidly changing gold prices on the currency.
This situation is highly unusual and suggests that the underlying mechanisms driving the currency’s movement may be external to the typical trade balance.
Suspicious Trade Flows and Money Laundering Concerns
The Federation of Thai Industries (FTI) has publicly labeled the surging gold and jewelry exports as “suspicious,” asserting that the sheer volume of the trade is entirely inconsistent with Cambodia’s size and internal demand, leading to concerns that gold may be exploited as a tool for money laundering activities.
Federation of Thai Industries Chairman Kriengkrai Thiennukul stated in a recent interview that the FTI found that gold and jewelry exports to Cambodia have dramatically surged since last year in amounts that simply do not align with the country’s actual size and consumption demand.
Mr. Kriengkrai did not mince words, saying, “It looks suspicious,” and subsequently called for immediate action from Thai policymakers, including the BoT, customs authorities, and the Commerce Ministry, to launch a full investigation into these transactions.
He suggested a plausible connection to illicit activities, noting, “It may come from grey businesses like scammers and casinos. It’s possible that they use gold as a tool for money laundering,” where the precious metal acts as an untraceable intermediary for converting illicit funds into legitimate assets.
While these direct gold flows are driving the baht’s strength, another distinct factor weighing on the currency is the substantial remittance outflows from Thailand’s large population of registered migrant workers, estimated at around 4 million, with the actual number of undocumented laborers likely being much higher.
These large volumes of financial transfers, conducted through both legal and informal channels to neighboring countries like Myanmar and Cambodia, are thought to be draining domestic baht liquidity and adding another layer of pressure and complexity to the national currency’s valuation.
The Gold Traders Association confirmed that despite the recent dramatic increase in gold exports to Cambodia, the country is not considered a traditional major market, with Singapore and Hong Kong remaining the primary, established trading partners for Thai gold.
Industry Pressure on BoT to Stabilize the Baht
Industry groups, including the FTI, are planning to meet with the central bank governor to urgently raise their concerns over the strong baht’s detrimental impact on exports and tourism, stressing that the currency’s disproportionate movement, partially fueled by suspicious gold flows, is economically disadvantageous.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), which includes the FTI and other influential business organizations, is set to hold a crucial meeting next week with outgoing BoT Governor Sethaput Suthiwartnarueput.
The primary purpose of this meeting is to formally raise the industry’s deep concerns, specifically targeting the negative impact of an overly strong baht on the competitiveness of exports and the profitability of the tourism sector, alongside a review of potential measures to support struggling small- and medium-sized enterprises (SMEs).
The group intends to specifically flag their strong suspicions regarding the rising gold imports into Cambodia, which they see as an anomalous factor distorting the currency’s value, and the accelerating effect of migrant worker remittances.
Mr. Kriengkrai articulated the industry’s stance on currency movement, stating, “We are OK if the baht strengthens in line with other countries from dollar weakness,” indicating acceptance of normal market forces.
However, he strongly objected to the current situation: “It’s not acceptable for the baht to move more than others like this. This puts us at a disadvantage at the most critical time for our economy. It should be a priority of the policymakers.”
The industry leaders are urging the BoT to prioritize steps that introduce greater stability and curb the volatile appreciation driven by these unconventional factors, especially the anomalous trade of gold and jewelry, which is placing Thailand at a significant competitive disadvantage.
