Foreign investors have been heavily speculating on the baht, weakening the local currency.
Offshore investors, especially from the US, have focussed their buying on two Asian currencies, the baht and South Korea's won.
Foreign investors expect the baht to further depreciate compared with the dollar in light of Thailand's twin deficits of budget balance and current account, said Kobsidthi Silpachai, head of market research at Kasikornbank (KBank).
According to KBank data, Thailand's current account deficit stood at US$10.3 billion in August.
However, forecasts suggest the country's reopening plan in November will gradually help curb the current account deficit.
In this scenario, KBank expects foreign investors to stop baht speculation in November, with the local currency gradually picking up in December, Mr Kobsidthi said.
From now to the end of this year, he expects the baht to fall to a lowest rate of about 34 baht to the US dollar, before rising to a high of 32.4 baht.
KBank forecasts the foreign exchange rate would be 32.75 baht against the dollar by the end of this year.
KBank further predicts Thailand's GDP growth rate for 2021 will contract at 0.5%. The contraction will owe in part to the country's reopening from Nov 1 not contributing substantially to GDP growth as it will come only two months before the end of the year.
