While missiles aren’t flying over Southeast Asia, markets are in turmoil. One overlooked consequence of regional tension is the weakening Thai baht – a quiet shift with serious financial impact for retirees on fixed incomes.
In recent days, as the Middle East once again finds itself on edge following the intensifying skirmishes between Israel and Iran, the ripple effects are being felt far beyond the region including right here in Thailand, particularly in the wallets of foreign retirees. While missiles may not be flying over Southeast Asia, markets certainly are. One of the most overlooked yet crucial consequences of this geopolitical tension is the weakening of the Thai baht, a subtle shift that can have serious financial consequences for retirees living on fixed incomes.
The Baht and the Battlefield
Over the past week (13–20 June 2025), the Thai baht has experienced increased volatility, particularly against the US dollar. Following a flight-to-safety response from global investors, the dollar strengthened, pushing the USD/THB exchange rate into the 32.70–32.90 range, up from 32.30 just days earlier.
While this may seem like an abstract change, for retirees depending on monthly pensions or social security checks issued in foreign currencies, it means that their Thai baht equivalents are fluctuating sometimes not in their favor.
Rising Oil, Rising Costs
One major consequence of the conflict is oil price volatility. With Brent crude recently touching $79 a barrel before easing slightly, transportation and energy prices in Thailand are expected to tick upwards. This, in turn, raises the cost of living an unwelcome development for those with a limited and fixed monthly income.
Foreign Currency Pensions: Temporary Gains, Lasting Worries
For retirees receiving income in USD, GBP, or EUR, the current baht depreciation might appear beneficial in the short term. After all, your dollars go further this month. But history shows that geopolitical shocks don’t lead to stable trends. Volatility is the name of the game, and the uncertainty often outweighs the short lived gains.
Moreover, retirees receiving income in currencies other than USD—such as AUD or CAD—may not see as much upside. In fact, against the baht, some of these currencies have shown mixed or negative movement over the same period.
Inflation’s Slow Burn
Even if your pension is arriving in a strong currency, the rising costs of imported goods, energy, and medical supplies will eat into your purchasing power. Inflation doesn’t announce itself loudly it erodes quietly. And for retirees, there are fewer ways to “earn more” to catch up.
What Can Retirees Do?
Review Currency Exposure – Consider converting only the funds you need monthly, and hold the rest in a stable foreign currency account.
Negotiate Rents in Baht – If you’re renting, consider locking in a baht-denominated lease to avoid being squeezed by currency swings.
Avoid Panic Buying Gold – While gold surged this week due to geopolitical fears, remember it’s a volatile hedge not a guaranteed safe haven.
Monitor Your Real Cost of Living – Track how your essential expenses are changing. What matters is not just the exchange rate, but what your money buys.
In times like these, wisdom lies not just in where your money is, but in how well you adapt to a world in motion.
Victor Wong (Peerasan Wongsri)
Victor Law Pattaya/Tax expert
Email: <
[email protected]> Tel. 062-8795414
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