The Impact of Tourism on the Fluctuation of Thai Baht Exchange Rate: An Empirical Study Based on Seasonal Factors

Tourism is a vital component of Thailand's economy, significantly contributing to the country's GDP and foreign exchange reserves. Due to the seasonal nature of tourism, the exchange rate of the Thai Baht demonstrates volatility patterns that may be linked to variations in tourist arrivals and revenue. This study examines the influence of tourism on the volatility of the Thai Baht (THB) exchange rate, with a focus on seasonal factors. The research utilizes a time-series analysis through the GARCH model to assess the connection between tourism income and exchange rate volatility. Monthly data on tourist arrivals and THB exchange rates are analyzed, emphasizing the identification of seasonal trends and their impact on currency fluctuations. The study also includes control variables such as inflation and GDP growth to specifically determine the effect of tourism on exchange rate volatility. The results indicate that during peak tourism periods, the Thai Baht experiences increased volatility, largely due to substantial foreign currency inflows. These findings underscore the significance of accounting for seasonal tourism trends in the development of monetary policy and exchange rate strategies.