The Bank of Thailand is set to implement measures to curb hot-money inflows after the baht recently rallied to a more than six-year high.
The central bank has been closely monitoring offshore fund inflows, especially those parked in Thai short-end bonds, said assistant governor Titanun Mallikamas.
The fund flows could be for both speculative and investment purposes because Thai bonds are regarded as a safe-haven, he said.
"The measures are expected to be implemented soon," he said. "The central bank already has instruments to take care of the foreign exchange rate."
The Monetary Policy Committee (MPC) meeting on Wednesday also voiced concern that the pace of baht appreciation is not consistent with economic fundamentals, he said.
The baht is the top-performing currency in Asia, gaining about 5.5% year-to-date against the dollar and 2.5% in the past three months.
The rapid gain has stoked concerns that it would undermine the country's competitive edge and deal a further blow to already-sagging exports.
Customs-cleared outbound shipments fell by 5.8% year-on-year in May to US$21.01 billion after contracting 2.6% in April and 4.9% in March.
Exports to most markets continued to ebb, owing to the global trade slowdown and US-China disputes.
According to Thai Bond Market Association data, net offshore fund inflows in Thai bonds amount to 56.5 billion baht month-to-date and 65 billion baht from the start of this year.
For the equity market, foreign investors are net buyers of 43.2 billion baht since the beginning of this month.
Thailand's solid fundamentals, particularly its massive foreign reserves, high current account surplus and solid financial stability, attract foreign fund inflows and push the baht higher.
At the MPC's meeting on Wednesday, the rate-setters discussed the baht's appreciation at a somewhat fast pace and its outperformance of regional currencies, a result of the weakening US dollar, short-term capital inflows and domestic factors.
"The committee expressed concerns over the baht appreciation, which might not be consistent with economic fundamentals and would continue to closely monitor developments of exchange rates and capital inflows," the MPC said in a statement.
The central bank in 2017 tapered its new weekly supply of three- and six-month bonds as a means to curb hot money after it found that hefty foreign funds flew into Thai short-dated notes for speculative purposes.