The baht's movements have not been justified by economic fundamentals, and the real effective exchange rate is poised to be out of sync with those of Thailand's trading partners, said Narongchai Akrasanee, a member of the Bank of Thailand's Monetary Policy Committee (MPC).
The real effective exchange rate (REER) is the weighted average of a country's currency relative to an index or basket of other major currencies adjusted for inflation effects.
The weights are determined by comparing relative trade balances, in terms of one country's currency, with other countries within the index.
Measures to handle the baht's recent gains are readily available but need to be implemented at the right time, said Mr Narongchai, a former commerce minister.
"To prevent fluctuations, our course of action must be synchronised with those of other relevant agencies including the Finance Ministry. The most important thing is we need to have the same view on the current situation," he said.
"We've had a lot of discussions these past few weeks, and the National Economic and Social Development Board has also participated. The conclusion is the Finance Ministry needs to take part if the REER is to be balanced."
An appropriate foreign exchange rate must not lead to too large a trade deficit or surplus, he said, adding that the stronger currency will cause a trade deficit.
Mr Narongchai said Thailand's current account is in surplus. Although it shows a small trade deficit, a high surplus in services offsets it.
However, the baht's strength has started to affect exports, he said.
The currency has hardly changed in recent days after weakening from last month's level of 28.55 to the US dollar, a 16-year high, on concerns the government and central bank may impose draconian measures to curb the flood of capital inflows and the baht's rise.
"We can't just compare the baht with the dollar, yen and euro. We need to take into consideration the currencies of all our trade partners. The central bank knows what instruments to use. And if the equilibrium of REER is not in balanced, measures will be launched," he said.
But in addressing the baht's appreciation, the overall picture must be considered. Measures can be implemented to help certain groups, he said.
Mr Narongchai said he cannot tell when the policy rate will be cut.
In a separate development, Isara Vongkusolkit, chairman of the Thai Chamber of Commerce (TCC) and the Board of Trade, said the baht swings have now hit hard the country's exports, leading to a sharp drop of advance purchasing orders from foreign buyers.
The baht appreciation has made it harder for exporters to quote selling prices, he said.
Members of the TCC, the Board of Trade and the Thai Bankers' Association are scheduled to meet the central bank governor next week to discuss measures aimed at stabilising the baht.