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Suppose the Thai baht is pegged to the US dollar and the value of baht is fixed at 32 baht per dollar while the free
Suppose the Thai baht is pegged to the US dollar and the value of baht is fixed at 32 baht per dollar while the free market equilibrium exchange rate is 30 baht per dollar. Is the Thai baht overvalued or undervalued and what the impact on Thai's trade might be? Undervalued, which makes imports more attractive to Thai residents. Undervalued, which makes Thailand's exports more competitive. The Thai baht is neither over nor undervalued in this scenario, and therefore Thai's exports and imports are not affected. Overvalued, which makes imports more attractive to Thai residents. Overvalued, which makes Thailand's exports more competitive
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