The simple explanation is that the Thai baht was closely tied to the
dollar which meant that there was a substantial depreciation to the baht against the average
currency of Thailand’s trading partners. Hence, the year 1985 was to be a turning point for
the Thai economy. The external environment became better, for instance, interest rates and
oil prices declined, while the price of traditional commodity exports began to recover.
Demand for Thai exports quickly picked up after the two devaluations in 1981 and 1984,