BANGKOK: Thailand’s central bank is considering changing the country’s foreign exchange regulatory framework to assist the economy cope with volatility, authorities said on Tuesday, as the baht fell to a more than 13-month low versus the US dollar. The changes include lowering foreign exchange limits, making hedging easier, and eliminating the need for supporting paperwork for typical transactions, according to the central bank.
Director Pawinee Jitmongkolsa-mer told a press conference that the central bank is considering not requiring supporting documentation for typical transactions of more than US$200,000.
“At the present, current laws are not balanced and in line with the country’s fundamentals,” she said, adding that the new rules should be in place by the end of the year.
Earlier measures to encourage capital outflows, introduced late last year, appear to have been quite successful, with Thai investments abroad reaching a record US$17.8 billion between the fourth quarter of 2020 and May, Pawinee said, adding that such investments amounted to an average of US$3.1 billion per year between 2010 and 2019.
While Thailand’s stock market has suffered outflows, the bond market has seen net inflows, according to senior director Chayawadee Chai-Anant. “However, there are no alarming signals at this time, and we’re keeping an eye on it,” she said.
At 0450 GMT, the baht had weakened to 32.03 per dollar, a more than 13-month low. It has lost 6.4 percent against the US dollar so far this year, making it Asia’s second-worst performer. Apart from external considerations, the baht has depreciated against the dollar more than regional currencies, owing to a surge in coronavirus infections at home, according to Pawinee. (Orathai Sriring, Kitiphong Thaichareon, and Satawasin Staporncharnchai contributed reporting; Ed Davies edited the piece.)
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