Bangkok One News
Home » BOT (Bank of Thailand) plans to relax foreign exchange rules
Bangkok News Breaking News Business

BOT (Bank of Thailand) plans to relax foreign exchange rules

BOT (Bank of Thailand) plans to relax foreign exchange rules

The Bank of Thailand (BoT) is set to further relax foreign exchange regulations in order to facilitate business operations and improve the country’s foreign exchange environment in the long run.

In the fourth quarter, the central bank plans to implement additional relaxations as part of the third phase of its foreign exchange ecosystem initiative. This phase will specifically target the easing of regulations concerning money outflows for Thai nationals.

Significant changes will include increasing the annual outflow limit from $50,000 to $200,000, lowering restrictions on negative lists, and adjusting foreign exchange management rules related to the national pooling method. According to Chananun Supadulya, director of the BoT’s Foreign Exchange Administration and Policy Department, these measures will enhance flexibility.

With the national pooling method, businesses will have the opportunity to borrow in baht for both domestic and international activities while enjoying increased flexibility in managing foreign exchange.

For instance, offshore companies operating in Thailand will be able to finance their foreign parent companies in baht, while Thai companies will be able to provide baht financing to their foreign subsidiaries.

Moreover, the central bank will ease foreign exchange management rules for non-residents as part of the Non-Resident Qualified Company (NRQC) project, which currently includes 82 foreign companies.

Regarding the FX ecosystem, Ms. Chananun emphasized that the central bank has consistently relaxed foreign exchange regulations under this initiative, which began with its first phase from 2019 to 2021 and continued with a second phase from 2022 to 2023.

She highlighted that the BoT has received positive feedback on this initiative, as reflected by a 21.9% increase in foreign currency deposit (FCD) accounts since 2019, bringing the total to 851,993 accounts.

“The FX ecosystem signifies a long-term structural enhancement that strives to balance business convenience with exchange rate stability. It is designed to assist both businesses and investors by providing easier management of foreign exchange risks,” she noted.

According to the BoT’s economic update from June, the baht experienced a slight depreciation against the US dollar, influenced by stronger-than-expected US non-farm payroll data, which sparked market speculation about the Federal Reserve maintaining elevated interest rates for an extended duration.

However, as of July 26, the baht had appreciated against the dollar, with expectations for the Fed to potentially reduce its policy rate twice within the year.

The baht was trading at 35.48 per dollar yesterday, up from 35.63 per dollar on Wednesday, reflecting a weaker dollar as the market anticipates a possible rate cut by the Fed in September, according to Poon Panitchpibun, a money market strategist at Krungthai Global Markets.

Translate »