The Bank of Thailand (BoT) has strengthen its regulatory oversight of inbound foreign exchange transactions to help curb baht appreciation and prevent misreported or illicit capital inflows, according to a senior official.
Pimpan Charoenkwan, Assistant Governor for Financial Markets at the BoT, explained that the central bank has tightened the rules for verifying documentation related to foreign currency sales by residents, including both individuals and legal entities.
This increased monitoring aims to ensure that the origins of foreign currency brought into Thailand are consistent with declared sources and to mitigate the risk of undesirable or potentially illegal transactions.
Currently, transactions where residents sell US dollars for baht exceeding US$200,000 (about 6.3 million baht) account for roughly 15% of all inbound transactions by residents. However, these transactions make up around 85% of the total value of inbound foreign exchange.
The existing thresholds that exempt such transactions from documentation checks could be exploited for illicit activities or financial misconduct. Large volume transactions under these thresholds might also influence exchange rate movements, she cautioned.
Under the new rules, enhanced scrutiny will be applied to: foreign currency sales for baht and transfers into Foreign Currency Deposit (FCD) accounts; foreign currency proceeds from gold sales; and foreign currency banknote sales.
For transactions valued at US$200,000 or more, banks are now required to verify supporting documents for each transaction to confirm that the source of the foreign currency matches the customer’s declaration.
An exception is made for routine transactions involving well-known business customers with ongoing Know Your Business (KYB) and Customer Due Diligence (CDD) processes.
Nonetheless, banks must request transaction-specific documentation for all transactions of US$200,000 or more, regardless of the customer’s profile, when the foreign currency originates from sources such as: proceeds from selling real estate to foreigners; income from selling digital assets; other foreign capital inflows outside intra-group or branch investments, portfolio investments, loans or derivatives gains; or foreign currency not related to payments for goods, services, income, transfers, donations, investments, banknotes, or deposits.
Regarding foreign currency proceeds from gold sales, banks are also required to verify documentation for the overseas sale of gold when dealing with foreign currency derived from such transactions.