The Bank of Thailand has suggested that the Finance Ministry raise the cap on foreign income repatriation to help ease pressure on the baht.
Amid increased fluctuations in the baht-USD exchange rate driven mainly by external factors, Pimphan Charoenkwan, assistant governor for financial markets at the central bank, explained that additional measures are being proposed to stabilize the currency and better align it with regional peers.
One such measure involves increasing the repatriation trigger for foreign income from $1 million to $10 million per transaction, expected to be implemented by year-end. This move aims to give the private sector more flexibility in managing foreign exchange liquidity and ease upward pressure on the baht.
Recently, the baht appreciated roughly 1% against the dollar, mainly due to the dollar’s weakening amid shifting expectations about U.S. monetary policy. The currency also faced pressure from exporters’ foreign exchange sales, bond inflows, and dollar sales by major gold traders, influenced by a surge of over 4% in global gold prices, according to the central bank.
Additionally, the bank proposed the Finance Ministry tighten supervisory controls by requiring financial institutions to conduct stricter checks on gold-related foreign exchange transactions and mandate large gold traders to report relevant transactions. These measures aim to improve monitoring and help policymakers assess potential impacts on the baht for better decision-making.
Pimphan emphasized that the central bank will continue observing the baht’s movements and stands ready to intervene to limit excessive volatility and protect businesses from adverse effects.
As of Monday, the baht opened at 32.09 per dollar, stronger than Friday’s close of 32.12, supported by a weaker U.S. dollar and rebounding global gold prices, explained Poon Panitchpibun, a money market strategist at Krungthai Global Markets. The bank expects the baht to trade between 31.85 and 32.45 per dollar this week.