The Bank of Thailand unveiled new measures on Friday aimed at balancing capital flows after warning a rapid jump in the baht risked undermining the economy amid renewed inflows into emerging markets.
The BoT will allow Thais to freely deposit and transfer funds in foreign currency deposits (FCD) accounts and to directly invest more in foreign securities, assistant governor Vachira Arromdee told a briefing.
FCD accounts may also be used for residents to diversify investments into assets denominated in foreign currencies such as overseas equities and gold denominated in US dollars.
The limit on Thai investors to directly invest in foreign securities was raised to US$5 million a year from $200,000, Ms Vachira said.
The cental bank will lift the limit on buying foreign assets by investors regulated under the Securities Exchange Commission, and allow the listing in Thailand of foreign securities such as exchanged traded funds, she said.
Investors will have to pre-register before being allowed to trade bonds, Ms Vachira said, adding this would be effective early next year, while other measures should be in effect this month.
"The rapid appreciation of the baht may affect the fragile recovery of the Thai economy," Ms Vachira said, noting the central bank "had closely monitored and intervened in the market as necessary to limit excessive currency volatility".
Kobsidthi Silpachai, head of capital markets research at Kasikornbank, was sceptical the measures would have much impact given they were not all new and fundamentals remained the same.
He also warned they undermined the inflation target mandate by encouraging "investment offshore and reducing economic activity onshore".
The baht shrugged off the announcements and rose to 30.28 per US dollar at 1.06pm, though still above a more than 10-month high of 30.13 on Monday.
The US presidential election outcome and signs of progress developing Covid-19 vaccines had strengthened confidence in the global economy, sparking inflows into emerging markets, including Thailand, Ms Vachira said.