Bank of Thailand relaxes foreign exchange rules

Bank of Thailand relaxes foreign exchange rules

The Bank of Thailand (BoT) said on Monday it had further relaxed foreign exchange regulations to allow for easier capital movement and risk management amid volatility as the baht hit a two-week low against the dollar.

The latest changes iinclude measures to reduce limits on transfers, facilitate hedging, and remove a requirement for supporting documents, the BoT said in a statement, and follow similar moves last year when forex measures were eased to encourage capital outflows and cope with volatility.

Limits on yearly lending to unaffiliated companies, which is currently capped at $50 million, will be removed, as will limits on purchases of immovable properties abroad.

The rules, effective once published in the government's gazette, also allow outward transfers for more purposes, and remove requirements for prior approval from the BoT.

Thai firms will be allowed to buy foreign currencies for transfer domestically as necessary. Previously, transfers were allowed only through foreign currency deposit accounts, it said.

Resident companies will be allowed to manage their foreign exchange risk exposures in a broader scope, such as hedging forex exposures arising from domestic payment for goods whose price is linked to the global market.

Fewer supporting documents will be required in foreign currency transactions to lower costs and a paperwork burden, the BoT said.

"This would enable exporters, importers, and those in the supply chain to better manage their foreign exchange risks more efficiently," it said. 

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