The Bank of Thailand (BoT) says it will double the amount that Thai retail investors can invest in foreign securities in order to encourage capital outflows amid a volatile baht.
Eased foreign-exchange rules for domestic companies and individuals will help them shore up their risk management as the baht is expected to remain volatile due to a host of external factors, the central bank said in a statement on Tuesday.
Investments of up to $10 million in foreign securities will be permitted for Thai retail investors, up from $5 million, it said.
As well, the BoT plans to promote the use of local currency among local businesses and cut their reliance on dollars by transacting more in currencies such as the yuan, yen, ringgit and rupiah, Alisara Mahasandana, assistant governor for financial markets operations group, told reporters.
Some foreign investors would be allowed to hedge foreign-exchange risk with Thai financial institutions, the statement said.
The central bank will also raise the limit on grant money transfers — without underlying transactions — to $200,000 from $50,000 currently, Ms Alisara said.
As well, it will relax the rules for Thai units of foreign companies to send money as “notional pooling” to founders and expand the scope of activities for companies under the non-resident qualified company system, she added.
The new foreign-exchange rules may take effect from the third quarter, Ms Alisara said.
The measures follow steps taken last year when forex measures were eased to promote easier capital movement and risk management amid volatility.
The baht is down more than 1.7% this year against the dollar and is currently trading around 35.20 to the greenback. The currency will remain volatile, the BoT said, adding that it would monitor a host of external factors including monetary policies of major economies, inflation trends and the political uncertainty following the general election.