BoT raises foreign transfers ceiling, fights strong baht

BoT raises foreign transfers ceiling, fights strong baht

The baht continues to rise against the US dollar. (Reuters photo)
The baht continues to rise against the US dollar. (Reuters photo)

The Bank of Thailand (BoT) has increased the size of the maximum international money transfer allowed each customer for non-commercial bank business from 200,000 baht per day to 800,000 baht per day in a move to curb the strong baht.

Vachira Arromdee, assistant governor for financial markets operations, confirmed the increase in the allowed daily international money transfer for payment for goods and services took effect on Jan 12, Post Today reported.

A source at the Thai Bankers Association said this relaxation will largely benefit small- and medium-sized enterprises (SMEs), along with general customers using international money transfer services.

It will promote competition among the providers of ithe money transfer services, which will benefit customers in terms of lower fees, the source said. It will also facilitate an increased outflow of cash, which should help mitigate the baht’s strength. 

Deputy Prime Minister Somkid Jatusripitak said the central bank is closely monitoring the baht. He attributed the stronger baht, and other stronger currencies in the region, on the weaker US dollar.

The baht rose to between 31.90-31.96 to the US dollar on Monday and was tending to become stronger on Tuesday, according to Rung Sa-nguanruang, an executive for money market analysis at the Bank of Ayudhaya.

A major factor resulting in the strong baht is the continuous capital inflow in the bond market, which has been prompted by the US announcement of a better-than-expected inflation figure that, however, is not sufficient to improve the weak dollar, Ms Rung said.

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