BoT loosens forex rules further

Ceiling doubled to $10 million for Thai investments in foreign securities

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.

Under a further relaxation of foreign-exchange regulations, investments of up to $10 million in foreign securities would be permitted for Thai retail investors, up from $5 million, the central bank said in a statement on Tuesday.

Assistant governor Alisara Mahasandana said other measures would include promoting the use of local currency in managing foreign exchange.

Some foreign investors would be allowed to hedge foreign-exchange risk with Thai financial institutions, the statement said.

The move follows steps taken last year when forex measures were eased for easier capital movement and risk management amid volatility.

The baht has weakened by 1.8% against the US dollar so far this year and is currently trading around 35.20 to the greenback.

The rules are part of the central bank’s foreign-exchange ecosystem development plan, which aims to address structural problems of the forex market by relaxing rules to promote capital movement and flexibility.