Bank of Thailand relaxes FX regulations
(23 October 2017 – Thailand) The Bank of Thailand (BoT) has issued several changes as part of its comprehensive reform of foreign exchange control regulations. The bank has committed to reducing costs and cross-border red tape that have hampered the free flow of trade.
Effective immediately, the latest announcements mean an individual wishing to trade, buy, sell, or withdraw foreign currency up to a value of US$50,000, will not need to fill out any forms or provide evidence of why they are exchanging the money. Requirements for banks to provide advice and receipts for customers wishing to buy foreign currency were also scrapped.
The announcement follows BoT’s issuance of in-depth plans to change how foreign exchange is regulated. The central bank announced in mid-2017 that it would, over time, be easing certain foreign exchange rules to reduce compliance costs, notably for the private sector.
In a statement, the Ministry of Finance and the BoT stated that the purpose of this relaxation was to facilitate foreign exchange transactions in the private sector, as well as to improve efficiency for business.
Prior to these announcements, the central bank advised in September that it intended to make it easier for Thai-based investors to park money in foreign securities. Additionally, in June, it laid out a timeline for regulatory changes geared to halt concerns that existing regulation are over complicated, repetitious and unnecessarily expensive.
The BoT’s, Veerathai Santiprabhob, said that easing the regulatory burden would save businesses more than bt1 billion (A$39 million) annually. In a statement, the BoT confirmed it would allow the “private sector to conduct foreign exchange transactions and foreign exchange hedging based on their own internal risk management and control policies within the framework set by the BoT".
In addition, the bank promised to reduce the documentation needed, remove the requirement for BoT approval for certain foreign exchange transactions, and allow “new players in the markets, facilitating the use of local currencies for regional connectivity and promoting transactions in electronic form for enhanced efficiency and flexibility”.
The BoT has previously taken measures to ease rules on capital flows, such as allowing direct purchases of overseas equities and derivatives by qualified investors, as part of a push to bolster the country’s financial development.
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