In the face of rising volatility, Thai central bank has relaxed Forex controls

The latest adjustments include efforts to cut transfer restrictions, facilitate hedging, and eliminate the need for supporting papers, according to the Bank of Thailand (BOT), and follow similar moves made last year to encourage capital outflows and deal with volatility.

Limits on annual lending to unaffiliated corporations, which is presently capped at $50 million, will be lifted, as will restrictions on foreign property purchases.

The guidelines, which take effect once published in the government gazette, also allow for additional external transactions and remove the BOT’s requirement for prior approval.

Thai businesses will be able to purchase foreign currencies for use in domestic transactions. Previously, transfers could only be made through foreign currency deposit accounts, according to the statement.

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Residents will be able to manage a greater range of foreign exchange risk exposures, such as hedging forex risks originating from domestic payment for commodities whose pricing is tied to the global market.

The BOT stated that in foreign currency transactions, less supporting documentation will be required, reducing expenses and bureaucracy.

“This would allow exporters, importers, and supply chain participants to better manage their foreign exchange risks,” it stated.