BoT mulls further anti-speculation steps – 22 Aug 2017

  • The Bank of Thailand may consider additional measures to curb baht speculation after occasional increases in the volume of foreign exchange transactions have been detected, says a senior official at the central bank.
  • “The Bank of Thailand requires commercial banks to provide additional information in the event of unusually high volume of transfers between non-resident baht accounts, which may relate to baht speculation,” said Vachira Arromdee, assistant governor of the financial markets operations group. The central bank has monitored baht transactions of non-residents and found that the balance of non-resident baht accounts and transactions between these accounts has irregularly increased, she said.
  • Ms Vachira said the appreciation of the baht of more than 7% since the beginning of 2017 has been mainly caused by the depreciation of the US dollar and Thailand’s improved economy. The baht is the top-performing currency in Asia for 2017 to date.
  • Apart from the US dollar’s retreat, Thailand’s safe-haven status and hefty current account surplus of more than THB800bn in 1H17 attracted offshore fund flows. Foreign investors were net buyers of more than THB120bn in Thai bonds and an additional THB2.23bn in the equity market.
  • The central bank has kept its tapering measures for almost five months, cutting supply of short-dated bonds by THB400bn as it seeks to curb hot money. Central bank governor Veerathai Santiprabhob said earlier that the cut in bond issuance was only one of the central bank’s tools available to curb speculation.

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