Thailand: BoT prepares to restrain baht

• The Bank of Thailand is set to step up efforts to rein in the baht in the next few months by easing capital flow regulations, managing gold trading flows and lowering the current account surplus, says its chief.
• The central bank is talking with related regulators to encourage outbound portfolio investment by both institutional and individual investors, said central bank governor Veerathai Santiprabhob.
• The measures are expected to be implemented in the next few months, he said.
• The regulator will encourage exporters to hold foreign currencies overseas longer and allow portfolio investors to invest more abroad, Mr Veerathai said.
• Outbound portfolio investment would help balance massive inbound portfolio investment and is an instrument for managing the baht, he said.
• Global uncertainty stemming from economic and geopolitical factors has stoked demand for gold, leading to significant gold trade in Thailand.
• “Such activity, however, doesn’t benefit nor add value to the economy,” Mr Veerathai said. “On the other hand, the side effect on the economy is a stronger baht.”
• For Jan 19-Aug 19, the current account surplus amounted to USD25bn, of which USD4-5bn was from gold.
• Mr Veerathai said the current account surplus is a structural economic problem that warrants infrastructure investment from the public and private sectors to help lower the surplus.
• Digital infrastructure investment in accordance with the country’s digital economic roadmap will lead to higher imports, he said.

External Link : https://www.bangkokpost.com/business/1769504/bot-prepares-to-restrain-baht

External Link : https://www.nationthailand.com/business/30377279