BANGKOK, Dec 1 (Reuters) – Thailand’s central bank is planning measures to ease the upward pressure on the baht, including having banks tighten their controls on gold-related foreign exchange transactions and requiring major gold traders to supply their transaction data.
The baht has strengthened by 7% against the dollar so far this year to be Asia’s second-best performing currency. The baht’s appreciation is seen as a threat to the competitiveness of the export and tourism sectors.
The Bank of Thailand is closely monitoring the baht and will act on any volatility to reduce the impact on businesses, it said in a statement.
The BOT said it will propose the Finance Ministry increase the limit for foreign income that does not need to be repatriated to $10 million per transaction, up from the current $1 million per transaction, to take effect this month.
The higher limit would provide greater flexibility for the private sector in managing foreign currency and ease the pressure on the baht to rise by reducing the amount of foreign exchange being brought into the country.
Earlier on Monday, central bank governor Vitai Ratanakorn said he saw room to cut interest rates, but added such a move had only a limited impact on an economy facing structural problems.
The central bank has cut its policy rate four times over the past year, taking it to a three-year low, to support a sluggish economy. Its next policy review is on December 17, and some economists expect a further rate reduction.
It unexpectedly left the key rate unchanged at 1.50% at its review in October.
(Reporting by Orathai Sriring and Thanadech Staporncharnchai; Writing by Martin Petty; Editing by John Mair)
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