11 July 2024

The Bank of Thailand is concerned about the rapid appreciation of the baht currency and has taken measures to curb speculative hot-money inflows, Assistant Governor Vachira Arromdee said today (Friday).

Effective July 22nd, limits on the outstanding balance of non-resident baht accounts (NRBA) and the non-resident baht accounts for securities (NRBS), which are opened with financial institutions in Thailand, will be reduced from 300 million baht to 200 million baht for each non-resident baht account.

Ms. Vachira said that the NRBA and NRBS were, sometimes, used to temporarily park capital of foreign investors, particularly at a time when the baht has strengthened against other regional currencies.

For accounts with an outstanding balance exceeding 200 million baht, the central bank will require their financial institutions to tell the account owners to comply with this new measure before July 22nd.

The assistant governor insisted that non-resident baht accounts are not accounts of business operators who will have to conduct financial transactions with their trading partners abroad to settle debt payments in baht currency.

In case the NRBA or NRBS owners need a higher outstanding balance in their accounts, exceeding the 200 million baht limit, they can seek approval from the central bank on case by case basis, said Ms. Vachira.

She said that the central bank has upgraded the reporting of non-resident holdings of Thai debt securities by requiring their financial institutions to name the ultimate beneficiary of the accounts to the central bank, as a measure to curb speculative capital inflows on bonds by foreign investors.

The central bank will continue to monitor closely the developments of the baht currency and the behavior of foreign investors and is ready to take additional measures to deal with the baht speculation.