The Bank of Thailand has further promoted capital outflows aimed at
supporting more investment abroad and better management of financial risks.
The new measures will also help
the central bank manage the exchange rate after the high pressure of large
capital inflows has been causing the baht to appreciate.
To promote overseas direct
investment, the central bank will allow individuals to make unlimited investment
to expand their production or marketing abroad, Pongpen Ruengvirayudh, deputy
governor of the BOT in charge of monetary stability, said yesterday.
The new measure is expected to
increase the competitiveness of the private sector. Corporations have been
allowed since 2010 to invest overseas without a limit on the amount of money.
For investment in foreign
portfolio, the central bank will allow institutional investors including listed
companies to put unlimited amounts into foreign assets.
The BOT and the Securities and
Exchange Commission will allow Thais to invest in foreign bonds issued in
Thailand.
The two institutions will also
relax rules on foreign-currency transactions to promote asset transactions via
the Asean Linkage platform under the Asean Economic Community's capital-market
development.
Residents will be allowed to have
bank accounts for foreign-currency deposits without limits if they have
business obligations.
This is aimed at helping
importers and others manage foreign exchange better.
To help people cope with
exchange-rate volatility, individuals will be allowed to unwind hedging
positions freely.
The central bank will also allow
moneychangers and money-transfer agents to do more business, and their
qualification requirements will be relaxed.
Non-residents will be able to do
more baht transactions without underlying businesses. Financial institutions
will be allowed to lend up to Bt500 million to non-resident clients. They will
also be allowed to make direct baht loans to non-residents who want to make
investments in Thailand.
The central bank may further
liberalise capital outflows after it makes an evaluation of the impact of the
aforementioned measures to be implemented this and next year. The BOT will look
into the pattern of capital flows and financial stability.
The central bank says Thailand
has lagged behind other countries in the same league of economic development in
terms of foreign direct investment.
Thai investment abroad is worth
only 15 per cent of gross domestic product, compared with an average of 30 per
cent, Pongpen said.
"Foreign investment in
Thailand is much higher than Thai overseas investment. This has caused the
central bank to increase international reserves, while new measures will lead
to more foreign assets to be in the hands of private sectors," she said.
The central bank is not worried
about the possibility of too much capital outflow in the future as it has a
large international reserve worth US$208 billion (Bt6.39 trillion), she said.
Thailand faced abrupt capital
outflows between 1996 and 1997, leading to a financial crisis that depleted
international reserves and spread to other Asian countries.
Pongpen said new capital inflows
would not amount to much compared with previous inflows since prices of Thai
shares and other assets have risen considerable. Estimated moderate money
injection via the third round of quantitative easing compared with previous QEs
by the US Federal Reserve will also not encourage large inflows, she added.
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. Since we are currently changing the platform of www.yourvietnamexpert.com, you may contact us at: sbc.pte@gmail.com, provisionally. Many thanks.
No comments:
Post a Comment