Thailand’s eases FX rules amid volatility

* removes $50 million caps on buying goods overseas

*Thai companies are allowed to purchase foreign currency for domestic transfers

* Companies authorized to carry out more hedging (add details from paragraph 2)

BANGKOK, April 18 (Reuters) – Thailand’s central bank said on Monday it had further eased foreign exchange regulations to facilitate capital movements and risk management amid volatility as the baht hit a low of two weeks against the dollar.

Latest changes
include measures to reduce limits on transfers, facilitate hedging and remove the requirement for supporting documents, the Bank of Thailand (BOT) said in a statement, and follow similar measures last year when foreign exchange measures were eased to encourage capital outflows and deal with volatility.

Limits on annual loans to unaffiliated businesses, which are currently capped at $50 million, will be removed, as will limits on purchases of overseas real estate.

The rules, effective once published in the government gazette, also allow outbound transfers for other purposes and remove BOT pre-approval requirements.

Thai companies will be allowed to purchase foreign currency to transfer to the domestic market if necessary. Previously, transfers were only allowed through foreign currency deposit accounts, he said.

Resident companies will be allowed to manage their foreign exchange risk exposures within a broader framework, such as hedging foreign exchange risks resulting from domestic payment for goods whose price is linked to the world market.

Fewer supporting documents will be required in foreign currency transactions to reduce costs and paperwork burden, the BOT said.

“This would allow exporters, importers and supply chain actors to better manage their currency risks more effectively,” he said. (Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Martin Petty and Kanupriya Kapoor)

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