Wednesday, April 01, 2020

Exporters allowed to keep more cash off-shore 

Feb 28. 2020
Vachira Arromdee, Assistant Governor/Financial Markets Operations Group
Vachira Arromdee, Assistant Governor/Financial Markets Operations Group
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By The Nation

The Bank of Thailand has allowed exporters to park more money aboard as a measure to tame strengthening of the baht against the currencies of Thailand's trade partners and help exporters better manage foreign exchange risks. 

Vachira Arromdee, Assistant Governor/Financial Markets Operations Group, announced on Friday (February 28) that the Ministry of Finance and the Bank of Thailand had relaxed foreign exchange regulations to increase the threshold for proceeds that do not need to be repatriated to US$1,000,000 from the current threshold of $200,000. The relaxation includes not only export proceeds but also other incomes.

Those with export proceeds exceeding or equal to the new threshold of $ 1,000,000, will be allowed to use the revenues to offset foreign currency expenses, without having to repatriate the funds. Exporters can simply register with the BOT and provide necessary documentation to commercial banks, without prior approval from the the central bank. 

The above relaxation will help businesses reduce fund transfer costs and manage foreign exchange risks more efficiently, especially for exporters as the new threshold accounts for approximately 80 per cent of all exports. In addition, the relaxation will also promote capital flow balance and lessen pressure on the Thai baht. These relaxations will be effective from March 2, 2020, Vachira added.

The announcement came as the baht exchange rate remains relatively strong despite its recent retreat against the US dollar after it had appreciated by 8 per cent against the greenback last year.

The weighted- average interbank exchange rate of the baht was Bt 31.636 a dollar at the close today (February 28), according to central bank data.

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