Bank of Thailand eases repatriation rules to curb Baht’s appreciation
The BOT raises the repatriation threshold to $10m for exporters, a move aimed at stabilising the Thai Baht and reducing costs for 92% of export transactions
- The Bank of Thailand has raised the threshold for mandatory repatriation of foreign earnings tenfold, from $1 million to $10 million per transaction.
- This policy is designed to curb the appreciation of the Thai Baht by reducing the need for exporters to sell foreign currency and buy the local currency.
- The new rule allows businesses greater flexibility in managing foreign funds and is estimated to impact approximately 92% of Thailand's export transactions.
The BOT raises the repatriation threshold to $10m for exporters, a move aimed at stabilising the Thai Baht and reducing costs for 92% of export transactions.
The Ministry of Finance and the Bank of Thailand (BOT) have significantly relaxed regulations regarding the repatriation of foreign earnings, a strategic move designed to alleviate the persistent upward pressure on the Thai Baht.
Pimpan Charoenkwan, assistant governor of the Financial Markets Group at the BOT, announced on Tuesday that the new criteria were officially published in the Royal Gazette on Monday (19 January).
Under the revised framework, the threshold for foreign currency earnings that Thai residents and businesses are exempt from repatriating has been increased to $10 million per transaction, a tenfold increase from the previous limit of $1 million.
The BOT estimates that export transactions valued below this new $10 million ceiling represent approximately 92% of Thailand’s total export value.
The central bank expects the measure to act as a natural hedge against the Baht’s strength.
By allowing exporters to retain higher volumes of foreign currency, businesses can now settle overseas invoices or manage their portfolios without the immediate need to sell US Dollars and purchase Baht.
"This adjustment is essential for maintaining exchange rate stability," Pimpan stated. "Beyond reducing international transfer costs, it provides entrepreneurs with much-needed agility in managing their global revenue and expenditure."
The relaxation of repatriation rules is part of a broader, more aggressive suite of measures intended to slow a currency rally that the BOT believes is disconnected from economic fundamentals.
To counter potential speculation, the central bank has simultaneously tightened its grip on capital inflows:
Enhanced Scrutiny: Documentation is now mandatory for all inbound foreign exchange transactions exceeding $200,000.
Gold Trade Oversight: Commercial banks have been ordered to increase the rigour of document checks for gold-related currency trades.
Platform Regulation: The BOT is currently drafting an Exchange Control Officer notice to collect more granular data on gold trading. It is also weighing the introduction of a cap on Baht-denominated gold trading via online platforms to further insulate the currency from volatility.
