The Bank of Thailand (BoT) announced on Friday policies to manage the strengthening baht, both on a short-term and long-term basis.
The measures are:
1. Allowing Thais to deposit and transfer savings freely between foreign currency deposit (FCD) accounts
2. Expanding the limit for retail investors in foreign securities to US$5 million per year from US$200,000 per year.
There will be no limitations on foreign investment through intermediaries and under the supervision of the Securities and Exchange Commission (SEC), according to the statement, together with unlimited trading among foreign securities.
3. Requiring bond pre-trade registration for investors prior to trading so that the BoT could identify and monitor investors closely.
The central bank has said it wants to keep the one-day repurchase rate unchanged at 0.5 per cent as widely expected.
Analysts at TISCO Securities believe that the BoT will assess the impact of measures already implemented, such as debt restructuring based on debtors’ repayment ability from the debt moratorium that ended in October.
The research team also suggests waiting for greater utilization of the 500 billion baht in soft loans, of which 24 per cent or 121 billion is already disbursed, with more relaxed conditions to support the economy.
“We expect the policy rate to be on hold at 0.50 per cent through end-2021F as the BoT seeks to preserve its very limited ammunition,” said TISCO analysts.