Bank of Thailand 'closely monitoring' weakest baht in 5 years

The Bank of Thailand (BoT) on Thursday said the movement of the baht has had limited impact on inflation and the economy, after the currency reached its weakest rate against the US dollar for five years on Thursday.

Bank of Thailand 'closely monitoring' weakest baht in 5 years
Business

Bank of Thailand 'closely monitoring' weakest baht in 5 years

Central bank says it will further relax foreign exchange rules

published : 12 May 2022 at 15:37

writer: Reuters

A man holds up a newly unveiled 20-baht polymer banknote at the Bank of Thailand headquarters in Bangkok, Thailand, Jan 20, 2022. (Photo: Reuters)

The Bank of Thailand (BoT) on Thursday said the movement of the baht has had limited impact on inflation and the economy, after the currency reached its weakest rate against the US dollar for five years on Thursday.

"The Bank of Thailand is closely monitoring the situation and is ready to take care of the baht if necessary," Assistant Governor Alisara Mahasandana told a virtual briefing.

It was not necessary to use interest rates to manage the baht because it was moving in line with regional currencies and has not had a significant impact on inflation or the economy, she said. 

The BoT will relax rules for foreign exchange service for non-banks, helping companies more efficiently hedge and manage risks, Ms Alisara said.

The measures will come into effect on Friday and will "make overseas transactions easier while simplifying hedging for businesses so there can be more efficient risk management," she said. 

More measures will come into effect over the next few years, she added.

"We will focus on non-banks by expanding the scope of non-bank FX services and adjusting guidelines for more flexible FX transactions," she said, noting this would help lower costs.

She said on average such transactions account for 7% of expenses, which is higher than the average in the region.

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