Foreign capital controls 'to end today'
Bangkok Post Breaking News
(Agencies)
Thailand will lift its remaining controls on capital inflows today, after the finance minister who was their chief supporter announced his resignation.
Bank of Thailand Governor Tarisa Watanagase told the Foreign Bankers' Association on Wednesday night that the controls would be lifted on Thursday, more than two months after the measures were introduced.
"Tomorrow (Thursday), the central bank will have a final review on the measures regarding capital inflows," she said.
"Fully hedged bonds, mutual funds and property funds will be exempted from the 30 percent reserve requirement."
Reserve requirements imposed in mid-December effectively lock up for a year 30 percent of any fund inflows coming into Thailand for financial investment.
The day after the announcement the Thai stock market nosedived 15 per cent, the biggest one-day drop by value in the 31-year history of the bourse, due to panic selling over the currency rules imposed to curb the Thai baht's rise.
The bank was forced to make an abrupt U-turn on some of the requirements, and eased others in the following weeks.
Tarisa's announcement that the remaining requirements would be lifted came just hours after Finance Minister Pridiyathorn Devakula announced his resignation.
Pridiyathorn had defended the reserve rules as a way of helping exporters by trying to weaken the baht, which has gained sharply against the dollar, making Thai products more expensive overseas.
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