Investment rules clarified

The Bank of Thailand yesterday announced further clarifications to its controls on short-term capital inflows to serve as a reference for financial institutions in following the 30-per-cent reserve requirement.

Included in the exemptions from the reserve requirement are investments in real estate such as land and condominiums, but not real-estate mutual funds; travellers\\\' cheques and bank notes; donations, funds to foreign embassies and government agencies\\\' borrowings.

Subject to the reserve requirement are investments in debt securities transacted from December 19 onwards, foreign-currency borrowings transacted from the same date onwards and all other foreign inflows.

The central bank also clarified that balances in excess of Bt300 million in non-resident baht accounts would be allowed only until January 8. From January 8 onwards, balances in the special non-resident baht accounts for securities (SNS), which are opened for investment in the stock and futures exchanges will not be allowed to exceed Bt300 million.

The central bank said it would continue to review this limit.

The Nation

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SURGING BAHT
Capital curbs \'temporary\'

Central bank chief says controls on foreign funds will be lifted once currency stabilises

Bank of Thailand Governor Tarisa Watanagase yesterday defended Monday\'s shock capital controls to throttle debt inflows as a crisis response, saying they would be kept only until the currency calms down.

She declined to say how long that might take.

Thailand has the right to protect itself from hot offshore money hungry to profit on the upward trend of its currency, she said, adding that the intensifying speculation on the baht could end up destabilising the country as a whole.

\"It looks exactly like a one-way bet on the Thai baht, which has appreciated by 15 per cent this year alone. Nobody can give an explanation of why the baht has become the favourite target of speculation. It\'s beyond any fundamental reason,\" she said....

Full article http://www.nationmultimedia.com/2006/12 ... 022326.php

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