The BOT governor is concerned about the rapid appreciation of the baht and has ordered strict controls on dollar sales to buy baht by the gold business. He has also discussed with the Ministry of Finance the need for agencies to supervise online gold trading to reduce currency volatility.
Mr. Vichai Ratanakorn, Governor of the Bank of Thailand. He revealed that since early December, the baht has appreciated by 2.5%, mainly due to the weakening of the US dollar. Additionally, the baht has been pressured by domestic factors such as seasonal year-end inflows from tourism and exports, along with capital inflows into stocks and bonds. Furthermore, transactions by gold traders selling US dollars to buy baht have increased significantly.
The Bank of Thailand has therefore been managing the baht and tightened controls over US dollar sales to buy baht by the gold business. It has instructed commercial banks to rigorously verify documents related to foreign currency sales transactions used to purchase baht by the gold business. The BOT is also seeking a Ministry of Finance announcement to grant it authority to request information on foreign exchange transactions from major gold traders and to strengthen supervision of US dollar sales to baht purchases. This is because gold business foreign exchange transactions sometimes account for up to 20% of all foreign exchange trading, affecting baht volatility. Moreover, the BOT has discussed with the Ministry of Finance the need for an appropriate agency to supervise the gold business, especially online gold trading platforms, which have grown significantly and clearly impact baht volatility.
Moreover, the BOT will monitor foreign exchange sales transactions to buy baht to prevent undesirable capital inflows unrelated to normal business operations or individual transfers. Commercial banks will be required to strictly scrutinize foreign currency inflows.
." Government Policy Additional