The Bank of Thailand has further eased rules to encourage more capital outflows by allowing a greater number of retail investors to directly put money into overseas securities. The move is part of efforts to rein in the stronger baht.
The latest relaxation of capital outflows came shortly after the central bank announced a further easing of related regulations by increasing the cap for agents to send money overseas to 800,000 baht a day per customer, up from 200,000, retroactively coming into effect from Jan 12, 2018.
Individuals with assets in a range of 50 million to less than 100 million baht can directly invest up to US$1 million a year in overseas securities, Vachira Arromdee, assistant governor for financial market operations at the Bank of Thailand, said in a release.
But individuals are restricted to investing in Asean securities or those of countries that are signatories to the International Organization of Securities Commissions Multilateral Memorandum of Understanding, she said.
Retail players who directly invest in securities abroad under the new rubric must inform the Bank of Thailand through its website and submit a report to the central bank on a quarterly basis, she said.
In 2016, the Bank of Thailand relaxed curbs on capital outflows by permitting investors with assets of at least 100 million baht to invest up to $5 million a year directly in overseas securities.
The baht yesterday stood at 31.35 to the US dollar, the strongest level since November 2013. It became the biggest gainer in Asia this year, soaring nearly 4% versus the greenback.
The local currency advanced 9-10% against the dollar last year.
The baht run-up could be attributed to recent weakness in the US dollar, Thailand's high current account surplus and fund inflows to the bond market.
Ms Vachira said the Bank of Thailand also broadened intermediaries tasked with investing in securities abroad on behalf of Thai retail investors to all licence holders approved by the Securities and Exchange Commission. Now all entities engaged in the securities and derivatives business, such as mutual fund dealers and derivatives agents, can take part.