However she said BOT will just relax the measures but will not the capital control measures.

The central bank imposed a one-year, 30% withholding requirement on many types of capital inflows in mid-December in order to relieve speculative pressure that had driven the baht to a nine-year high.

But it has since been forced to create exemptions for vital investments and other transactions.

"We are not removing the 30% requirement, but we are offering an option. If they choose a swap to hedge it, they can still get the full amount borrowed, but it will increase costs," she said.

She said a formal announcement would be made in a day or two, presumably meaning early next week.

Swapping the proceeds into baht, which entails a future obligation to swap back into the foreign currency, will allow the transaction to take place without disrupting stability in the regular spot market for baht, Tarisa said.

However, the governor didn't address the issue of the disruption caused by a lack of baht liquidity in offshore foreign exchange markets as a result of the reserve requirement.

At 9.35am, the dollar was quoted at Bt35.855 in onshore markets, up from Bt35.79 late Thursday due to suspected intervention by the central bank, dealers said.

In offshore markets, however, the dollar was quoted in a wide bid-offer range of Bt34.10-Bt34.20, versus Bt34.00-Bt34.15 late Thursday in Asia and Bt34.10-Bt34.30 overnight in New York.

Dow Jones and the Nation