BOT relax foreign exchange measure for non-residents

Suchart Sukkarnkosone, director of the central bank's Financial Markets Office, said after the BOT meeting with dealers from local and foreign banks to discuss on non-residents' request for hedging transactions in Thai market.

The non-residents eligible to do the sell-buy swap will be able to use the onshore foreign exchange swap market to obtain the baht they need to roll over those transactions done before December 19 when the capital control took effect.

The meeting was held because several non-residents who had baht transactions outside Thailand have asked permission from the BOT on whether they can do the hedging in Thai market which cost lower than offshore market.

The higher cost of baht hedging in offshore market was due mainly to low baht supply in overseas. Thus, non-residents have asked the central bank for whether they are allowed to do the hedging locally.

The relaxation, Suchart said, is aimed to help reduce hedging transaction cost of non-residents and also reduce volatility of foreign exchange as well as interest rates in offshore market.- The Nation

Anoma Srisukkasem