THE THAI Association of Foreign Exchange will seek urgent remedial measures from the Indian Embassy after New Delhi’s recent announcement that it was removing 500- and 1,000-rupee notes from circulation.
“We have asked commercial banks how to return the 500- and 1,000-rupee banknotes to them but the commercial banks don’t have any answers for us. Therefore, we will send a letter to the Embassy of India, asking the embassy to help find solutions for us,” Chanaporn Poonsuphirun, vice president of the association, said yesterday.
The association raised the matter on Saturday as local moneychangers are holding bundles of these banknotes.
“The rupee is one of the popular currencies, as Thailand is one of the venues for Indian weddings,” she said.
Chanaporn’s company Twelve Victory has more than 100,000 rupees worth of 500 and 1,000 notes. This is regarded as a small volume, as the company has a policy of not carrying many foreign banknotes, and foreign currencies could be volatile after the US presidential election.
The sudden withdrawal of 500- and 1,000-rupee banknotes from the financial system has affected moneychangers globally, not only in Thailand.
Some Thai moneychangers have suspended rupee transactions to reduce risk exposure pending clearer information from the Indian government.
Chanaporn said Thai state agencies should offer help to moneychangers because they have no way to send the banknotes back themselves. They can only send foreign banknotes to commercial banks.
The money-exchange business has not been very active because Thailand is in mourning. Foreign tourists have opted to travel to other countries, while Chinese arrivals have slowed from the crackdown on zero-dollar tour packages.
However, the Bank of Thailand has relaxed its regulations to allow moneychangers to trade foreign banknotes with one another. That has helped to keep money flowing.
The Thai Association of Foreign Exchange plans to discuss the narrow spread in money exchange amid the fierce competition in the industry. The members of the association should find a common solution to reduce the competition to help shore up margins, Chanaporn said.
Foreign currencies in Asia are expected to suffer from the policy of US President-elect Donald Trump, who wants US manufacturers that now have production bases in low-cost countries to return to the United States. This will upset the stability of Asia currencies, Chanaporn said.