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UOB Group’s Senior FX Strategist Peter Chia and Economist Barnabas Gan assessed the recent measures by the Bank of Thailand (BoT).

Key Quotes

“The Bank of Thailand (BOT) announced on 5 January a new Non-resident Qualified Company Scheme (NRQC Scheme) which allows greater flexibility for non-resident companies to conduct foreign exchange transactions against THB with domestic financial institutions (FIs).”

“Eligible non-resident companies of the NRQC scheme can enter FX transactions involving THB with onshore FIs without showing proof of underlying. The current endof-day outstanding limit of THB 200 million imposed on Non-resident Baht Account (NRBA) is also removed. There is also no limit on per ticket size.”

“As the NRQC scheme will allow non-resident companies to conduct FX transactions with domestic FIs more freely, the need for borrowing THB is expected to decrease. As such, the BOT has reduced the outstanding NRBA borrowing limit from THB 600 million to THB 200 million.”

“The latest measures are in-line with the BOT’s efforts to increase the breadth and depth of the onshore foreign exchange market, as well as enhance market transparency and surveillance.”