The Bank of Thailand has started reform of Foreign Exchange Regulations. The move is seen as a starting point for further reforms of other regulations to enhance ease of doing business.

Governor of the Bank of Thailand (BOT) Veerathai Santiprabhob stated that one of the most important impediments in enhancing the nation’s competitiveness involves obsolete regulations that are not accommodative to business management.

Although the BOT has continually amended the regulations, certain rules are still not in line with the changing economic and financial environment.

This foreign exchange regulation reform will be a starting point of further reforms of other regulations under the BOT to enhance ease of doing business.

Nevertheless, he said, the relaxation must not affect the Bank’s responsibility to maintain financial stability or its ability to collect data for monitoring and analyses of capital flows to evaluate their impact on financial markets and the economy.

Over the past six months, the BOT, working with a consultant who is experienced and internationally renowned, has been collaborating closely with representatives from the private sector such as the Board of Trade of Thailand, corporations, commercial banks, money changers, and money transfer agents.

All of the mentioned parties identified obstacles and provided recommendations on revising the regulations, considering compliance costs incurred by the private sector.

Under this reform, the regulations will be revised for greater clarity and transparency with lesser redundancy. The BOT has changed its paradigm in revising certain regulations. That is, to allow the private sector to conduct foreign exchange transactions and foreign exchange hedging based on their own internal risk management and control policies within the framework set by the BOT.

In addition, this reform includes streamlining procedures, reducing documents, removing requirement for the BOT’s prior approvals for certain foreign exchange transactions, allowing new players in the markets, facilitating the use of local currencies for regional connectivity, and promoting transactions in electronic form for enhanced efficiency and flexibility.

The BOT has started the relaxations under the reform, some of which will become effective in June 2017, while others will require some time to carry out, as they are related to other agencies’ authority. The BOT will speedily complete most of the relaxations before the end of 2017.

The Foreign Exchange Regulation Reform is the starting point of further relaxations for ease of doing business. The BOT still welcomes opinions from all parties for further revision of the regulations in the future.

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