New financial rule to control capital inflow, outflow


BANGKOK, May 29 – Thailand’s Finance Ministry has announced a move to write a new regulation to control inflows and outflows of foreign capital, a senior cabinet member said.

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong told reporters after the cabinet meeting yesterday that present regulations limit only foreign capital outflows, adding that the Bank of Thailand (BoT) can immediately implement the new regulation without having to seek Finance Ministry’s approval.

The BoT may simply inform the Finance Ministry if it decides to do so, he said.

Any decision on the policy interest rate rests with the Monetary Policy Committee (MPC), said Mr Kittiratt.

He said the MPC, in deciding on the interest rate, should ensure that the baht would not be too strong compared to regional currencies in order to contribute to the country’s economic growth as targetted.

Thailand’s current policy interest rate is 2.75 per cent. The finance minister has called for a reduction by 0.5 per cent while the private sector wanted it to be lowered by 0.25 per cent.

Prime Minister Yingluck Shinawatra said the cabinet endorsed an integrated economic plan on monetary and financial policies which should be implemented within six months.

This is an urgent measure, while a longer-term plan will be mapped out and reported to the cabinet, she said.

Yesterday’s cabinet meeting was attended by economy-related agencies including the ministries of finance, commerce, agriculture and industry, BoT and the National Economic and Social Development Board.

The BoT governor said the government’s measures to stabilise the national economic system is one of the attempts to rein in the volatile Thai currency.

He gave assurances that the central bank’s measures have covered all aspects and, if implemented, will prepare Thailand for any economic challenges.