PATTAYA, Thailand – The Bank of Thailand (BoT) has instructed financial institutions to tighten scrutiny of forward foreign exchange transactions conducted by gold traders, in a move aimed at reducing volatility in the Thai baht.
Ms. Pimpun Charernkhwan, Assistant Governor for Financial Markets at the Bank of Thailand, said the central bank is concerned that certain forward foreign exchange sales by gold traders could amplify fluctuations in the currency. As a result, financial institutions are now required to more strictly verify such transactions.
Under the new measures, banks must request supporting documents for every transaction, including proof of gold sales with overseas trading partners. In addition, gold traders must submit billing documents and gold export declarations within two business days from the date foreign currency is delivered. These requirements are intended to ensure that foreign exchange sales genuinely arise from actual gold exports.
At the same time, the Bank of Thailand is in the process of gathering public feedback on proposed amendments to foreign exchange control regulations. One proposal would require large-scale gold traders to report detailed transaction data to the central bank. The move is aimed at improving transaction monitoring, assessing impacts on the baht, and supporting the formulation of appropriate policy measures going forward.
The central bank reiterated its commitment to maintaining currency stability while ensuring that financial market activities remain transparent and aligned with underlying economic transactions. (TNA)
